Today the rhetoric between banks and fintechs has mostly shifted away from combat, suspicion and derision towards collaboration, partnership and acquisition. Notable European deals in the space include Munich-based digital challenger Fidor Bank getting snapped up by French banking group BPCE, Finland's Holvi exiting to Spain's BBVA and Credit Mutuel Arkea buying French fintech startups Leetchi and Mango Pay.
But what it it like when your startup gets bought by a big bank? How do you ensure the business you've spent years building doesn't simply get squashed? In the latest episode of the FinTalk podcast we caught up with Céline Lazorthes who set up group payments platform Leetchi back in 2009 after struggling to collect all the money for a student weekend trip and went on to found Mango Pay, a white label payments tool for marketplaces and crowd funding platforms.
Tune in on on Soundcloud and iTunes right now to hear her thoughts on the realities of building a financial tech startup, the French startup scene (before ‘fintech’ was a fashionable) and women in tech.
You can also check out the full transcript below.
Tell us how you came to found Leetchi and Mango Pay?
I had the idea of Leetchi when I was put in charge of collecting all the money to organise a weekend for all the students on a school trip and I struggled to collect and manage all the money. There wasn’t any kind of site for collecting money from friends and colleagues.
I launched it in November 2009 and since then the product has grown really quickly – today we have 6m users in 150 countries. 80% of user acquisition comes from word of mouth and it’s very much growing very fast still.
Leetchi is for things like group birthday gifts, or weekends between friends. But it’s also for solidarity – unfortunately during the Paris attacks it was used a lot to collect money for families and the same happened in Nice.
How did Mango Pay come about?
By accident I created a second product because at the time when we created Leetchi there was no payment tool dedicated to these kind of crowdfunding platforms. So we built it and realised it could be be useful for other companies such as marketplaces, collaborative consumption platforms and of course crowdfunding platforms that need third party payment solutions.
So that is how the idea of Mango Pay came around – offering a payment API in white label for these kinds of industries.
It was born in May 2013 and it has seen amazing growth. More than 1,200 platforms in 25 countries are using Mango Pay as their payment solution – it’s really impressive to see all these different startups, big and small projects are using the technology. I am still managing both businesses.
How long did it take to go from having the idea to getting something to market?
It was a very long journey and it took the same time for each business so maybe I am just a slow mover!
I graduated in June 2008 and launched Leetchi in November 2009 so fourteen months and for Mango Pay it was the same time of incubation.
Between the time we realised a there was a need and the time we launched was more or less 14 months. In that time we were thinking about how we were going to launch and API and test it with 10 companies.
It’s not the same using your own tech and then opening it up to other companies of course.
What was the French startup and fintech scene like back then?
The amazing thing is we were born before the word fintech was used. One day we discovered we were a fintech company and that it was very hot.
A couple of years ago it was so different. We were born before incubators in France. Now the space is so hot and so many things are happening it is completely different. Also there is more competition.
I remember telling people I wanted to build a startup and they were like ‘Really? Why don’t you work at a big organisation like the rest of us or do finance?’
Now it’s getting more common to launch you own company. But I have to say as a woman there are not a lot of us still.
Last year you decided to sell to Crédit Mutuel Arkéa (CMA) – why was that the right move?
As an entrepreneur what you are looking for is the best partner at the best time to help your growth. We – I – have huge ambition: I want to build a massive company that is a new type of payment experience.
A little more than a year ago we saw the company was profitable for many months, we were doing well and growing but we saw a huge opportunity and we needed the right tools and right shoulders to achieve that and answer the market and our ambition.
We started doing our fundraising and it went amazing well – three weeks in we had three term sheets. The pen was on the paper and I have to say we found great people who were excited by our adventure wanted to join and our VCs at the time were very supportive. We were ready to do 25m Series C.
Then we talked to CMA. They were one of our first bank partners (we have about 10) and we had a very close relationship already. I think they saw a big opportunity with us and made an offer we could not refuse.
We realised we could have cash – but that was not what we needed the most at that point. We wanted access to tech and knowledge that we wouldn’t have got from just raising money. We knew because of our huge ambition and the size of the market, it only going to get more competitive.
Having access to tech and knowledge we could not buy was a huge asset for us to answer our ambition. That was the very important thing about this acquisition.
The other thing is we had the opportunity to explain we wanted to stay shareholders and absolutely independent to drive company vision- they had to buy that package or not do it at all.
They were very comfortable with the idea of letting us do that and take that risk. The ambitions fitted and we thought it was the best opportunity for the company.
We’ve just seen Fidor acquired and there will be a lot more M&A in fintech – as a founder how do you make sure your startup doesn’t get squashed?
It is the same as a good marriage – you have to know and trust each other otherwise it does not work.
That is the chance we had after working with CMA for five years – for me that is the only way.
I have a good friend who built all his companies through doing acquisitions. When a couple of years ago I was thinking about buying smaller companies to consolidate the market and grow more quickly, he told me that if you want to buy companies you have to build relationships.
He told me that if you want to do this you need to be in a relationship with CEO of the company you want to acquire.
As an entrepreneur and CEO you really have to build that relationship with corporates. You have to do the networking and understand which companies you trust and which CEOs because at the end it’s a matter between human beings and just building good relationships with people.
You’re involved with France Digitale and France Fintech, what are they?
They are both organisations – France Digitale came about to explain to the French government that VCs and tech companies are needed to help the country with employment and growth. France Digitale clearly met this challenge. We needed to explain that we need cash to grow our comps if we want to expand and hire quickly. That was its initial job.
Now it is an organisation to explain what tech is, opening doors and doing evangelisation to the French government and market.
France Fintech is dedicated to fintech companies. It was very much needed. I was happy to be part of that first movement – fintech is growing very quickly and we need to understand all the needs of the companies and have one representative. Tech companies needed one body to speak in their name in terms do the government, the European market and to explain to journalists what we are doing and how we can help customers.
I try to invest my time helping students and showing people that being an entrepreneur is doable and can make you very happy.
Also with women – I invest a lot of time doing talks saying this work for women and should not be any gender differentiation but unfortunately there are not many women in the tech scene so I think it is my responsibility as an entrepreneur and as a CEO to do that.
What other trends in fintech are you excited by?
I am amazed by a lot of what’s happening in the fintech industry but I have to say crowdfunding and lending amazes me because it is growing so fast. We are working with syndicate room on the UK market and I am really impressed with their growth.
You’re an investor yourself. How developed is the French business angel network – is it growing?
I guess it is. What I like is that you can see we have a couple of entrepreneurs from a previous generation that have succeeded and we are investing together.
I adore this because it is changing and we are seeing a lot of women and younger entrepreneurs succeeding who want to help others.
It is a beautiful way to throw the ball to someone else and say, “You’re going to make it!”
I try to invest in any kind of company with a disruptive angle – it could be in supply chain, tech, the way they sell.
Also I really focus on having a good relationship with the founders. At a certain point I think it is about human relationships and how you can help someone.
Being an entrepreneur is a long journey. It is exhausting and you need good board members telling you it will be ok and that you’ll kick ass.
Was there any point you thought about giving up?
I don’t think so because I am lucky enough to be naïve and really positive. I have always been surrounded by very positive people and had a really positive board.
For five years I had challenging but good board meetings and it really helped me because you need to be supported.
I have very supportive family, friends and husband and I really appreciate it because it is not always easy for them but it is really needed.
I always advise entrepreneurs to be surrounded by positive people and it will be ok.
What would in your opinion improve the industry?