Mr. Bence Jendruszak, Co-founder and COO at SEON shared his paths and views in his start up life outside a traditional Tech Hub. He answered few questions which is sure to benefit the budding minds or anyone who is in the mindset to start a new business.
On the question asked, what made him realize that they were going to need an investor onboard, “During the early stages of the development (when completing our minimum viable product), we managed secure a Central European payment gateway in order to start using our system (free of charge). From this point on our product development was user feedback driven. It was at this stage, which we realized that our product has gained enough proof of concept, that we were ready to pitch the idea to investors.” he answered as such. Their Pre-seed investment of 50k EUR in January of 2017 was the initial kick start to arrive at that point of current scenario. He said, “That micro-investment allowed myself and Tamas (Co-founder and CEO or SEON) to start working on the project full time and also to scale up the development team (from freelancers to full time programmers).”
“We were very well aware of the challenges. The European investment mentality is different than that of the US investment mentality, for example. Investors tend to be more conservative in the EU. Now imagine what the investment mentality may be like in the CE region. Nevertheless, we were also aware of the advantages of setting up a tech start-up in the CE region. The talent pool of engineers and the cost of labour is by far the best in our home-turf – so the challenge was worthwhile.” They faced multiple unacceptable deals, the terms and conditions were not right for them in the long term and that they were always aware that in order to build an international startup, they had to have on board the investors, who were fully functioning and comfortable to co-operate with and vice versa. “We needed to be on the same page and have a shared vision for SEON’s future.”
“Aside from receiving a financial investment from the fintech fund of Portfolion, we can happily say that we are providing our fraud prevention services to OTP Bank as of today.” were his views on finding the lead investor Portfolion. “Portfolion is a well renowned VC in the CE region. They seemed like a partner that we could have on-board into our boat and we could steer the ship together with them.”
When asked about the learnings he gained while his time as investor landscape in CE he said, “We found out that European investors are even more skeptical when it comes to CEE countries. They tend to avoid start-ups that aren’t located in hubs like Berlin or London. For them, Hungary is still seen as a former Eastern bloc country playing catch up with the rest of Europe in terms of living standards and infrastructure. That said, there are a lot of investors in the region, but you really have to focus on getting in touch with the right organization. Onboarding an investor is a long-term partnership, there has to be a fundamental alignment in terms of the vision and mission of the two teams. We believe that we’ve managed to partner with investors who share the same vision and mission as us (up to date).”
To conclude he advised the businesses that are looking for funding in the CE region, “Do not rush into any deal that is in front of you, time is on your side. If you are in an early stage, make sure to approach as many investors as possible, in order to be able benchmark each opportunity.”