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Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell (Part 5)

Posted on Friday, Jan 6th 2017

Sramana Mitra: What was the financial engineering behind the acquisition?

Ryan Caldwell: We acquired their company for mostly stock in MX.

Sramana Mitra: You said you and a few others invested in the company and got things going. At subsequent financings, what were some of the milestones that you managed to knock off?

Ryan Caldwell: The big thing for us was just scaling the number of financial institutions that were signing onto the platform. For year one and year two, we rapidly scaled past 100 and then 200. We started with the smallest financial institutions first. In fact, we have this well-known policy that I was strict on called the no whale hunting policy. Even though some of the largest banks and some of the largest partners were very interested in what we were doing, we felt that it was important for us to be disciplined to not try to hunt a whale.

If you have a really large bank and express strong interest, the big bank makes all sorts of demands about features that may or may not even make sense for them or for their customers. If the company is not large enough, they don’t have the ability to dictate to the bank. We decided that we were doing to start with the smallest financial institutions first.

Sramana Mitra: Those were credit unions and small banks?

Ryan Caldwell: Yes.

Sramana Mitra: You managed to get hundreds of customers in the first couple of years. What was the sales cycle?

Ryan Caldwell: We started with the small end because, for one, they were so happy to have a great product like this. You could quickly get a hold of the higher-level decision makers at a smaller financial institution. You’re able to get a decision much faster. Usually, it’d take a couple of months to be able to contact the financial institution, help them understand what the offering was, and be able to help them understand how they would implement it and benefit from it. Those early sales cycles were pretty fast.

In the beginning of the company, we discounted the product either heavily or, in some cases, gave it to those financial institutions initially for free. Once we got past about 50 to 75 financial institutions, we stopped doing any kind of heavy discounting. We rapidly moved up to larger institutions. In the last few years, we now started working with the trillion dollar plus institutions.

Sramana Mitra: Could you comment on direct selling versus closing deals on the phone? What were the average deal sizes of the first hundred financial institutions that fell in the small institutions category?

Ryan Caldwell: Some of them were very small – a few thousand a year if not less. Some of the larger deal sizes now are $5 million a year plus. Those can be four or five-year contracts.

This segment is part 5 in the series : Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell
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