Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell (Part 6)

Sramana Mitra: The first hundred that you closed, were you able to close them on the phone?

Ryan Caldwell: Yes. We had to visit some people but, we were able to close most of them over the phone.

Sramana Mitra: Teleweb sales, yes. Of the people that you closed in that first wave of going after the smaller financial institutions, how did those accounts grow from those couple of thousand dollar accounts? Did they grow to become larger accounts?

Ryan Caldwell: A lot of them were buying the first product. Not a huge percentage of them grew into larger contracts. The most significant of those grew rapidly through “land and expand”. Some deals that were $20,000 to $100,000 a year would grow to $2 million a year account.

Sramana Mitra: From that pool of couple of hundred customers that started off in the small deal size categories, you did get a bunch of larger deals?

Ryan Caldwell: Less than 10% of them grew into larger deals. Some of them were small where they could only buy the basic features of the product and get utility out of that. For others, once they had the features, they’d want to do analytics and marketing on the data. They’d want to do additional things on the data. They’d also want to implement our products across more of their mobile and online banking products in a more embedded way.

Sramana Mitra: At what point in your evolution did you switch gears to start whale hunting?

Ryan Caldwell: It wasn’t binary. It wasn’t on or off. It was stepped. We just started to sell to larger financial institutions. At first, you might see $500 million assets under management banks or credit unions. Then we’ll sell to a billion dollar bank. We kept working our way up. Those would happen in steps and stages. Part of the reason for that was because financial institutions wanted to be reassured that we’ve already handled customers that are about their size. You can’t jump quickly to the large ones without getting sucked into a very long sales process.

Once you’ve proven that you can properly serve a financial institutions around their size, then the sales cycle goes down quite a bit because they’re confident that you can take really good care of them. We, very quickly, worked our way to the next step, but it wasn’t a big giant leap. It was pretty quick. If you imagine jumping up one big step, imagine a hundred steps where we were running that staircase.

Sramana Mitra: Step us through the financing rounds as they came together as you were progressing through these steps?

Ryan Caldwell: Internally, a lot of the management had the ability to continue to invest in the company and were willing to. We all kept investing. Then we had a few angels. One, most notably, came in and felt very strongly. He invested in a few companies early on when the market cap was less than pre-money valuation. He had a few investments like that. He looked at where we were as a company.

When we started to talk to venture capital firms, he asked us the maximum that we were going to raise and what the maximum valuation we were looking for. He saw it as an opportunity to get more of the company. He invested with us as a management team. We went out for our Series A two years ago. We raised a large amount in that Series A by bringing in one of our banks who understood the technology.

This segment is part 6 in the series : Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell
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