The clichés about the first five years of an entrepreneurial business are numerous enough to fill a terabyte of memory in the business section of startup-ology.
As Cybertonica hits its 5-year benchmark, let’s stick with the facts.
20% of startups fail in year one, 30% in year two, and 50% by year five. Well then out of ten that started alongside us, only 3 or 4 companies remain. Looking at our accelerator group of 12 there are, in fact, only 4 left.
It all started out of loyalty between Sergey Velts and Joshua Bower-Saul as co-founders of course, but also out of a digital loyalty program that we were building for a bank.
We realised that bringing these diverse data streams together and anonymising them also allowed us to see “non-loyal” behaviours and determine risk. It was from here that we decided that #risk and #fraud were a bigger problem.
We started our journey to build technology that would make it easier for loyal customers to use online services and much much harder for organised fraudsters to abuse it.
Anomalytics was born. On this platform, we have now built our products for fraud prevention, #AML, TRX monitoring and most recently #BehavioralBiometrics. It is not easy building a full and unique service offering on a limited budget, but we are almost there.
The trick has been to put up with being patient on the product to market fit and to find those key customers that both challenge our engineering and tolerate our building product in their backyard. You know who you are!
Our customers in five (soon 7!) countries have found real value and have referred and even sold our product to their partners and clients. We have seen over the years only a 10% churn which for a startup product suite is low. Now we see that the referrals are 50% of our new business.
We recently had an important pitch to one of the world leaders in our #Paytech segment. We knew we had made progress when we heard from an industry legend that we had a product that was distinctly competitive even against the goliaths of our industry.
And that’s despite the fact that our product team led by Sergey our co-founder and CTO and Olaf Hofmann our CPO, built our product for almost 20x less capital invested. Kudos to Engineering!
So, at five years old we compete and win against companies founded 8 and even 14 years earlier who have had several 100m Euro rounds.
Enough said then for the toughness, innovation and vision that this team brought together over five years. We see teams with a cookie-cutter approach and marketing we admire, but we also know the problems they face by being less resilient and innovative.
In the next five years, a further 30% of that cohort of startups from 5 years back will fail. Only one out of 12 is said to make money in the aggregate. And yes, Cybertonica aims to be that one.
There is no denying the “black swan” of COVID and the damage it has done in #Fintech, in the markets, and to the economy at large.
But we have held on and grown, using the time these past six months to finish our product improvements, to innovate and to do more discovery in the market.
We invested in innovative products and shortly will enter two new markets. We have turned down the vulture acquisition offers and kept our staff thinking and building through creativity and online socialising.
This has given our team the resilience it needs to get back into the field for the second half of the bludgeoning championship match that is the YEAR 2020.
We wouldn’t have gotten this far if not for our partners and supporters.
Finding great advisors and Board members early was crucial to us. Big shout out to David Parker, Yoann Turpin, Ekaterina Safonova and of course to our many SEIS investors almost all of them professionals in the risk and payments field.
The founding team with our first angel and advisor Victor Orlovskiy know the value you all contributed. The Emerging Payments Association also played a key role in securing our credibility and supporting our first largish funding round, hats off to Tony Craddock and crew!
We have been followed and supported to get here by our early investor FomCap where Filip Coen, and the team are part of the virtual celebrations.
Finally, our Chairperson, Jane Butler, who joined us just a little over halfway in, has made us stronger and more professional than we ever were at the seed stage. With Jane aboard, the trains run on time!
Many have it far worse than we do. Returning to our shared office spaces IdeaLondon this week, we saw that many startups have folded their tents, desks are empty. Several #tech spaces up the road are closing… Old Street here in London is feeling its fragility, Finsbury square is empty, the Monzo offices (our neighbours) are dark.
Fintech with recent scandals and down-round logic for even the top players is facing challenges that make the certainty of a couple of years ago look ever shakier.
Do we have the resilience and quick wit to last through the next 5 years and win those markets we are built to serve? We bet we do.
Our products seem to fit the new world almost better than the old one. Cybertonica has a foundation that is unusual. Multinational, multi-talented, highly diverse, and ambitious, the team that built this dream is ready for the next challenge.
So while wishing ourselves a happy birthday and preparing for a good second half of the match, we know we can get to the next level in the coming months. To those who are struggling alongside on this slippery path, we say keep your head up and look for the summit – it’s there above the clouds!
Read more about our team and how we are moving towards the gender parity in our organisation here.
To follow our journey and progress on keeping on top of the ever-changing fintech sector, sign up for our newsletter here.
