This past March, Payhawk became the first rhino in Bulgaria as it closed a $100 million seed round. Founded in 2018, the fintech company offers a business expense management solution and, using these funds, intends to continue its expansion. Payhawk has opened its offices In Paris and Amsterdam in March and more recently in New York. An interview with co-founder Hristo Borisov.
Tell us about your story and how the idea for Payhawk came about…
Christo Borisov: I co-founded Payhawk in 2018 with Konstantin Dzhiguzov and Boyko Karadgov with the goal of streamlining the work of corporate finance teams. To achieve this, we have designed a comprehensive expense management solution. With our tools, businesses can automate manual processes and save time on value-added tasks.
We act as a financial partner in serving companies as such and do everything so that our clients do not waste time on administrative management in order to focus more on more strategic activities.
Many FinTech companies have grown in Europe in recent years… How do you differentiate yourself?
HB: The challenge for the banking sector is not to limit itself to payment, but to provide a broader range of services – in particular to manage and verify expenses or even monitor the balance sheet.
In organizations, CFOs (Chief Financial Officers) often find themselves compiling cash receipts. This task is very time consuming, and expensive for companies, so we wanted to digitize it. This is all the more important if we realize that all the 30-somethings and upcoming young talents have been born with technology.
Thus the demand for simplified technology solutions is increasing and we are responding to it as “tech expert” rather than “fintech”. In other words, as a software publisher in its own right, not a bank in its own right.
I would say that what distinguishes us from our competitors is above all the fact that we are interested in the largest companies. The complexity of running these large structures makes it more difficult to deploy our software suite. Their payment methods have not undergone any major change and the technological challenge is significant.
Finally, the customer experience is very important to us and is one of the conditions for differentiating ourselves and generating our own demand.
How do you make sure the level of customer experience is the same everywhere you set up shop?
HB: We cover 32 countries with very strong local leadership. Regardless of the region, we face identical issues in terms of our ability to integrate into the local market, and our decentralization strategy is essential here to ensure the independence of our teams in the field. Every time we open an office in a new area, we assign a dedicated commercial manager to manage the designated team and adapt our activity to local characteristics.
To achieve this, we have several banking partners so that we can provide appropriate services: for example, in the United Kingdom and the United States, we introduced a “credit” card offer (note: in Europe there is only a “debit” card directly linked to funds in Bank account).
In France, customers pay particular attention to the interoperability of their systems. In any case, we target companies with an international reach that require the solutions offered to be fully integrated with their internal software.
Are cultural and organizational characteristics an obstacle to establishing yourself in certain regions?
HB: To better establish ourselves in a new country, we always partner with local recruiters who understand the market. It also provides us with legal support, even if the compliance issues are often the same, regardless of location.
I would say that the most complex piece of legislation to understand for our sector remains US law. Obtaining a ‘bank passport’ remains easier in Europe and I am excited to see many more banking services appearing in the European market every day.
We are in the process of applying for approval from the ACPR (Prudential Oversight and Resolution Authority) but this is only one step. The most important thing is to ensure the continuity of our customers’ activities, always ensuring that they save money.
Do you have an ecosystem similar to French technology in Bulgaria? What does this mean for a Bulgarian startup that intends to grow and expand rapidly?
HB: The technology ecosystem in Bulgaria has grown significantly in recent years, and about sixty funds are now investing in projects like ours. Romania is also in turmoil on this topic, and the emergence of money on a large scale has been made possible, among other things, by the emergence of a European strategy to provide massive support for innovation.
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