Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 6)

Sramana Mitra: At this point, it’s more of executing the business that you’ve described so far?

Alex Baydin: Yes, that was the last pivot that got us sustainable traction. We’re still very focused on consumer finance because it’s such a big category. As I mentioned, the platform and the technology provide this level of sales, marketing surveillance, and remediation across six channels: Web, Call Center, Email, Messages, Social, and Documents.

Sramana Mitra: What kind of revenue level are you at now?

Alex Baydin: We are approaching $20 million.

Sramana Mitra: It’s still bootstrapped?

Alex Baydin: We did a deal to sell some secondary stock for some of those initial investors who were in the old model. I and my management took some chips off the table. We have a financial partner now who is helping us build an M&A strategy. We did our first acquisition about two and a half months ago.

Sramana Mitra: What is that acquisition?

Alex Baydin: That company is called LashBack. That was a deal about product extension. We had known them for a while. They are very good at email compliance. They had a couple of features that we didn’t have in our email product. We share quite a few logos where a customer would buy five channels from us and still buy email from LashBack. We decided that we could take this collective business to the next level. That acquisition closed about two and a half months ago.

Sramana Mitra: Do you have, on your radar, other companies that would naturally fit into a roll-up?

Alex Baydin: We do. We think about more product expansion. We think about vertical expansion as well. Then we think about geography expansion as well. Most of our revenue is from North America focused although some of our customers have taken us to other parts of the world where they do sales and marketing. We also know that the regulators in the UK have a very similar focus on consumer protection around the types of products we’re focused on.

Sramana Mitra: Fintech is big in the UK.

Alex Baydin: That’s right. That may be a good place for us to look to acquire other businesses.

Sramana Mitra: You’re working with a private equity fund?

Alex Baydin: That’s right.

Sramana Mitra: Which one?

Alex Baydin: M33 Growth.

Sramana Mitra: My last question is about the RegTech space. How do you see that space evolving?

Alex Baydin: There are a lot of companies over the last three years that identify themselves for the first time as regulatory technology companies. It helps analysts, reporters, and investors to put you in some box. Compliance is a huge opportunity for software companies that are B2B. Compliance, itself, is very broad.

There are lots of elements of compliance whether it’s more traditional banking, identification services, and whistleblower platforms. The whole traditional GRC space has a lot of entrants as GRC is being rethought. Then there are companies that have the technology and are in search of solutions.

I think the space will continue to grow. The compliance department has gotten more and more buying power in the enterprise. The talent level that’s attracted to compliance has gone way up just in the 10 years we’ve been doing this. They’re getting bigger staff with bigger budgets. They have a seat on the table because the risk is so high. They want their people to be able to tell data-driven stories. There’s a lot of opportunity to sell services and software that creates efficiencies and mitigates risk to the compliance department.

Sramana Mitra: Great story. I enjoyed listening to you. Thank you for your time.

This segment is part 6 in the series : Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin
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