Duco van Lanschot: Co-Founder and CEO at Duna announcing a $30m Series A!

0:00David Schreiber:Hello and welcome back to the Scaling Europe show presented by Deal. I am Seb Johnson. Today I'm joined by Duco. Duco is the founder of Duna. Duna has got some super exciting announcements, super exciting news. What's going on today?

0:11Duco van Lanschot:So today we're announcing our 30 million Series A led by Capital G with continued participation from amongst other index ventures, puzzle ventures and other backers.

0:22David Schreiber:this is amazing news it's not long since you your index led round i think it was last summer or late spring last year and now barely any time at all you've raised a bigger round for some great investors before we get into the round let's just talk about duna for those who don't know

0:37Duco van Lanschot:what is it that you've built so what we are and it's something's a bit more complex so i always get the feedback you don't pass the granny test it is too hard to explain to my granny but i think the easy explanation what we want or maybe the easy explanation what we do is when you have large banks large fintechs platforms and financial institutions they often need to check their business customers and we do do that on behalf of our customers so large enterprises like plait like ccv owned by fiserv credit card company moss the amazon of the benelux etc so take the german or the US fintech, Platt, with over 500 million in funding, billions of dollar valuation, when they onboard a new company on Platt, they need to do all type of business identity checks to avoid money laundering, fraudulent activity, etc.

1:33Duco van Lanschot:So we do that on behalf of them, verifying ID documents, checking whether a company exists in the company house, analysis of online activity, monitoring whether individuals are not involved in crime and money laundering and not linked to sanctioned individuals russian oligarchs etc so that is our product what we do today and our longer mission our bigger vision is that we want to build global trust infrastructure by providing a digital passport for every business and the idea is that over time all the businesses that are onboarded on duna evolve into a network for shareable business identity and one-click onboarding amazing and you raised i think it was 10 million

2:13David Schreiber:euros led by index last may you've now announced a 30 million dollar series a which is a very short time frame to go from you know 10 million c 30 million series a what's happened you know what's happened in the last eight or nine months that has enabled you to raise this big sum of money from a

2:30Duco van Lanschot:great investor yeah so what has gone well is like we've raised uh now additional due to the strong traction that we see with leading enterprise customers so if you take a customer like like like CCV, which is owned by Pfizer with a market cap of$35 billion, HotelSize, Unicorn, Muse, who just raised at a$2.5 billion valuation. And I think it's the big investor acknowledging the huge opportunity that you still see in the identity space. So we're going to use this funding once to accelerate our traction that we see and expand that traction in the enterprise growth and to double down on the expansion of the enterprise AI capabilities in our platform.

3:15Duco van Lanschot:So deploying compliant, auditable AI that meets the standards of regulators. Then if you take a step back, what is the bigger view why they are investing that money is that, and I said it just before, identity is one of the internet's biggest unsolved challenges. And if you think about it, one example I love to use is that in 1993, so almost 40, over 40 years ago, the New Yorker published an iconic cartoon featuring two dogs. So one sits in the front of the computer and the other one sits next to him and says, on the Internet, nobody knows your dog. And now we're here 40 years later, you know, and very little has changed.

4:00Duco van Lanschot:So all identity remains tied to legacy systems. It results in fraud and fiction and billions of dollars of fines. Compliance and identity now consumes often up to 10 to 20 % of a bank's total costs with expensive and manual legacy systems. And that makes it an ideal use case for AI automation.

4:21David Schreiber:Amazing. And you seem to be absolutely crushing it. You're also, you and your co-founder, in many ways, a dream founding team. You both got amazing experience at the likes of Stripe and Trade Republic. public was it those experiences at those amazing companies that kind of showed you the problem that

4:37Duco van Lanschot:this was that the size the problem that you're now fixing oh yes definitely so at at both of these companies um as a company we're of course onboarding millions of customers and you're known as to great fintechs at like being the best of the industry at doing this but as often when you get to look behind the curtains you also get to see a bit what you can improve and and and the challenge there is like even though these fintechs are very good at doing that it is something that is mission critical but not your core business and in something is mission critical but not your core business your best engineers are not working on your onboarding and compliance platform and as such there's a massive opportunity to unlock that and bring the best engineers to the 99.99 % of other companies out there who would love to onboard like these companies, but who are not able to do so today.

5:33David Schreiber:Yeah, it makes total sense. You've just raised this 30 million. I can't imagine you really needed to raise it given your last round was so recently. What are you going to use it for? How are you thinking about growth, expansion? How are you going to use the money that you've now raised to accelerate even faster?

5:50Duco van Lanschot:Yeah, so it's purely an expansion into the into the team and into the product right now r &d is around 84 of the people the people at duna and we're planning to continue havingrd at at least 70 to 80 percent so that's where most of the the the investments are going at the same time it's also sort of correct like we didn't necessarily need to raise that money and it wasn't urgent but what we're also seeing is what we are building and also what we are giving to our customers is trust and we were increasingly being in conversations with enterprise customers who said like well it's great that you guys have a 10 million seat and of course that's probably large for a seat but you know i am company x with a 10 billion or 20 billion market cap and i don't give an ass about your 10 million seat i need to know that you guys exist in five years from now so this round is also very helpful in showing the the trust and the confidence and the sustainability of our

6:49David Schreiber:business for these enterprise customers amazing and you think this round is going to help solidify yourselves and give you that those credentials that you need well definitely that's definitely

7:01Duco van Lanschot:i mean in the end the proof is in the pudding the quality of your product the quality of your team the quality of the impact that your product has and this is just one of the components that helps for that but as i as i also said here internally it's like of course funding is great and it's a sign a positive sign that we're in the right direction but a bag of money doesn't build a

7:20David Schreiber:great business yeah i want to talk to you about the way that you're building your business there's a few really interesting cultural points that i wanted to pick up on firstly being remote first it feels like a quite an unfashionable thing uh at the moment like there's a lot of like oh 996 in the office you need to be like heads down building together um you know you're building you're building from the netherlands your co-founders in germany how are you finding at building remote first?

7:45Duco van Lanschot:For us, it works well. You just need to be very mindful on what the processes are and the structures that you put in place. And certain things go less natural than in an office. But if you take a step back on like, it is not the flavor of the month. But I think one of the problems is that often in tech and especially in VC land, a lot of people just behave like a freaking herd of sheep and they don't have an own opinion. So it's like in Corona, we all needed to be remote first. And now we all need to be in office. But guess what? the reality is not always black or white like there's many great companies who decided to move back into office there's also many great companies like a remote or or a deal or a git lab that are fully remote and are doing that great or many successful crypto projects so i think this whole discussion on everything needs to be 996 or everything needs to be in office or everything needs to be out of office sort of takes the the nuance out so i'm not a big i'm not a big fan of

8:42David Schreiber:that yeah no i agree i spent several years of my career at deal and i thought it was an amazing company they scaled to you know a billion of revenue in record time while being entirely remote and i think one of the one of the interesting things about being in tech is that it's almost like you can never make a wrong decision because even if you're if you're following the herd people like it but if you're doing what the herd isn't doing you're seen as contrarian and people like that so it's like it doesn't really you know there's always a way there's always a way of

9:11Duco van Lanschot:twisting it um and maybe maybe one one additional thing to um to add to this is if i would have a company if i would have started this together with david in san francisco we would 100 be an in-office startup and the reason is just talent density in my experience though the mission district in san francisco has a higher talent density than berlin and amsterdam combined so i think it's also here a benefit for us in europe where we want to hire early stripe quality engineers top-notch engineers yes maybe within amsterdam or within berlin itself we have a bit less part of the workforce that we can appeal to but the benefit is we can just get references and referrals that work basically anywhere in europe and go after them and hire these people for a company so i think from a talent density and a talent pool perspective it is in europe actually something that can also be a very big usb yeah i think it's one of the problems that we have in

10:14David Schreiber:europe is that so much of our talent is in these different ecosystems and hubs and you're right being remote first enables you to tap into the best talent from amsterdam germany the uk nordics wherever but one of the things i found a deal being remote i think you can make it work remote when you still are able to build a really strong culture and you know when i was doing my research one of the things that really came through about the culture that you're building is this culture of transparency so you've talked a lot about transparency can you touch on what that means and why it's important for you yeah so what transparent for us means is that

10:47Duco van Lanschot:most organizations they make a deliberate decision when they publicly share information internally within their company at duna this actually works completely the other way around So information is default public, not default confidential. If there's no clear reason to hide it, so unless it's like private data, private feedback, PII, etc., if there's no reason, we share it. And in our distributed model, our remote-first-world model, this transparency is really one of the foundational principles. because when that critical information is completely open and not guarded by senior leaders, it creates the high trust, high ownership culture that we want to give to anybody.

11:32Duco van Lanschot:If you do have it in silos, there's always this information asymmetry. You already have that in an office, but in a remote first world, you have even more of that. It stifles innovation. It stifles collaboration. It stifles initiative. So we see this as a crucial ingredient. what does this then look like so for instance almost everybody can see almost every email like ibcc unless it's private ibcc and archive archive so we have an archive that's called investor-archive at duna.com we have a lot of we have a lot of people colleagues who just love to lurk and they just basically see me emailing or my co-founder david emailing with investors and then they lurk in another thing is we record and we share all meetings and transcribe them in slack we try to put all business questions in a public dm so not in private channels or our knowledge on the google drive is in shared folders and shared open drives and that includes our board meeting deck it includes our board meeting notes um the compensation levels are open the financials are open and honestly people who come in they say like i read it on the website but now that i'm one weekend holy s it is indeed the case and it's one of the prime things that people who people who work here they generally really love that they can lurk into every rabbit hole that they like whether it's finance or marketing or sales or devops or or back end or front end everything

13:01David Schreiber:is open that's amazing i mean i i would love that to be you know being in a company where they share the suits so you share board meeting investor emails financial results do you have like is

13:12Duco van Lanschot:the cap table public or is that private no also the cap table is public and and i think i think it's by the way you're touching you're touching upon a very good question because this was one of the things that made me most uneasy because it was like oh my god everybody in the company knows exactly the amount of shares that i had and i must say it took a bit of a threshold to put that across and i also asked david like do you are you comfortable with that and we said like yeah let's do it and it but the moment it's out there it's also sort of liberating it's not super interesting you can just type in your browser go slash cap table you can see the cap table yeah whatever

13:47David Schreiber:that's amazing i love it and i i also want to talk like again similar to culture you know i also read that you there's a foundation that owns a third of the business yeah is that right can you

13:57Duco van Lanschot:talk a bit about why that was important to you one what maybe taking a step i have a friend of labu uh shirt brands and they built uh clubhouses and refugee camps and he often asked me after stripe like why don't you start a non-profit i thought that was actually a funny question like why do you start a four-pros business didn't you and didn't you all you guys already do well for yourself we need people like you to start it to start a non-profit and i spent a lot of time thinking about that question because i didn't really have a great answer and the conclusion where I landed is what I eventually said to him and I've been on the board as an advisor to certain non-profit organizations and even though they were non-profit it was always about money because they didn't have money and I actually love that at Stripe we were for profit but it was never about money we were talking about cool products to build we were talking about initiative about entrepreneurial aspects it did create the introspection with with David and I where we like well we can still have our for-profit which is what we want but why can't we combine that with just giving away a lot to society and ingraining doing good and not abusing your customers or the world around you can we ingrain that into the governance so like ethical by design and that's where we started brainstorming on various corporate governance methods to do this and we eventually came to the conclusion um what is something that all vc investors accept that is having a third co-founder and if we would make this 10 but it doesn't dilute it's super hard to to think about how the scenario analysis on your future cap table but if we just say like this is a third co-founder and this third co-founder happens to be a foundation it makes everything very easy just common stock same as the other founders it only happens to be owned by non-profits that's amazing

15:56David Schreiber:and were there what was the reaction like from vcs did it bother them at all was there any pushback

16:02Duco van Lanschot:so i would say honestly over 90 has been positive yeah like oh that's actually cool and then there's been like 10 all of which were american who said like uh i'm not sure what you think about this are you guys enough incentivized? And I just thought, yeah, whatever. If you think that this is how we're getting incentivized, you're not doing an effort to try to understand what motivates us. And we're not getting motivated by the fact that we make one third less because it goes to non-profit. When Duna does well, we wanted to give away at least one third to non-profits anyways. The only thing that we did is we just transformed it to the incorporation of the company instead of like years down the line when you get a payout.

16:43David Schreiber:Yeah, it's amazing. I guess it's a very quick way to see if you're going to, you know, get on or vie with an investor. You know, if they don't get it, that's fine. And you're probably not a good match.

16:51Duco van Lanschot:No, but like, I mean, Index is fantastic. And Capital G are two fantastic investors. Index last year had a killer year with, from Wiz to Figma to the new Revolut round, et cetera. And Index was fully supported and they understand it. And I only heard positivity from them. So I think if you dive into what are the people you're investing in, and what motivates them, this doesn't need to be a blocker, it can be something positive.

17:19David Schreiber:Yeah, I mean, and it's one of the world's greatest, definitely one of the greatest that's been born out of Europe. So that's great to hear. I always want to talk about a bit about your background and some of those experiences that you've had in your career and how they're shaping the way that you're leading this business. So obviously, I think you were the first employee in the DAC region. And the Benelux region. Benelux region, sorry. Yeah, Benelux region. You're also an amazing ultra marathon runner. So you have these like, sort of like quite interesting uh backstories like and just before this interview i was interviewing some ex-revolutus and you know when i speak to ex-revolutus there's very clear cultural traits that they bring with them to the next business and it's often about data analytics execution high bar for talent what are some of the things that stripe has taught you that you're now carrying with you as you build your own business and then i want to talk about lessons learned for being an ultramath and runner yeah

18:09Duco van Lanschot:Okay, so from Stripe, I think one of the things Stripe did very well was high talent density. Hiring very talented people. One. Second thing is they really cared about culture. And I can't attest for like after Stripe was more than 2 ,000 people, but all of that run until the 2 ,000 people when I was there, I think they did a great job at the culture and having that culture internally and the importance of that and hiring and cultivating people in that culture. the third thing is stripe is very adamant on building high quality infrastructure and you see that a lot with like former stripe people i recently saw things on like a stripe mafia like a lot of ex-stripe people are building infrastructure or or lnm or ai infrastructure or those type of things so i would say those three things and what what it has also taught me is that there is there is not necessarily right or wrong in culture and i think that is there's just a line like maybe a revolute is completely different i would say from stripe like i don't think i would be great for a revolute culture and i don't think that the standard revolution would do well at stripe it just shows me that you need to have a type of culture and hire people according to this culture and then there's multiple ways that lead to roam but don't mix these cultures or try to be another culture or try to just imitate somebody else because what works for them is a playbook that not necessarily works for us that's super interesting yeah and

19:36David Schreiber:And you're right, you clearly have a very different culture that you're building versus some of the people that have met at Revolute. And they're both very high performing, but both very distinct.

19:45Duco van Lanschot:Yeah, and on this hustle point, I just disagree with this hustle 996 culture. I think it's total bullshit. Everybody keeps saying that now the only way is 996 hustle culture, but guess what? Five years ago, it wasn't. It's just the new fashion trends. like i think that if you hire people who are very motivated who are exceptionally ambitious you don't need to 996 hustle them we have a crazy amount of people here who will pick up their kids sit with their kids between five to seven who pick up a laptop and who do we do pull requests at 1 a.m but we are not telling them that it's 996 we are not counting their hours and we were

20:24David Schreiber:never at strife and the company did great yeah i think it's amazing i think you're right it's just such so of the moment you know and i think people love to jump on the bandwagon um and then i'm really we're out of time uh but thank you so much for joining me congratulations on the raise it's like an amazing it's amazing news and it's a it's amazing to speak to a founder who is going against the grain right and who who isn't buying into the in-office 996 and you're building a remote first team despite it being so unfashionable and you're clearly crushing it yes and if people are listening

20:54Duco van Lanschot:we are hiring for many roles from back-end engineers, front-end engineers, go-to-market, account executive, product marketing, etc. Check out duna.com slash careers. duna.com slash careers.

21:08David Schreiber:Love it.

21:09Duco van Lanschot:Do it.

21:10David Schreiber:Superchartial career. Jump on the rough and shit. We'll let you, but thank you so much for joining me. Best in lobby.

21:14Duco van Lanschot:Thank you, Seth. Bye-bye.