Mike Katchen’s Trust-Based Approach Fuels Wealthsimple’s Success in the Fintech Landscape

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Wealthsimple is one of the biggest names in the booming industry of financial technology. However, according to CEO and founder Mike Katchen, Wealthsimple is really in a different, but highly related, business — the business of trust. As a company, Wealthsimple’s goal is to help its customers manage and invest their money so that it will grow over time, assisting them in navigating the daunting tasks that come with the territory.

“I think one of the differentiators about Wealthsimple is we have always approached these services as a wealth management company first, not a trading company,” Katchen says. “Even in the height of meme stocks, when other players around the world maybe were trying to make it easier for people to bet on AMC and GME, we decided to actually surface these warnings in the app, where it’s like, you go to buy GME, we’re going to tell you, ‘Hey, are you really sure you want to buy it? This is a highly volatile stock, it’s got a lot of risk, make sure you know what you’re doing before you place this trade.’”

Wealthsimple didn’t see this as investment advice. While other brokerages might be happy enough just to accommodate the action, Wealthsimple saw this as an opportunity to provide useful knowledge and education to its customers, so that it could nurture informed behavior and help them grow as investors.

“There’s nothing wrong with wanting to invest or participate in the things that you believe in.” – Mike Katchen

“Right? It’s just always, how does it fit into a thoughtful long-term view of how to invest and how to be an investor, and wanting to make sure we provide the guardrails that enable people to do what they want.”

To understand how Katchen and Wealthsimple arrived at this philosophy — one that is both contrary to most of the fintech sector and essential to understanding Wealthsimple’s differentiating place in it — one must go back to the beginning. Katchen first started investing at the tender age of 12, when his sister entered him into a stock-picking contest for charity… which he happened to win. The top prize was a ski vacation to Whistler in British Columbia, which meant that, before he was a teenager, Katchen was able to take his dad skiing for a week.

“I thought I was the coolest kid in the world, and I fell in love with investing,” Katchen says.

This experience became surprisingly relevant when, in his 20s, he moved from Toronto to San Francisco to join a startup that he and his collaborators ended up selling. With that sale came, for the first time in their lives, money that they could invest however they wanted. And knowing his surprisingly long history with investing — a skill that he had continued to hone in the years since his first success — everyone turned to Katchen to point them in the right direction.

“I believed at the time that it should be super easy to manage your own money – that you should never hire someone to do it for you.” – Mike Katchen

“I built a spreadsheet that showed how to build a portfolio and gave it to these friends. And their feedback was, ‘Mike, we love this approach. But we’re lazy. Please just do it for us.’ And that inspired Wealthsimple.”

Katchen started Wealthsimple in 2014, entering a Canadian marketplace in which most young people recognized the importance of being smart with their money, but had no idea how to use the few “complicated, expensive, and overwhelming” tools that were available to them. He and his team utilized startup principles, especially top-tier tech and design, and they put them to work in the Canadian financial-services industry, a sector in which Katchen believed no one else was thinking in the same way. Instead, five banks controlled the overwhelming majority of the market.

“When I came back and said, ‘I want to build an investment management company that’s going to be simple and accessible and radically change the way people invest,’ everyone said, ‘Hey, that’s cute. But the banks have a monopoly on trust, so good luck to you, but you’ll never get anywhere,’” Katchen says. “We did it anyway. And here we are as one of the most trusted financial institutions in Canada, almost a decade later, serving more than one in five Canadians under the age of 45 years old, which is pretty wild.”

Trust wasn’t built overnight. Wealthsimple’s thoughtful approach to building and innovating in Canada’s highly regulated environment has been a key contributor.

In 2019, Wealthsimple launched Canada’s first commission-free trading platform. A year later, tapping into its expertise as a registered securities dealer and innovator, the company launched the first regulated crypto platform in Canada.

Wealthsimple also became one of the first securities dealers to earn membership into Payments Canada, which provides an extra layer of assurance around fulfilling, clearing, and settling payments. Membership in Payments Canada was also a factor in their next milestone: becoming the first non-bank to be granted a direct settlement account with the Bank of Canada, which gave them access to Canada’s pending payment system, the Real-Time-Rail (RTR). As Katchen put it in a LinkedIn post, he believes the RTR will let Wealthsimple “compete on a level playing field and have control over how we innovate and build, rather than be beholden to our competitors for access.”

It accomplished all of these firsts without becoming a bank.

“With all the things that have happened in the crypto industry, our clients’ assets were safe because of how we’ve built our business. To clients we can represent, we wanted to do this the right way from day one, to regulators we can represent, we wanted to do this the right way from day one,” Katchen says. “And when you think about building long-term trust with a brand and with stakeholders, that’s a really, really important proof point of what the company stands for.”

This trust has been essential in differentiating Wealthsimple not only from other fintech companies, but also from the startup industry as a whole. This differentiation becomes even more important when it comes to investment management, as there’s a core philosophy driving many startups that is probably not the best way to think of handling peoples’ hard-earned wealth.

“With fintech in particular, I dislike it when people use the phrase ‘let’s move fast and break things,’” TCV Partner David Zhang says, referencing an oft-used term that is ingrained in Silicon Valley conventional wisdom.

“This is an industry in which we are stewards of customers’ trust and their savings and their money. Value creation in fintech is not about moving fast and breaking things. It’s about building a flywheel of trust, which is at the heart of what Wealthsimple is about.”

This trust is ultimately what drew the interest of TCV, which saw the opportunity to expand on the basis of the relationships Wealthsimple had formed with its customers. Unlike many other players in the fintech sector, Wealthsimple wasn’t focused on gamifying investing, or bringing market speculation to a wider cohort, as was the case during so much of the meme-stock and crypto activity. Instead, even in the bull market of 2020 and 2021 — which is when TCV first invested — Wealthsimple sought to prioritize the long-term relationship with the customer rather than the individual transaction.

“The root of how it all came to be for us was, we had an internal thesis, or at least an insight, that the consumer relationship writ large with wealth and finance around the world was changing,” Zhang says. “We scoured the globe to find folks who were building products and businesses that were driving that transformation. It was much larger than just investing and wealth. It was about the individual’s fundamental relationship with money.”

For Zhang, Wealthsimple had three core qualities that he believed made it stand out as a potential driver of this phenomenon. The first was that it provided a great product, underpinned by robust underlying technology. The second was that it had tremendous brand awareness — to the point that one in five Canadians under 45 years of age use it. And the third was that he believed Katchen possessed the types of visionary and leadership qualities that were core attributes of some of the best CEOs that TCV had backed across multiple industries over many years.

And for Katchen, the relationship with TCV was essential in helping Wealthsimple to navigate the last year, which has been a particularly difficult one for the fintech industry and banking as a whole. Even as some banks have failed and others have been under extreme pressure, TCV has remained supportive and worked with Katchen and Wealthsimple as the company focused on the long-term.

“David’s the one who calls me and says, ‘How do we take advantage of this opportunity in the market? Yes, it’s tough. Let’s be smart about what we need to do in the short term, but we’re building something that’s meant to be a heck of a lot bigger than what it is now. Let’s put our heads together. How can we help? What introductions can I make? What companies do you want to meet?’” Katchen says. “All of that has been enormously helpful, because you want a partner who is in it for the right reasons, and for the long term, I think TCV has shown its ability to show up for us in both good times and in challenging times.”

These recent events, like the collapse of Silicon Valley Bank, also demonstrated the enormous importance of the trust that Wealthsimple had spent the last decade working to build. If Wealthsimple had waited until a point of crisis to build that trust, it would’ve been too late. Instead, it was able to lean on its longtime ethos of “keep calm and carry on” to reassure customers and get them through the first bear market in the lifetime of the company, not to mention most of its clients.

“There have been lots of scares, drops, crises in the last 10 years, and whenever they happen, we send out a very consistent message to the clients, which is, here’s what’s happened, here’s how it fits within the broader market environment, and here’s why it is important that investors play the long game, as this is all a long-term journey,” Katchen says.

“We’ve not only done that when things are challenging, but we’ve also done it when things get frothy and exciting. Remembering meme stocks, we sent our ‘keep calm and carry on’ note then as well. I think if you build consistency with your communication, that’s how you really start to build credibility with your customers and build trust for when these things happen. You have something to go back to: just keep calm and carry on. You can tell them why you’re different.”

Wealthsimple even decided to expand this messaging into its own media arm, the weekly newsletter TLDR, which now boasts over 3 million digital subscribers and is the most-read financial newsletter in Canada — further cementing the company’s reputation as a port in the storm of finance and a voice that people can trust in an increasingly fractured news industry. And it further allows Wealthsimple to capitalize not only on its core business of trust, but on the waves of young investors who have flooded the market since the pandemic.

After all, the goal isn’t just to reel in these new clients — it’s to become the most important financial relationship that they have, both in the investment landscape and in the larger sphere of financial services. In a world in which the erosion of trust has become one of, if not the, single most important problem facing society today, what Wealthsimple aims to provide is at a premium.

“Once you have customer relationships that are deeply rooted in trust, that opens up doors to new opportunities. New products and ways to delight your customers. Trust is the Holy Grail.” – David Zhang

This opens up the door to any number of moves in the future, as long as they preserve and expand on this central relationship of trust. In Katchen’s mind, this trust provides Wealthsimple with the opportunity not only to influence how people spend their money — he envisions the company shaping the industry from the inside out.

***

The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any of the data or statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/

Meet Jack Newton, the Driving Force Behind Clio’s Legal Tech Revolution

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When Jack Newton started legaltech company Clio alongside his grade-school friend Rian Gauvreau, it was 2008 — but based on the way lawyers worked, it could’ve been decades earlier. 

Top firms located in the most expensive real-estate in Manhattan were dedicating the bulk of their floor space to filing cabinets. Paper timesheets were the norm. And it would’ve been hard to find an office that wasn’t filled with the distinctive whir of fax machines… not to mention exhausted, overworked, and unhappy lawyers. By 2008, Amazon, Salesforce, and LinkedIn had all become major players in the corporate world; within the legal space, though, it was as if the Internet revolution had never happened. 

In the 15 years since, Clio has been a leader in the movement to modernize the legal industry, bringing an efficient and easy-to-use suite of products to bear on taking the law online. But Newton and Gauvreau didn’t set out to spark a revolution in how lawyers and law offices do their business on a daily, even hourly, basis. (And anyone who has ever encountered a lawyer knows just how sacred the hourly basis is.) Instead, they had a much more fundamental realization that guided them toward their ultimate destination — and it began when Newton started charging neighbors to shovel their snow. 

Newton grew up in Edmonton, Alberta, where he got into computers at an early age; he remembers tinkering with an Intel 8086 that his dad brought home for him. By eight years old, he was already writing programming, absorbing the remarkable implications of what it represented. “That was so mind-bending for me, especially as a young person — that you could just sit down and write some lines of code and make something that does something useful for people,” Newton says.

Doing something useful for people always played a major role in his thought process, and at the same time that he was experimenting with processors, he also started his first businesses. One of these came out of a very simple observation: in Edmonton, it snowed a lot. People needed their driveways shoveled. So he and his brothers started a snow-shoveling business — serving a clear need in their community. (Newton likes to joke that he’s always been in SaaS, except then, instead of Software as a Service, it was Shoveling as a Service.)

Fast forward to the mid-2000s. While many people assume that Newton is a lawyer himself, he’s actually a technologist: he trained in computer science as an undergrad and then obtained a master’s degree in machine learning at the University of Alberta. After working as a software developer at a blossoming medical-technology startup, he got the itch to launch his own company, and he and Gauvreau surveyed the scene around them, trying to understand what kind of business the macro environment might support.

“We saw the cloud becoming a really transformative technology that was going to, in our mind, transform almost every industry out there. It was really obvious to us, even though the cloud was fairly nascent in 2008,” Newton says. “Our question was, what is an industry that is ripe for transformation, ripe for disruption? Rian and I were two hammers looking for a nail.”

Cue the snow-shoveling wisdom. They needed to find the space most desperately in need of what cloud technology could provide — the place where there was the most snow that needed to be shoveled. At the time, Gauvreau had actually moved to Vancouver and was working for the law firm Gowlings, and he got to observe firsthand how poorly the average law firm implemented technology. They realized that the legal industry desperately needed a cloud-based service that could consolidate and streamline many of the practices that remained painfully manual. And they also saw that it wasn’t just a corporate need: it was a societal need as well. 

“It’s an important space in that the legal system is really foundational to our society, and access to justice was a huge issue where 77% of individuals do not have access to lawyers to help them see good legal outcomes for their problems,” Newton says. “We really saw that it was not only a big and important opportunity, but that legal, in a lot of ways, was the last major industry to be fundamentally transformed by technology in general, and by the Internet, in particular. Lawyers in 2008 were still doing their job like it was 1958 — they had really been almost untouched by technology in terms of how lawyers worked on a day-to-day basis.”

While the need for Clio seemed clear, Newton and Gauvreau had no sense that they were launching a company that would one day be worth more than a billion dollars and employ almost a thousand people. At the beginning, their goals were far more modest: create something that could support the two of them and a handful of other employees by making the “average lawyer’s day just a little bit better and a little bit easier to get through,” as Newton puts it. 

But it soon turned out that this average lawyer looked considerably different than he expected. As a technologist, Newton had little idea of what lawyers were actually like — and most of what he did know was based on TV. He assumed that most lawyers resembled Harvey Specter, the slick protagonist of USA Network’s Suits, working in high-end firms populated by hundreds of lawyers. He was surprised to find that, on the contrary, about 80% of lawyers turned out to be working at firms of 10 lawyers or less, and a full half were practicing solo. 

“They don’t have a floor of IT people, the way a big law firm might,” Newton says. “They’re solving their problems themselves, or they’ve maybe got their 13-year-old nephew that’s good at computers helping set up their IT systems.” Moreover, these lawyers weren’t just practicing law: they were spending even more of their time running small businesses, something they had never been trained to do in law school: “The law school industry is unfortunately producing a lot of lawyers that are pretty ill equipped to do that successfully. We saw a real hunger for a tool and a company that helped lawyers understand how they can leverage their training as a great lawyer into being able to run a successful law firm.”

That meant that this modest initial goal — make the average lawyer’s life a little better — turned out to have extremely far-reaching effects, because so many lawyers were so desperately in need of what Clio had to offer. At the same time, not only was the legal industry more than ready to start this evolution: as a SaaS company — Software now, not Shoveling — it actually made sense for Clio to go out and raise external funding so that they could frontload customer acquisition as much as possible. Newton had come to understand this from analyzing other SaaS case studies, where he saw evidence of a frequent winner-takes-all dynamic, particularly in vertical spaces, where the market could really support only one major player. 

This is also what caused Clio to first come across the radar of TCV. “We look at large verticals and potential technology categories of different types and try to understand, for anything that seems like a potentially large opportunity, who are the most innovative market leading businesses in those segments,” TCV general partner Amol Helekar says. “Legal was one of those almost Captain-Ahab, white-whale types of categories for us where we felt like, wow, this is such a huge vertical.”

As Helekar surveyed the space, he couldn’t find any companies that felt truly innovative and paradigm-shifting as far as how they addressed the way that law firms run — until he met Newton at a conference and learned about Clio, which was doing exactly that, for more than 35,000 firms. At the same time, Clio fulfilled the other criteria that Helekar looks for in a successful investment, including unique and powerful value proposition, huge engagement with users and customers, virtuous cycles that could cause a chain reaction of innovation within the product category, and a visionary, growth-oriented CEO and management team. 

“It’s the same types of characteristics that we saw with some of our notable investments, whether it’s Netflix, Spotify, Facebook, Expedia, or Zillow,” Helekar says. “When we would do customer calls on Clio, which we did well in advance of investing, we heard from lawyers that they’re using the product every day, that this is the core for how they manage their businesses. It’s the first application they log into in the morning, and it’s the last one they log out of at night. That’s where they track all their time, where they store all their data. And you could just feel the passion and the importance of the product to how they manage their practices.” 

On top of that, Clio wasn’t just transforming the way that law firms conducted their operations — it was also fueling development within the whole ecosystem of legaltech. Clio now features more than 200 applications, and it exists at the center of its vertical, investing in other legaltech products as well as hosting the Clio Cloud Conference, or ClioCon, one of the largest and most influential annual legaltech conference. 

But when TCV invested in Clio’s Series D round in 2019, it wasn’t a partnership that Newton entered into lightly. At the time, Clio was on pace to become a $100 million company, but Newton was already thinking past that — how they could become a $500 million company, and then a billion-dollar company, a “really durable, generational company.” To achieve that kind of growth and presence, the fit would have to be perfect.

“Maybe second only to who are you choosing as your co-founder, the next most important decision you make as a founder is who are you bringing onto your cap table to help grow the business, and in what ways can they help support you growing the business over the long term.”

“It’s like a marriage, and a lot longer lasting than some marriages: you’re entering into a five or six or 10-plus year engagement to go and drive transformation in the company and take the company to the next level.”

What impressed Newton at first was that TCV sat down with him and other members of his management team and walked them through a detailed view of how the fund thought about the legal space and where they saw opportunities to expand, as well as the feedback they were getting from their customer calls — years before they invested in Clio. This provided both a sign of good faith as well as a preview of what their partnership might look like, and Newton found himself aligned with Helekar and TCV on the various propositions that both sides brought to the table, including a strategy for using corporate development and M&A as tools for expanding Clio’s reach and value. 

Crucial in making the partnership work, though, was that TCV understood and endorsed Newton’s forward-thinking outlook — a very forward-thinking outlook. “We talked about building a 100-year company at Clio, a company that’s going to outlast me as CEO and outlast everyone who’s currently part of Team Clio, and it’s rarer than you’d think to find investors that have the kind of long-term view that that TCV does on their investments,” Newton says. “A lot of investors are thinking about a three-to-five-year hold period, and I think TCV is exceptional in how many investments they’ve been part of for a decade. Or two.”

More importantly, Newton and Clio have fulfilled that initial goal of improving lawyers’ quality of life — once again, far beyond the scope of what he had initially envisioned. Lawyers do not live easy lives: they work long hours in high-pressure situations, often engaging with clients at the worst moments of their lives, whether it’s a divorce, a bankruptcy, or any number of other pivotal events. 

“You spend your entire day, internalizing other people’s problems, dealing with emotional stakes that are quite high to start with,” Newton says. “And then you’re dealing with structural components of the industry, all the way to the billable hour, that really encourages a mismatch between work-life balance, including a very hard-driving atmosphere at law firms where associates and more junior folks in the firms are worked extremely hard. All of this creates a profession that has some of the highest suicide rates, highest substance abuse rates, highest rates of depression of any profession, full stop.”

By helping them to manage their workloads, streamline their interactions with clients, and increase responsiveness without piling up more hours on the job, Newton and Clio have found that they’ve been able to make a noteworthy difference not just in lawyers’ work, but in their lives. In one internal survey of their customers, Clio found that its software saved them eight hours a week — a whole workday’s worth of logistical and administrative labor that no longer needed to be performed. 

But Clio didn’t spin this as time that could then be turned into more billable hours. Instead, the company coined what it calls the “Clio day.” “We really turned that around and said that the time we’re saving you is time you can go and invest in quality of life,” Newton says. “This is time that you can spend with your husband or wife or your kids — this is the school recital that you don’t have to skip and miss out on.”

It all goes back to the streets of Edmonton. People don’t pay you to shovel snow because they want to have more time to shovel snow: they pay you to shovel snow so they can do something else. Newton and Clio have applied this lesson to an industry in which the average practitioner had to shovel a lot of metaphorical snow. 

Now, there’s a company that can shovel some of that snow for them.

***

The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any of the data or statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/

Modernizing hourly work: Our investment in Instawork

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The pandemic has shown businesses the benefits of flexible staffing from the ability to ramp up or down labor during seasonal periods to reducing fixed costs and increasing flexibility during unforeseen macro events. Coming out of the pandemic, the US has three million fewer Americans participating in the labor force compared to February 2020, prompting the need for tech-forward solutions to better match the limited supply of workers with the growing demand.1 

The staffing market is giant, fragmented (no company >2% mkt share), and underpenetrated by technology, with most players employing people-heavy models. Legacy temporary staffing agencies are heavily people-operated. Temp staffing agencies maintain large customer service and account management teams, often manually calling or emailing/texting workers to inform them of shift availability and, on the employer side, exchanging spreadsheets or calls/emails/texts about scheduling, payment and more.

This disjointed and often analog process results in mismatched expectations, frustrating experiences, and suboptimal matching of labor supply and demand, worsened by high turnover and frequency of hiring. An employer running a catering business or warehouse operation,  often faces 100%+ full time employee turnover on an annual basis. 

Instawork offers a mobile-first job marketplace and workforce management platform for skilled temporary workers, bringing flexible work to hourly workers at scale.

Instawork makes it easy for employers to list shifts and for workers to discover and book them, along with facilitating payment and creating trust with transparent/public performance management for both sides.

Pros have fast access to quality jobs, a transparent booking and payment experience, the ability to build their skills through a two-sided review system, and the capability to receive recognition and rewards for their performance. Instawork offers flexibility that hasn’t previously been offered to Pros; they can set their own hours and can change their work preferences each day, week or month as well as earn more for urgent requests and peak times.

The value proposition to partners is reliability, quality, and convenience. The underlying data model plays a critical role in properly matching skilled workers to available shifts and the performance of both the partner and worker is tracked for future matching success. 

The flywheel is working: fill rates (% of positions listed that are filled) have increased over time and no show rates have decreased over time with scale, demonstrating how Instawork’s data-fueled matching system has funneled increasingly reliable and quality workers to employers, resulting in high satisfaction from employers and workers. To date more than4M Pros have joined the Instawork platform and partners are increasingly pulling the company into new geos across the US and Canada.

Our partnership with Instawork

We’re thrilled to announce that TCV has led Instawork’s Series D. In this round, Instawork has raised $60M of capital from TCV and other investors including Benchmark, Spark, Greylock, Craft, 9Yards and more.

We have a deep belief at TCV that strong and fitting company cultures result in great experiences for customers. While learning about Instawork, we heard that the team had a saying “Inches off at launch means miles off in orbit.” It’s exactly this detail orientation and product obsession that we think can give rise to a novel marketplace platform for hourly work. We’re incredibly excited to partner with Sumir and the rest of the Instawork team on their mission to shape the future of work.

1https://www.uschamber.com/workforce/understanding-americas-labor-shortage

Our investment in Grow: Behavioral health’s independent practice platform

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The mental healthcare industry in the U.S. is at an inflection point: Patients can’t easily find help while therapists are overworked, underpaid, and frustrated with traditional employment options. Therapists are increasingly dissatisfied with the groups they are employed by and 80% are looking for a new way to engage with patients.

Launching one’s own practice is hard. Self-employed therapists must navigate complex payer relationships to offer in-network coverage, tap channel and referral networks to build their book of patients, manage burdensome administrative work, and cultivate a network of peers for collaboration and support. The industry’s antiquated practices are directly impacting patient outcomes and clinical quality.

Grow’s B2B2C platform enables therapists to launch their own independent practice and in doing so, enables therapists to expand access and better serve patients.

With Grow’s complete ‘practice-in-a-box’ solution, self-employed therapists can offer affordable insurance-covered care to patients without having to worry about patient acquisition, overhead, or other administrative burdens that often fall on independent private operators (e.g. EHR, scheduling, invoicing, payment collection, note taking tools). Grow also provides a community for therapists to engage and connect with other providers in the field. 70%+ of providers use the Grow Community weekly and many cite this feature as a reason for their success on Grow. 

For patients, Grow offers a convenient path to find the right in-network behavioral health provider, book time instantly on their calendar, and access confidential secure care either virtually or in-person. 

Team on a mission.

The idea for Grow came from CEO and Co-Founder Jake Cooper’s experience with the difficulties of finding in-network behavioral care. After many dead-ends, Jake decided to pay out-of-pocket for a provider not covered by his insurance. While he had the resources to tap a provider out-of-network, Jake knew most Americans did not.   

Jake partnered with co-founders Alan Ni and Manoj Kanagaraj, as well as a broader team with deep experience across technology, healthcare, and payments, to build a mission driven company which empowers therapists to launch their own independent practices that are: 1) covered by the largest number of insurance providers in the industry, 2) easily discoverable by patients, and 3) scalable due to full-stack supporting infrastructure. 

Our partnership with Grow.

We’re thrilled to announce that TCV has led Grow’s Series B. In this round, Grow has raised $75M in equity and debt capital from TCV and other leading investors including Signalfire and Transformation Capital.

At TCV, we look to partner with founders who are building category-defining, generational companies and we’re incredibly excited to partner with Jake, Alan, Manoj, and the rest of the Grow team on their mission to create the largest and most accessible behavioral health platform in the country. 

Making Work Better: Humu Applies Behavioral Science and AI to Optimize Employee and Enterprise Performance

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As the world shifts towards a knowledge economy, enterprises need to re-imagine how they do business. They are realizing that their employees are their most important asset and are searching for a smarter way to engage, encourage, and drive the best performance. Enter Humu, a platform working at the intersection of behavioral science and AI to solve that very issue.

Humu, a recent addition to the TCV portfolio, is rapidly gaining adoption from some of the world’s largest and most complex organizations. Its intelligent technology platform coaches managers and employees into developing work habits that are scientifically proven to drive performance. Humu was co-founded by CEO Laszlo Bock, former Google SVP of People Operations, and is the output of decades of his work and experience in helping make HR a more data-driven function. Laszlo is uniquely positioned to build the Humu technology platform into a must-have for organizations looking to drive employee engagement, optimize performance, and improve productivity.

Specifically, by nudging employees with short, behavioral science-backed recommendations, Humu provides personalized guidance that’s unique to each employee, helping workers to build better habits, while also driving towards organizational goals, including employee retention, manager effectiveness, productivity, and inclusive cultures.

TCV is thrilled to lead Humu’s $60 million Series C. The investment, which follows two years of significant growth for the Company, will fuel new product innovations geared to support managers and their teams. TCV venture partner Jessica Neal, former Chief Talent Officer at Netflix, has joined Humu’s Board of Directors as part of our new partnership.

TCV’s experience in seeing the magic in the Right Content, Right Person, Right Time

TCV has long understood the value of delivering engaging, timely content to the right person at the right time and has invested based on this thesis for over two decades, including in companies like Netflix (video), Spotify (music), Peloton (fitness), and Newsela (K-12 instructional content).

TCV believes that timely content curation and delivery should extend from our consumer lives to our work lives: if Netflix can feed us more of what we need to keep us entertained, why wouldn’t we benefit from similar capabilities in the workplace? Businesses need a system that serves us the right content at the right time to help us perform better.

What is exciting about Humu? Humu is driving real outcomes

Humu’s AI-based Nudge Engine™ technology drives timely “nudges” to encourage employees to do more of what creates optimal outcomes and experiences for employees and enterprises. Nudges are delivered in curated pathways that are algorithmically generated, sequenced, and tailored to a particular initiative and employee.

At a glance:

  • Every Humu nudge is based on academic research and carefully crafted by Humu “people analytics” experts
  • User experience panels ensure nudges are easy to understand and act on. Feedback loops make it possible to turn off what’s not working, and send more of what is
  • Employees turn to nudges more and more over time. Sustained nudge engagement rates across customers are as high as 95%

At Silicon Valley Bank, Humu’s nudges focus managers and employees on what matters most – and remind them at just the right moments to adjust their habits. That could be in supporting managers who may be too focused on execution at the cost of supporting employee development and encouraging them to find ways to offer their people personalized growth opportunities. Don’t take our word for it…hear it directly from Humu’s customer SVB:

“People don’t have to wait for management to roll out a time-intensive program. Humu provides our employees with relevant, customized feedback that’s not generic or mundane. Nudges democratize the employee engagement process; they make learning much timelier and easier for everyone involved. We have a 70% open rate, which means it’s going really well. The right nudge at the right time really makes all the difference.”

Chris Edmonds-Waters, Chief Human Resources Officer at Silicon Valley Bank

A team that helped build a trillion-dollar business, and is now on a mission to solve work for everyone

Humu’s CEO Laszlo Bock helped build and lead Google’s people function for ten years, a role in which he was responsible for attracting, developing, retaining, and delighting ‘Googlers’ (he distilled a lot of his practices and insights into his book published in 2015, Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead).

He co-founded Humu in 2017 with former Google colleagues Wayne Crosby (former Director of Engineering) and Dr. Jessie Wisdom (former People Analytics Manager). Together, this formidable team founded Humu “to make work better through machine learning, science, and a little bit of love” – not to mention everything they had learned about smart use of data.

“When we began this journey in 2017, we knew our experience in pioneering the field of people analytics would help us build what we believe is the best technology for supporting managers and employees, and we’re proud of the impact we’ve made.

This latest investment, led by TCV, signals our partners’ confidence in our ability to deliver on that promise long into the future, and we’re excited for what we’ll bring to the market, especially for managers, in the months to come.”

Laszlo Bock, CEO of Humu

TCV is excited to be a partner in building a category leader

TCV believes Humu represents an opportunity to back an emerging leader in the HR technology sector, led by a world-class team that’s uniquely positioned to penetrate a massive market with compelling industry growth tailwinds. With this latest round of funding, Humu aims to take steps towards executing its bold vision of facilitating building a unique, high-performing culture for its client organizations based on proven best practices. As a firm that focuses on long-term value creation, TCV believes that Humu, with its deep background in people analytics, has the potential to make a positive impact on the way we all work.

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The views and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

Instant Global Identity Verification: How Trulioo’s Technology and Data Marketplace is Transforming Digital Customer Onboarding

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Digital innovation has transformed how consumers and businesses access a range of online services – from streaming media, booking travel, setting up bank accounts, or financing a car. As more and more high-value services are performed through digital channels, it is increasingly important for businesses to know who is using their platforms. Many fintech applications need identity verification to comply with ‘Know Your Customer’ (KYC) regulations, while online marketplaces need it to maintain trust and safety on their platforms. These requirements have created a huge market opportunity for identity verification technology – a market TCV has been tracking for several years, looking for the right opportunity.

We found such an opportunity and are thrilled to announce our investment in Trulioo, the market leader in global consumer and business identity verification technology. Through its network of 450+ data partners, Trulioo can verify identities across over 5 billion individuals and 330 million businesses in more than 195 countries and territories. That’s the broadest reach of any vendor in its industry – and it’s all delivered via a single API.

For Trulioo’s customers, the opportunity is to maximize the number of clients they onboard globally via a frictionless experience, while seeking to ensure regulatory compliance and preventing fraud. We believe, this compelling value proposition has created significant momentum in Trulioo’s business – revenue has more than doubled over the past year, and growth is accelerating.

And while Trulioo has built a market-leading identity technology business, its ambition is to become the first global end-to-end identity verification platform by introducing AI/ML functionality and additional software applications. We are confident that our investment and partnership will help Trulioo accelerate its growth and achieve its platform vision even sooner.

Identity Verification Data with a Difference

Trulioo commands a leading position in its field, providing an API-driven marketplace of rich identity data. This is triangulated across multiple sources, normalized, and then delivered to customers via a single, modern API. Customers embed Trulioo’s API into their onboarding and compliance platforms to perform KYC/KYB (Know Your Business) verifications. The API and data-centric approach renders accurate identity verification quickly and enables a frictionless customer onboarding experience.

Trulioo’s identity data marketplace is built from a rich network of relationships with over 450 country-specific data providers that the company has developed over more than a decade. This adds up to a compelling value proposition for companies with global growth ambitions and has established Trulioo as the market standard for international identity verification. As Trulioo grows its customers and data sources, it creates a virtuous cycle that makes its value proposition more attractive to both sides of the marketplace. Finally, Trulioo has built a rich set of value-added features, rendering it well positioned to become an end-to-end identity technology platform.

This powerful data-driven proposition quickly drew our attention, and the people who are working to build Trulioo into a franchise technology leader are just as impressive. Founded in Vancouver, Canada a decade ago, the business is led by Steve Munford, a veteran software industry CEO, who TCV has known for more than a decade. Previously, Steve has scaled multiple highly successful companies including Carbonite, Absolute Software, and Sophos.

Steve joined Trulioo in 2020 and is surrounded by a world-class team including COO Zac Cohen (formerly Strategy & Operations at Global Relay), CTO Hal Lonas (former CTO of TCV-backed Webroot); CFO Leigh Ramsden (formerly CFO at Absolute Software); CRO Matt Schatz (former SVP of Sales at WP Engine); along with 240+ talented team members. That’s quite a line-up, and we’re delighted to work with everyone there to help Trulioo execute its growth strategy.

Glowing References from all Angles

Our conversations with Trulioo have been exciting from day one. It was immediately obvious that we share a belief in the vast market potential for identity verification, in addition to our conviction that the winning technology will increasingly need to be global, creating a unique opportunity for Trulioo to be the end-to-end platform of choice.

We first met Trulioo’s team in 2015 and heard rave reviews about the product from customers within TCV’s portfolio. When Steve joined Trulioo in 2020, we increased our dialogue with the team – holding multiple meetings where we discussed the company’s growth strategy and Steve’s vision for the business.

On top of our portfolio references, we conducted calls with many of Trulioo’s customers, partners, and identity market observers. The market feedback was effusive about the company’s value proposition, with customers seeing its product as clearly differentiated from other vendors thanks to its 360-degree data-driven approach.

A Shared Belief in the Global Identity Verification Opportunity

TCV has already invested extensively in the companies and industries that Trulioo serves which has fueled our excitement and conviction in the company’s value proposition. We believe that fintech companies – including payments and remittance companies, challenger banks, and trading platforms – will continue to grow globally. It’s why we’ve backed leaders – including Payoneer, WorldRemit, Nubank, Revolut and Wealthsimple – that are embarking on global growth agendas.

Given the importance of API-driven identity verification for digital KYC and other related applications, we believe Trulioo will be a valuable partner as fintech vendors grow. And, as many companies across verticals embed fintech capabilities into their products, we think Trulioo’s offering will resonate with an even broader market.

We’ve also seen firsthand how critical it is to maintain trust and safety for online marketplaces, through having Airbnb, Nerdy, and Rover in our portfolio. Similarly, we’ve witnessed many other industries, including e-commerce and gaming, investing increasingly in identity verification technologies, using trusted third-party sources, as they pursue global growth agendas.

Drawing on experiences from our portfolio companies, we also have high conviction in the rising importance of governance, risk, and compliance (GRC) technology, and have backed leaders including AxiomSL, OneTrust, ETQ, and Watermark in this space. As a critical aspect of their GRC strategies, we think identity verification – and Trulioo in particular – will grow in importance as global digital onboarding continues to expand.

A Powerful Partnership to Build on

We’re delighted at this meeting of minds and ambitions in a vast, emerging industry with powerful tailwinds. Trulioo is addressing a huge problem that applies to many of the most innovative, fastest growing verticals, and we are excited to help them seek to revolutionize their industry.

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The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any of the data or statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

FarEye Helps Enterprises Delight Their Consumers at Every Step of the Journey

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After perusing slick digital shopfronts for hours, checking AI-enabled online catalogs, and paying through seamless single-click checkouts, you may eventually be rewarded with ‘your delivery should arrive in 5-10 working days’ and left to pray that the shiny new gizmo you ordered will arrive in one piece. Sound familiar? For all the innovation and investment across most steps of the online purchasing journey, the actual delivery experience has been largely neglected. Yet, the surge in remote purchasing shows no signs of abating and consumers are demanding faster, better, and cheaper deliveries. This has placed the status quo under immense strain and the need for new solutions to help companies navigate this complexity today is greater than ever.

A New Frontier for Innovation in E-Commerce Enablement

E-commerce enablement has been a key investment theme for TCV, and we have made multiple investments across each step of the value chain. In early 2019, we invested in RELEX Solutions (Helsinki, Finland) which provides an AI-driven platform helping global retailers forecast demand and prepare their supply chain to execute against it. In 2020, we backed Spryker (Berlin, Germany) which helps enterprises build beautiful digital commerce platforms for B2B, B2C, and marketplaces. We also invested in Mollie (Amsterdam, Netherlands) which provides a seamless, easy-to-integrate online payments solution for merchants across Europe. Another recent investment is Trulioo (Vancouver, Canada) which provides seamless know-your-customer (KYC), and know-your-business (KYB) verification checks globally, enabling smooth onboarding of merchants and consumers onto online marketplaces and fintech platforms. Paradoxically, while the e-commerce experience may appear increasingly effortless for consumers, the underlying technology landscape has become increasingly sophisticated and complex.

Following our investments upstream in the ecommerce value chain, we cast our eye further down, identifying logistics as the natural next step. Within this untapped, vast market, last-mile delivery from a fulfilment center to a delivery endpoint like a consumer home has always been the most operationally complex and resource-intensive leg of the journey, absorbing nearly 50% of total logistics dollars spend, driven by inherent lack of economies of scale (disparate drop-off points) and its on-demand nature. Complexity has also compounded due to new delivery and fulfilment modes like micro-fulfilment centers, curb-side pick-up, etc. which strain already razor-thin margins for retailers and carriers alike. Even Amazon, the most sophisticated logistics machine in the world, has not been spared — as a percentage of retail-related sales, Amazon’s cost of fulfilment/shipping grew from ~16% to 32% between 2010-19. On the end-consumer front, delivery experiences have become a critical driver of satisfaction and repeat purchases, with delivery constituting the only physical touchpoint for online brands with their customers. In fact, 55% of US consumers have bought goods from one retailer over another because they provided more delivery options[1]. Throw all of the above in the mix and you have a market that is ripe for disruption. Enter FarEye – a next-generation intelligent software platform that helps enterprises to orchestrate all of their delivery logistics requirements.

We were thrilled to recently announce our investment in FarEye. Founded in India in 2009 by Kushal Nahata (CEO), Gautam Kumar (COO), and Gaurav Srivastava (CTO), the trio started their journey as logistics consultants, before settling on their strategy of building a software platform that would help companies navigate the immense complexities of managing last-mile deliveries. Having spent several years developing the product in India and South-East Asia, where delivery logistics challenges are even more pronounced than in Western economies, FarEye relocated headquarters to Chicago and moved towards global expansion, addressing the vast demand across Europe and the U.S.

Compelling ROI and an Enormous Market Opportunity

We first came to know FarEye through its superlative customer feedback and enormous ROI generated for customers – 22% improvement in first-attempt deliveries, two times improvement in courier satisfaction, and 24% increase in on-time deliveries all while providing complete visibility across the entire logistics operations. Spurred by these reviews, we got in touch with Kushal and were blown away by the depth of the platform as well as Kushal’s strategic and product vision.

The FarEye platform provides an incredible range of end-to-end functionality today — all deployed on fully multi-tenant, cloud-native infrastructure — that benefits retailers, carriers, manufacturers, and end consumers alike. Shippers and carriers benefit from automated order allocation and dispatching, real-time dynamic routing, loop optimization and electronic proof of delivery; their customers get slot-based & flexible delivery scheduling, automated alerts and notifications, the ability to real-time track their deliveries, and 24/7 chatbot-based customer support. FarEye also empowers enterprises with the latest advances in real-time tracking and tracing, ETA prediction based on real-time constraints such as traffic bottlenecks, and control-tower visibility of enterprise delivery activity.

At the heart of the FarEye platform is a low-code BPM engine that allows users to rapidly build delivery workflows that can be customized to meet the demands of a particular industry and customer. Customers today span hot-food delivery, pharmaceutical, packaged goods, housewares, industrial equipment, and more. FarEye even counts some of the largest global carriers among its clients. FarEye Delight has helped the company to quickly expand its existing customer base which increasingly rolls out the platform across new geographies and business units while growing its functionality with net retention that is best-in-class.

As e-commerce and broader home-delivery become the new normal, retailers across the world are racing to adapt, while those that do not face the risk of quickly falling behind. For TCV, FarEye is an excellent fit with our overarching strategy of investing early in what we believe to be the franchise technology companies of the future – no matter where they are founded. FarEye joins Cognite, Trulioo, Redis Labs, Revolut, Relex, Nubank, Klarna, Mambu, Mollie, Spryker, and Dream Sports among recent investments made outside the U.S. Based on our experience investing in many other global leaders that were once young growth-stage companies, we believe FarEye has the technology, talent, expertise, and strong track record to become a truly generational software business of the future.

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The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any of the data or statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

[1] MetaPack Global eCommerce Consumer Report, 2020

From Siloed to Contextualized Operational Data – How Cognite is Driving the Digital Transformation of the World’s Largest and Most Vital Industries

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Everyone talks about the transformative power of big data, often in relation to consumer insights. Yet there is a river of information flowing just as powerfully out of industrial facilities around the world – information that could be harnessed to make our planet more sustainable, industries more efficient, and jobs safer.

Industrial companies are waking up to the power of that information, and today we’re excited to announce an investment in Cognite, a global industrial Software-as-a-Service (SaaS) leader, whose mission is to digitalize heavy-asset industries and unlock the power of their operational data.

The Industrial Leaders’ Choice

Founded in Norway in 2017 by Dr. John Markus Lervik, Geir Engdahl, and Stein Danielsen, Cognite has made huge headway in transforming the use of data across oil and gas, power and utilities, renewable energy and manufacturing, using its cloud-based Cognite Data Fusion (CDF) platform. Companies like bp, Saudi Aramco, Alfa Laval, Statnett, and Mitsubishi are already optimizing the way they operate using Cognite’s platform.

In Good Company

Cognite is an exciting addition to TCV’s portfolio and fits squarely with our thesis on the next-gen industrial software space. This dates back to our support for Seismic-Micro Technology (SMT) from 2007, which gave us early insight into how oil and gas companies value operational intelligence – and its importance from a regulatory and operational efficiency perspective.

This investment led to us finding and backing OSIsoft in 2011, which has since become a standard in the Industrial Internet of Things (IIoT) market due to its ability to pull data from sensors and industrial equipment at scale for the world’s largest industrial companies.

Another investment is IQMS, one of the first manufacturing software vendors to natively connect manufacturing execution systems to the ERP software of their suppliers/smaller manufacturers, so they could harness the power of the factory data to hone business decisions.

Across these investments we have seen big data and data-driven decision-making soar and drive a huge opportunity for innovation and investment.

Bridging the Gap Between Business and Operational Data Insights

Digital-first companies inherently operate in a data driven way. They produce a sea of business performance data via their IT systems and are able to collect, analyze and manage that data to plan more strategically and run more efficiently. The opportunity in the industrial space is to extend these benefits, harnessing the oceans of operational technology (OT) data generated by every asset and piece of equipment making up factories, processing plants, or broader industrial estates. To date, turning this data into business value has proved a challenge – not least because OT covers a diverse range of data sources and formats.

The sensors on a single piece of equipment may hold the key to insights about production quantities, efficiency data, motor speeds and heat readings. The challenge is how to combine all those different data points into the right context to assess and improve equipment performance. This is a problem that, until recently, no one had solved – and, frankly, few companies even understood.

A Meeting of Minds and the Missing Contextualization Layer

In 2018, not long after Cognite’s founding, Øyvind Eriksen, President & CEO of Aker, and Kjell Inge Røkke, the majority owner of Aker, came to visit our California offices along with Cognite’s CEO, John Markus – to discuss what they were building at Cognite.

It was clear to us from that first meeting that Aker’s support and industrial expertise, combined with John Markus’ product brilliance, addressed the need for this missing contextualization layer – and that Cognite’s product strategy would be aimed at solving this critical issue. That initial meeting led to a relationship which has culminated in TCV’s investment today.

Cognite uses the latest technology – in particular machine learning – to enable large amounts of information to be ingested in real time and, crucially, contextualized so it can be leveraged for a wide range of use cases. This approach, which improves data’s accessibility and governance across an entire organization, significantly shortens the time to value and scalability of high-ROI applications including predictive maintenance, production optimization, and remote work.   

Fueling Cognite’s Next Growth Chapter

Cognite is the perfect fit for TCV’s strategy of investing early in potential franchise companies of the future. We are thrilled to be part of their next growth chapter and help them scale and catalyze the full-scale digital transformation of heavy-asset industries.

The company joins Brex, Redis Labs, Revolut, Relex, Klarna, Mambu, Mollie and recent investments in Europe and around the world. Like OSIsoft, IQMS, Genesys, Netflix, Spotify and many other global leaders in our portfolio that were once young growth-stage companies, Cognite is forging ahead in a fragmented field to become the category leader.

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The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the author and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

AxiomSL: A Fintech Franchise Takes Off

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The financial crisis of 2008 came as a resounding shock for countless companies, including many in the financial industry itself. But not for AxiomSL, a leading provider of cloud-enabled software for governance, risk, and compliance (GRC) regulatory reporting solutions to the financial services industry.

AxiomSL was founded by Alex Tsigutkin and Vladimir Etkin in 1991. As data management experts they had seen disorganized, unintegrated GRC processes even in highly regarded financial firms. “Everywhere I went, it was the same. The data was all over the place, in different systems and different departments,” explains Tsigutkin, CEO of AxiomSL. “We saw a real need to bring all of this enterprise data together at a granular level.”  Large financial institutions soon began adopting AxiomSL’s software to assemble data they used for assessing risks and reporting financial results to investors and regulators.

Then the repeal of the Glass-Steagall Banking Act in 1999 freed financial institutions to diversify into a wide range of new activities, and GRC processes took a back seat comparatively. The new priority was financial innovation and growth, to extend the United States’ position of prominence in global finance. “For years, the government and regulators didn’t put that much pressure on financial institutions,” Tsigutkin points out. “That changed completely after the 2008 financial crisis, and that’s when AxiomSL really took off.”

By this time, the company’s software data management platform and related algorithms organized operating data to align with the latest requirements of various regulatory authorities in multiple countries globally. These category-leading capabilities spurred AxiomSL’s sales growth into double-digit territory. International business began climbing too. “We were growing like wheat in the fields,” says Tsigutkin, a native of Ukraine.

But growth also brought some challenges. AxiomSL had always given its customers attentive support, especially when they were new to automating GRC processes. With rapid growth, that level of care was becoming harder to sustain; a successful strategy for landing and expanding clients was reaching its limits. “It’s very difficult to do everything on your own, especially dealing with a large and growing client base at the same time,” Tsigutkin says. “I felt this was a great opportunity to put some expert disciplines together. When I got advice on how to do that, it was to bring top notch growth equity into the mix.”

So Tsigutkin invited growth-stage investors to present their ideas for AxiomSL, including TCV, a firm he knew well from regular interactions in the past. With around $2 billion already invested in fintech, TCV understood that AxiomSL’s business could grow even faster for three interrelated reasons: an explosion of data in the financial world, proliferating regulations around the globe, and sharply higher consequences for financial companies that mismanaged them. With tighter financial discipline, more proactive sales efforts and scaling up systems and processes, AxiomSL believed it could become not just a category leader but the global standard for risk management and regulatory infrastructure solutions for the financial services industry.

“As we talked with private equity firms, TCV was distinctive in a number of aspects,” recalls Etkin, the company’s CTO. “They had proven success with fintech and GRC companies, so their long-term vision for AxiomSL and their approach to collaborative business-building really stood out.”

TCV invested in AxiomSL in June of 2017, and the new partnership moved fast. “TCV knows how to focus on what’s key for scaling a company, not just growing in the same way,” Tsigutkin explains. For example, TCV pinpointed the need for industrializing sales, sales leadership as well as more robust processes for planning and budgeting. “They also helped us understand how to use equity to attract and reward people,” Etkin notes, which enabled the company to recruit multiple new executives with significant experience scaling similar organizations.

“TCV saw in AxiomSL a category leading industry-specific software business with next generation technology, a highly satisfied client base, a mission-critical use case, – and most importantly, product-centric co-founders and partners in Alex and Vlad who had deep subject matter expertise and a strong growth orientation.” recalled Nari Ansari, TCV general partner and former board director at AxiomSL.

The collaborative approach between AxiomSL management and TCV helped AxiomSL accelerate growth, increasing software revenue over 150% in three years. Its ControllerView® intelligent data management and analytics platform could provide thousands of reports across dozens of jurisdictions and more than 100 regulatory agencies. From 60 employees during the financial crisis, the company had grown to nearly 900 globally. According to Tsigutkin, “having such a strong team really helped us to build a world-class organization.”

Consistent with TCV’s longstanding investment thesis for governance risk and compliance solutions, change and complexity can provide for significant opportunities for leading software vendors.  Indeed, AxiomSL’s positioning for its offering set has been as a “Platform for Change” given the constantly evolving regulatory environment for financial services market participants.  As the business entered 2020, that change orientation would become even more paramount.

“As COVID-19 started in early 2020, the world changed quickly, and the swiftness of market happenings was adding increased complexity for banks and regulators alike. During this period, AxiomSL’s value proposition in understanding and managing risk continued to demonstrate its importance and the business saw sustained momentum throughout 2020,” remarked Amol Helekar, a TCV principal. 

When the pandemic hit, AxiomSL as an organization had to adapt as quickly as its customers. “Being with TCV during this period was absolutely a blessing,” Tsigutkin recalls. “First they helped us to stay calm and provided very sound advice about our talent strategy and the welfare of our valued Axiom team members. Then they helped us focus on execution and growth. Moving more into digital marketing, for example, really enabled us to keep growing in 2020.  TCV also supported us as we increased our investment in cloud offerings which became even more important in a distributed COVID world for our bank clients.”

AxiomSL’s hyper-growth during the TCV partnership resulted in consistent market share gains. Along with the company’s strong profitability, blue chip client list and technology leadership, these attributes brought interest from outside parties, particularly private equity firms. As Rick Kimball, TCV founding general partner and former AxiomSL board director remarked, “Alex, Vlad, and the team transformed the organization during our partnership while deftly executing a growth agenda that expanded the business on multiple dimensions.”

In the fall of 2020, TCV worked collaboratively with Alex, Vlad, and the AxiomSL management team to assess this external investment interest and prepare the business to explore various alternatives. Ultimately this brought an offer from private equity firm Thoma Bravo to acquire a majority stake in the company.  The new investment closed in December of 2020 in one of the largest GRC transactions of its kind, and Tsigutkin took a moment to reflect, “Our growth is due in no small part to the contributions of TCV, who has been a critical partner for AxiomSL for the past three years as we grew the franchise at a record pace.”

Tastytrade interview with Chuck Davis of Prodege | Bootstrapping in America

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From starting a football newsletter as a teenager that led to an internship with the NFL, to pioneering e-commerce at The Walt Disney Company and leading Fandango and Shopzilla.com as CEO, Chuck Davis has great stories and valuable lessons to share.

Chuck Davis is the CEO & Chairman of Prodege, an internet and media company that is dedicated to “creating rewarding moments” for its members by rewarding them with more than $700 million in cash and free gift cards since inception.

Prodege is the parent company of consumer rewards platform Swagbucks and InboxDollars and cash-back shopping sites MyPoints and ShopAtHome which has awarded over $700 million to its members.

Hear more about Chuck’s journey on this video interview for tastytrade‘s “Bootstrapping in America” episode, hosted by Tom Sosnoff & Tony Battista.

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Chuck Davis is a Venture Partner at TCV. Prodege and tastytrade are TCV portfolio companies. Fandango was a TCV portfolio company.

The views and opinions expressed in the blog post above are that of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.