 Hi everyone. Thanks for having us here. I'm Mike from Target Global, and we have Arik from Rapid. Thank you very much for having me today. The founder and the CEO. So Arik, maybe to start off, can you tell me, maybe in four or five sentences, what Rapid is doing, what Rapid is about, what are you guys doing? Sure, so Rapid basically invented the term FinTech as a service, so we build a global platform that provides other companies the ability to build on top of us financial applications from, you know, collecting money, disbursing money, storing money in custodian bank accounts, what it's called wallets, issuing cards, doing effects. It's basically a full-blown platform that you can build anything that you want on top of it from a financial services perspective. Doesn't matter if it is a Neobank or a checkout page in Shopify, we basically provide you this capability in 106 countries across the globe. And Rapid is not your first venture, right? So can you tell a bit more about yourself? This is not the first thing that you founded. You saw the company before, can you give a bit of a story how you ended up doing Rapid? Sure, so Rapid is actually my third venture. I started at the age of 21. I started a company that at the beginning was a system integrator in the unified communication space. Ended up being a cloud computing product company that I built in a bootstrap startup mode for 10 years from 2003 up until 2013, became a very big company that generated significant amount of revenue and then I sold it at the end of 2013 to a company called Davaya out of Santa Clara, one of the biggest unified communication companies that existed back then. Then for two years I basically worked for the company that acquired me and after that I decided to go and start a new company that ended up being Rapid. Yeah, I was the one who was here in the seed pitch for Rapid and I was the loser who almost fell asleep because I took a red eye flight from London to Italy and unfortunately we didn't invest in the seed stage but then we corrected ourselves at Series A. Can you tell us a bit more like what Rapid was at the seed? What you started with? Sure, so first of all it is true he fell asleep in the pitch and more importantly he actually sent me an email that I still have up until today in my office that says that I don't have the ability to raise capital as a founder. Just to give everybody the details I raised up until today $800 million to the company. So Mike, you're wrong but on a serious note when we started the company it was supposed to be something else so we started the company under the name of CashDash and it wasn't supposed to be a payments platform it actually was supposed to be a consumer e-wallet application that is bill on alternative payment rails so we basically decided to go in a very bad path of trying to compete with PayPal it was a stupid idea but you know back in 2016 everybody wanted to be the uber of something and everybody wanted to build a consumer play so we decided to try and build a consumer facing product with no experience in financial services right we had zero experience in financial services we came from cloud computing we stumbled into every single problem that exists on planet earth where you're trying to build a consumer financial services product getting regulated understanding what compliance means doing KYC, AML, sanction screening you know dealing with lawyers cannot get bank accounts it was a complete show that we failed on every single aspect of it but like a year and a half into the venture after we finally launched the product going through these hurdles we understood that every single company that wants to build something will have to go through these hurdles again and again and again because there's no infrastructure in financial services so we decided to pivot the company into a type of an amazon aws for fintech an infrastructure that is also fully regulated that can move money that provide other companies an api and from there we pivoted to rapid and you know from the early days that we raised three million dollars for a pre-seed round we ended up raising another 797 million dollars for a b2b infrastructure payments play and can you tell us a bit more about that b2b infrastructure payments play because basically i think a lot of people saying that the world runs on credit cards right so um yeah so the case so it's funny because i remember in 2017 when we decided to pivot and we tried to explain to investors what is an infrastructure in fintech everybody said what's the problem like everybody's playing with a debit or a credit card it's only a 16 digit number and that's it and the money moves but the problem is that this is maybe right in some countries around the world but the majority of the world is not working on the visa and master card rails and definitely if you want to do payment collection in asia even in some countries in europe it's more used in the banking rails definitely in latin america it's no cards and other jurisdictions you figure out that there are quite a lot of different ways that people would prefer to pay and definitely if you move also to the disbursement world of moving money out there is endless challenges because the banks are not really in this business they don't move money out if you're not a very big corporation so we figure out that there are probably around 900 different payment methods that exist across the world you know from cash points to local wallets to different type of bank payments that exist even in europe like ideal or so forth and there are endless number of them in india and brazil and other places we basically aggregated all of these things under a single API build a very robust API to do also disbursements created an infrastructure for wallets to store money in custody because in today's world majority of the businesses are a type of a marketplace that needs to store money in custody and it's a regulatory requirement to have custodian accounts doing the KYC and KYB and storing the money doing effects and you know these things are super complicated when you operate in one country think about trying to do it in a hundred countries across the globe you stumble into different regulations different banks different requirements different currencies and it becomes a very complicated spaghetti to deal with so i think everyone knows stripe right and stripe is even an investor in rapid and can you tell like how rapid is different from stripe so stripe is probably the best or one of the two best credit card acquires on planet earth but credit card acquiring is one side of the business if you look at our business we do five things we do collection of payments that includes 900 different payment methods credit and debit cards are one of them but actually the majority of the volume that we have is based on all the alternative payment methods that i mentioned that exist we do disbursements we do the wallet and custodian accounts we do the effects and we do the issuing of cards so stripe plays 95 percent of the time in the acquiring space and in some percent of the time they're probably around the disbursement space in a very small volume but we actually operate much more as a platform than a in a facing consumer facing acquiring platform and there's like endless number of use cases that are built on top of the platform and again when i say the neobank yes there are neobanks that operate some of their business on top of us and there is even a small mom and pop store that might use us for collecting payments in variety of countries can you give like some more precise examples because i think like a lot of people on this stage they speak like very vaguely about what they do right and in broad terms i think every fintech website is pretty much the same you know you come and look at that we are the best place to for your payments but like what does that mean can you give us a specific example we'll take three examples right of two very large clients and a startup that do stuff on top of us so for example we'll take google google is a client of ours they use us all over southeast asia for collecting payments from the google play store so when somebody wants to buy something on the play store they use rapid most of the people in the crowd think okay what's the problem people put a credit card they buy something on the app store it's done the problem is that the majority of the people in asia don't have a credit card or a debit card so in theory they cannot buy on the google app store so we basically provide all the alternative payment methods and the mechanisms to enable these consumers to pay in like endless number of payment methods all the local wallets that exist in southeast asia cash payments in like 711 or bodega bank transfers and variety of other things and it is a very complicated task to enable these payments as real-time payments because when somebody downloads an app he wants immediately to know that he purchased it so he basically turned this into a real-time payment like the card rails and enable it and also able to collect all the money in different currencies and move it all the way to the banking hubs of google in a different currency which is quite a complicated task from a regulatory perspective so that's use case number one payment collection second use case you can take uber quite a big client of ours that is using different parts of the platform they use us for payment collection in asia pacific excuse me in latin america especially around everything that is related to non-card rails because a lot of people in these countries prefer to pay in cash so there is basically a mechanism where we enable a wallet and a cash deposit that is held as a balance and the people can use uber from a balance that they have we also do quite a lot of disbursements and payouts of salaries to the drivers across multiple countries and we provide them card issuing capabilities so they basically provide their delivery people and the drivers a card that is linked to a wallet which replaces a bank account that might be required in some countries so it enables them to basically acquire better the drivers and delivery people because there's no bank account requirement in order to do it the third option is we'll take a startup company called spendmo which is in the expense management side they built a full expense management platform on top of rapids so we allow them to have wallets so every client of theirs that use the platform for expense management has a wallet they basically allow them to pay expenses either by doing bank transfers or by issuing cards on top of the platform so they can put it on aws or google computer or whatever and they build a full business of money movement without having the need to get regulated directly on their own and without building their own infrastructure for money movement and they operate around six countries across the globe what was the toughest in terms of like building this company because this is extremely challenging to build all of that globally like what was the toughest and what growth hacks can you recommend to other entrepreneurs here in the room so there is a lot of dirty work that needs to be done that is not flashy like a lot of times in startups people think that technology and coding are the challenge and they will solve it and unfortunately in financial services space you can be the best coder in the world but there is always somebody with a fax machine that sits behind the scenes that needs to press a button to move the money that's financial services and i think that the most complicated thing was basically trying to scale the company to as many countries as possible stabbling into endless requirements of local regulators that do not make sense and especially working with quite a lot of banks across the globe that are very challenging from a tech perspective because literally they do not have any tech and you need to create some kind of a technological layer on top of whatever the bank has you know to make sure that your clients are able to work in scale because otherwise it will explode okay any specific like growth hacks because i know you guys do some some stuff on hiring like some very unique stuff on hiring engineers and i think a lot of people heard about rapid moment yeah so we're you know back in if you look year and a half back in time when we needed to scale it almost two years ago when we needed to scale the engineering team at rapid it was super challenging to hire engineers because everybody was running around the globe trying to hire engineers and we're trying to basically be able to scale the company from a hundred people to around 500 600 people in a very short time frame especially around engineering so we were looking for gimmicks and the way to basically bring in people and we decided to try and go through a route of creating something that is called rapid the moment which is a music festival that we linked directly to recruitment we did one of them the first one was in october 2021 which ended up as a big success with global digits that came to play and basically out of this festival we recruited very quickly 200 engineers that came we gave tickets away to engineering talent based on the different types of queries and rhythms that we published around the internet that people need to solve in order to get the ticket and then we did another one in march 2022 which again scaled the company into another 150 engineers and it basically was a type of a game for engineers that they need to solve a puzzle that is based on engineering questions and then they get a ticket to this event that became like probably one of the most you know hot events that exist around the globe because of the level of talent that existed there. Can we also talk a little bit about the M&A strategy because rapid is known to acquire a lot of companies I think so far we did three M&A's and a few more in progress like can you talk a little bit more about that as an M&A as a growth hack? Yeah so we decided that in order to grow to the level that we want we will have to do some acquisitions because growing organically yes we can double and triple ourselves but at a certain stage if you won't start doing M&A it's going to be very challenging to continue the path of the growth we did up until today three different M&A's and the majority of the logic behind our M&A is actually not to acquire technology or to acquire talent because we believe that the tech that we have is superior to most of the other companies in the space it's mainly trying to find other companies that have a book of business that we can buy and migrate to our own technology and this way we basically increase the client base increase the margins and continue to operate the machine at the bigger scale you know we've done three M&A's globally up until now one in Asia two in Europe we're just about to do another deal probably in Latin America and you know it works extremely well for us as part of the methodologies that we have that we know that we're not buying tech and we need to migrate people to our own tech and it's quite a sophisticated machine that already operates well in our corporate development department and we believe that it's going to be probably around 25 to 30 percent of our growth in the next three years. Is there a big difference in terms of like buying tech versus like buying customers versus buying people? It's completely different like if you buy tech it means that you need to continue and invest into the technology that you acquired which is typically not your code base which a lot of times you ask any engineer that sits in the audience they don't want to manage somebody else's code it's always shit right their code is always the best and somebody else's code is always the worst so you know if you don't buy tech it's one route if you buy tech you need to basically continue investing something and somehow connect and plug in this other tech into yours which is very sophisticated very complicated and 90% of the time it fails globally that's the statistic if you buy talent okay it's a different story but to buy talent you basically to buy companies that either do the same business that you do or write in the same coding language that you write so it's a different type of scoping when you buy customers or a client base it's actually much easier because you know that you're going to buy a book of business that you want to migrate to your tech platform and the main thing that you invest in in the due diligence phase is to understand if you're able to migrate the clients into your platform without forcing the client to do anything on their side and that's the number one question we ask ourselves can we migrate these clients to our platform without them writing a single line of code or doing anything and if yes then the deal is interesting we've done three of them zero requirement from the client side we migrated almost 85 percent of the clients are ready you know to our platform which boosted significantly the margins the revenue and everything that is related to it perfect can we also take a little bit about the fundraising because right now i think rabbit is in a lucky position that you guys have about 20 years of runway but it was not always like that right and it was hard in the beginning yeah as you know i wrote you the email so like can you can you tell a bit more about that sure so you know in the beginning when we were people before we pivoted when we were trying to pitch a consumer payments played was super complicated to raise money nobody wanted to invest in the company even when we pivoted from consumer payments to a b2b payments or an infrastructure platform it was still very hard to raise money because it was complicated to articulate what exactly do we want to do we never had the ability to articulate to say we want to build a fintech as a service platform which is this api that provides other companies the ability to do things it was always very challenging to explain and what we learned over time that investors like yourself if you don't articulate in one sentence what do you do you basically fall asleep and you're not interested anymore in the company and we were it took us almost a year and a half to get to this clean pitch of literally an elevator pitch what do you want to be i want to be the amazon aws of fintech and that pretty much changes the narrative around you know fundraising and allowed us to fundraise much easier because the the size of the play and how big the company is supposed to be was very clear for the investors as soon as we you know we're able to articulate fintech as a service or aws for fintech so you know since we did that we raised another 790 something million dollars to the company some of it is still on the balance sheet some of it was used for mna and that was basically the narrative that allows us to very easily raise funds later on i think that now times have changed even though we don't need to raise capital we've seen what's going on in the market and it's definitely now a completely different you know market for fundraising so figure out the narrative is like advice number one what else in terms of fundraising what should an entrepreneur do i think that if you're the fundraising that the tip that i can give now is different from the tip from two years ago right i think that the tip from now is very clear that you need to show that you have a sustainable business model with a margin and even though it's clear you're not going to make money in the first several years because nobody expects you to make money the unit economics need to be on your side you cannot come with a consumer play of spending millions of dollars on acquisition of consumers and then think you will monetize later on you cannot come also with some kind of a play that you subsidize fees for somebody and then later on you will find another way to make money commercials or whatever advertisements this is not going to work i think that having a clear unit economics play for the long term is very important for today's fundraising the fundraising market and fundraising the market in general is pretty tough right now so what would be your what are the new things that you figured out over this year that you didn't know about investors relationships i don't know fundraising like tell us a bit more i think that the the most important thing and again we're in a very lucky position that we don't need to raise capital but definitely i learned from the table of investors that we have that you're one of them and general catalyst and others are there that it is very important to pick the investors in the good days that will support you in the bad days like the number one thing that is important is that from my perspective i have a rule i will not take money from somebody that i don't want to sit with dinner at dinner with right if i don't want to sit to dinner with the person i'm not going to take the money even if it is the best offer because later on it means when the sheet is going to hit the fan and it always happens they will not be next to you and they will not support you and i think that bringing somebody that is a real partner that sit next to you that will figure out with you the challenges and will not run away and you know somehow hide behind the rock or whatever it is is super important and this is my my rule is the dinner rule if i want to sit to dinner with somebody it's probably the what type of person that in the long term i want to do business with so with the church i'll always said like never let a good crisis go to waste right so there is a great crisis going on now what are the opportunities you're seeing right now so the the first of all crises are always good for companies that are big and want to become bigger because this is where they increase the market share i think that especially in the fintech or in the payment space there's going to be a significant amount of consolidation because a lot of companies do not have the unit economics behind their models and they're not be able to raise money which means that either they will be very cheap acquisition targets or they're going to give up the market share that they have and then companies like ourselves and others that are very well positioned in the space with clear unit economics and well funded can go after this market share and increase the market share increase the profitability which is a clear element in being basically the business with growing margins and not shrinking margins so it's definitely something we're going to do in 23 and leverage the situation what do you think about like last year there was a lot of discussion about blockchain crypto payments like what do you think about crypto and like does rapid work with crypto what's your view on the market do you think like the future of payments is on blockchain or visa and mastercard will continue to be dominant like tell us a bit more about that so so several things before we get to visa and mastercard specifically but blockchain we're not exposed to crypto or blockchain today is rapid we never touched crypto up until today and again it's not related to the fdx story or any other story we just we just didn't do it because of compliance regulation we decided to focus on fiat and you know the world basically splits between two sides the companies that don't do crypto and the company to do crypto and then you need to have different banking partners we didn't do it i'm a big believer that crypto is a commodity that people will continue to trade and i think that you know there are amazing companies like copper that is a custodian trading platform and some others that will continue and do great things you know in the world of crypto i don't believe that crypto will become a currency that you will pay with i don't see a single financial regulator or a central bank in the world that will be willing to give up his ability to print money and control the money by giving somebody else that nobody knows who it is the ability to actually pay and and become a type of a currency that is getting paid because it's not the way that the world operates but definitely crypto as a commodity as a type of an asset that people will invest in especially institutional investors yes and blockchain definitely as a technology big future just the use cases are still not there and regarding visa and mastercard i think that you know the thing that is going to slowly slowly reduce the market share of visa and mastercard that is going down globally is real-time bank payments like a lot of places around the globe are creating these real-time bank networks that allow you to scan a qr code and move immediately money from your bank account to somebody else's bank account you have pics in brazil you have upi in india you have pay now in singapore and you have some other countries that are building it even in the european union they're trying to build with the sepa real-time payments in salama other ways this is the biggest threat on visa and mastercard and i think that at the end of the day the real-time bank payments which are peer-to-peer payments going to replace the card rails will they replace the the wallets as well like the alternative wallets no so i think that the wallets will continue and grow and become dominant because the wallets are more a type of a play of creating either an ecosystem or some kind of of a points like loyalty play because people are using the wallets because they gain something out of using the wallets so i think that the wallets will continue to grow and build the more loyalty and an ecosystem play around them but at the end of the day the number of wallets that will exist will shrink because today they pop up like mushrooms after the rain but in the long term probably will end up with either regional or country-based one or two wallets that dominate and from there you know it will shrink all the other wallets that pop up that may not become relevant where in the world you currently see like more innovation and payments is it like still the us europe or is it like going in asia and let down so so in the u.s there's far from there is no innovation in the u.s in payments whatsoever is the oldest payments and banking system ever in the world i think that in africa there is more innovation than in the u.s definitely the fastest growing place is southeast asia you know in southeast asia there is huge innovation around payments around banking we see amazing things that are slowly slowly going into latin america and into europe i don't think that europe is innovative i think that the european union regulator can do a little bit more in order to to cheer up the innovation in the region but if i need to rank it will be asia europe latin america and the us is at the end perfect so we have one minute left and i think as we usually do with you like one funny story about fintech because i think a lot of people think that fintech is very fancy like my funny story would be that rapid was called cash dash before right and you were forced to change the name because not all the banks wanted to open the bank accounts for the company that had the name cash in it right how stupid that is like what's your favorite my favorite story is when we launched basically our disbursement engine in asia pacific and we connected to one of the biggest banks that exist on planet earth to do payouts and in the first week that we were running our pair platform we crashed the bank system because we sent more than a hundred payouts in the same second and they were not able to handle the load and it was a hundred payouts in one second not 10 000 or 50 000 and the bank literally wrote us a letter we can process one per second so you have to put a queue and delay it one second per payout and we said listen we can't do it we have 10 000 payouts we can't wait 20 000 seconds to do the payouts and then then we move to files which is the oldest way to do something but we crashed the entire bank perfect thank you so much thank you thank you very much everybody