Paulo Guichard: Co-Founder & CEO at Condukt announcing their $10m round!

0:00Hello and welcome back to the Scaling Europe show. I've got an amazing guest today who has just announced a$10 million round. Hello and welcome. Can you give us a quick introduction, talk a bit about the round? Yes.

0:12Paulo Guichard:First of all, Seb, thank you for having me here on the show. My name is Paolo. I'm a co-founder and I'm the CEO of Conduct. Conduct is a business identity platform. So what we do is we help financial institutions, fintechs, and the wider ecosystem to get business verification insights, whether it's for onboarding, monitoring, and the writing. And so we do that by having built a business data, real-time infrastructure that fetches this data from authoritative sources, such as business registers, but also open source data. And then on top of that, because we do have that real-time infrastructure that we built, which is proprietary to us, we actually built our own agents that automate a lot of repetitive tasks within these companies.

1:06Paulo Guichard:So we end up helping product owners with conversion. We end up helping operations leads with more efficiency within their teams and also compliance and risk functions, staying more compliant and always being on top of the risks that surface around their business. Amazing. Look, it's super exciting. You just raised$10 million. I think it was led by Lightspeed Venture Partners and MMC Ventures. Can you tell me a bit about that round? I think you've been building in stealth for two years. what have you kind of seen? What success have you seen that then unlocked this big round? Yes, of course. So I think, first of all, in terms of the round, the same way VCs like to bet on people, I think also founders like to pick people that they feel comfortable and they think that these people would benefit their business and that are closely aligned with the mission.

1:59Paulo Guichard:And so for us, we were looking for people that understood how to build infrastructure at scale. first of all. Second of all, also that they had experience with agentic solutions. And then lastly, that also could add to our go-to-market strategy and execution. And I think we found a great meeting of minds with Alex Schmidt from Lightspeed, Oliver Richards from MMC, and also Anthony Dannen from Cocoa, that these were individuals that have been helping us along our journey and around these points. I think from a risk and compliance perspective, both me and my co-founder came from the field. And so we were well-versed.

2:42Paulo Guichard:But on the other points, we did obviously benefit. I think when we entered stealth at the beginning, it's very important for a founder to think about why are you entering in stealth and what will make you come out of stealth. And so for us, it was about, look, validating the problem. And we have been in the industry, so we understood exactly the pain points. we were on the other side of the table. Being able to build a team of top talent, and we did that, we brought alongside with us a lot of the engineers that worked with us at Revolut from the FinCrime team, but also our machine learning team comes mostly from places like Meta.

3:20Paulo Guichard:Then also being able to build infrastructure that enterprise customers can use at scale, and so that is validated by a lot of the logos that use our product, such as Wise, Tide, Rakuten Bank, Shift4, Flatbay, MyPoss, Molly, CatChase, et cetera, et cetera. And so the only thing left for us to announce this race was really to show the data points about the effects of the product, right? And since it's been a while since our product has been used at scale by these brands, We started seeing an increase in the auto-approval rates within these companies by 78%, close to 93 % time saved by the operations analysts.

4:06Paulo Guichard:But also, and I think that also speaks for itself, is because of our real-time data infrastructure, companies were seeing 99 % plus data accuracy on their onboarding checks. So this always helps in terms of conversion. It also helps with reducing the manual caseload that goes to the operations agents. But also, especially for the risk and compliance functions, they knew exactly which businesses they were onboarding with the right date. And that gives them a lot of comfort. Amazing. So I guess it was a combination of, as you mentioned, like a stellar team, XRevolute is always going to help. Traction.

4:42You know, you mentioned there's some amazing clients, Wise, Tide, Molly. And then also actually real results of your products. You know, that you're actually moving the metrics that demonstrate that this business has built a valuable product.

4:54Paulo Guichard:Is that right? Exactly right. And, you know, I've spent most of my life in fintech, but especially in B2B. And there's a big difference between B2S and B2 enterprise. The enterprise sales motion is very cold in the sense that you need to prove results to these clients. And so that's always something that was always big for us since the beginning. And our clients don't buy without a data test. And when they compare us to the large incumbents in the industry, companies that have been around for the longest time, they always see that the data quality is pristine and directly from the source and fetched in real time.

5:31Paulo Guichard:That's always what makes us win any kind of RFP, any kind of sales motion. and so that's that's really how we've managed we've managed to to excel at the end of the day was really by showing proof of the results and making sure that ultimately it benefits product teams operations teams and risk and compliance functions and how did you get that ball rolling you know you've signed some amazing clients but you've been in stealth for a couple of years when you're selling it initially to some of these large companies how were you able to prove it or How were you able to convince them to sort of take a bet on you when you didn't necessarily have the results to date because you were too early?

6:09Paulo Guichard:It's an interesting question. It's a question that we often get because our first clients were actually unicorns and were enterprise clients, right? We didn't start by selling to startups. Look, it goes back to a couple of factors, I would say. Look, as both me and my co-founder, we had been on the other side of the table, as I said previously. We encountered a lot of issues during the onboarding journeys. I was previously at SumUp and Revolut. He was previously at Square, now Block and Revolut. And I was on an operations and product capacity. And I saw how conversion rates were suffering because of the lack of good data.

6:52Paulo Guichard:but also I saw how manual the processes were. I remember for Revolut acquiring, I had to onboard manually the first couple of merchants and I saw that actually. I believed the problem. And so it was very easy for me to have empathy for the other people on the call when pitching to a client because I understood exactly what they were going through. Same thing goes for my co-founder. He was head of risk for international markets at Square and also head of risk for Revolut acquiring and he faced the same pain points. You couldn't get reliable data. And then even if you wanted to monitor businesses, you couldn't know whether or not this data was actually of good quality, but also you couldn't monitor them in real time because none of the other providers had this real-time data infrastructure in place.

7:41Paulo Guichard:and so I think first of all it goes back to our experience pre-conduct the second point was really look our our company was founded by engineers that have lived this problem on the fincrime team at Revolut but also people that have built machine learning products at companies like Meta and then I would say another another point for us was that this coupled with the names that were backing us such as Lightspeed or MMC also gave a lot of comfort for these companies to bet on that. So I think it was really a question of getting the ball rolling. And it's like everything in life. The first one is the one that takes a little bit more effort, and then it becomes a little bit simpler as you go.

8:27Yeah, and I can imagine it's going to be easier for you in many ways because you've started with those big enterprise customers. You haven't started with the scrappy startups and then had to work up. You've onboarded some of the most well-known fintech brands across Europe. So it should, I guess, get easier from then on. How are you thinking about breaking into some of the more established financial institutions? Is that something that you're going to be looking onto next? Or are you kind of focusing on a more fintech space to start with?

8:54Paulo Guichard:I think, look, ultimately, we built this product for scale and for enterprise. We ended up starting with fintech because that's really where our experience previously was. And I think we'll keep going within this vertical, large scale fintechs. But obviously, we have our eyes on financial institutions and large financial institutions, and they come in different shapes and sizes as well. And it's definitely a different sales motion. And so that's also something that is on our short term, mid term horizon on our side. I think ultimately there's an appetite within these institutions to actually onboard at scale and being able to compete with some of these fast-growing fintech companies.

9:39Paulo Guichard:But there's also a push to be more efficient on the operational side. And a lot of these institutions not only want to get access to better data, but also they don't want to be left behind on this new age of post-chat GPT moment. And so they also want to experiment with the newer technologies. So we're very bullish and very, very optimistic about what's coming. Amazing. And are there certain milestones in your mind or certain things that you want to achieve that are going to unlock the next round of funding? I'll say there's probably four different factors that come into play in terms of this.

10:17Paulo Guichard:We want to keep increasing the amount of sources of data that we're fetching information from. I think one of them is definitely to expand in terms of geography, but also in depth within the geographies where we are. The second one is really in terms of the agent library that we have. We want to keep improving in terms of accuracy, but also in terms of the different repetitive checks that we want to automate for these financial institutions. And then also in terms of the agentic workflows, being able to actually deliver on the promise to our customers that you can actually teach an experience that picks from different data sources with the actual agents and is completely aligned with your policy.

11:04Paulo Guichard:right and then there's a question as we expand beyond europe um to new geographies right and that's always something that is on the back of our mind uh that we haven't we haven't yet decided but a lot of there's a lot of push from our current clients to to go global yeah it makes total sense um yeah really interesting and i think it's an interesting case because you were you were stealth for two years i think right that's right can you talk can you talk a bit about what the rationale for staying in stealth for that long and for building in stealth from day one? Yeah, I think compliance is an interesting field, right?

11:39Paulo Guichard:Because it's a field that it's not enough to kind of get it right. You actually need to get it right. And it's one of those fields that there's no mercy for that, right? And that's also an advantage for us because if we get it right, We will be the ones to actually provide this solution to these financial institutions. So for us, it was very important to keep delivering this solution to being able to build this data infrastructure that actually could work at the enterprise level, but also at large scale. And also deliver on this agentic promise on top of that, that we could actually build better agents because we were actually owning the data infrastructure.

12:22Paulo Guichard:We had a proprietary data layer that was always in real time, right? And especially you have to think, look, KYB is going through a lot of changes. It's going from a static KYB mindset to a perpetual KYB mindset. And only if you have this real-time data infrastructure that works completely async, that you know for a specific company that you have, that there's a new owner, the right second that new owner pops up that you get a notification, then you can conduct a KYC check on top of that. That's the only way that you stay perpetually always aligned to your risk policies and to your risk appetite.

13:04Paulo Guichard:And that's something that I believe that you can only have if you have this infrastructure in place. And so that was very important for us. It was very important to deliver on the agentic layer on top of that. And last but not least, it was really important also for us to actually deliver the results to these clients. And so we also wanted to come out of stealth with the right results to actually show to the world, look, we've done it with this fintechs. This is exactly what's happening inside these operations team and these product teams and these risk and compliance functions. And we think that conduct can help the next use case, right?

13:40Paulo Guichard:And so that was very important. And I'll probably also give a shout out to my team because building in stealth sometimes it can be a long journey. But I think they were true euros and the success speaks for itself. And I think I would like to give them a thank you for that. Yeah, of course. I mean, it's, yeah, especially in that early stage, you want to be able to talk about it. And you want the public recognition as well, which no doubt you'll be getting a lot of now. um but yeah it makes a lot of sense because it's not one of those products when you can just like ship an mvp and iterate and iterate and you kind of have to get the bend and you you've got to go across the hurdle right you've got to make it work before you can really launch it and test it and get that feedback how did you find that during the stealth process you know did you did you find it hard to get product feedback given that you were building in stealth and given that you were building the product for so long for it to get ready or was that still okay i think look the fact that we were on the industry before gave us a lot of insights on how to build this.

14:44Paulo Guichard:However, you still need to get that feedback, right? Because it could be the case that the only fintechs that we worked on were the only ones that were so that were facing these problems, luckily not. So it was actually completely the opposite. We mean, our assumption was right from the beginning that there was a bigger problem here and a bigger elephant in the room around data reliability. And so we started speaking with companies. And I think also our credibility as former people, former operators and builders within these fields actually helped us a lot to speak to them. And it was very welcoming, the feedback.

15:22Paulo Guichard:So I think it was quite interesting. I think the building, the data infrastructure was right since the beginning. I remember a conversation with my co-founder when we were starting the company, and we were sure, look, after the chat GPT moment, we knew that LLMs were going to automate a lot of the work that goes on within risk and compliance functions. But we also kept wondering, look, without the right data in place, you simply can't get reliable outputs from these LLMs, right? So let's get first the data side right. let's build on top of that the right agents and then we can actually deliver on that promise of not only having the best best in class data but also we can actually automate a lot of the repetitive tasks and the overall goal is that these operations analysts can often focus more on strategic actions and strategic tasks rather than the dual manual processes that they were doing previously yeah and the value proposition is super clear um you know you mentioned your your previous experience you mentioned your co-founder's previous experience they're working at revolute uh square sum up truly some of the the europe's and the world's leading fintechs you know what did you learn from those experiences outside of the i guess the the technical or the uh domain expertise what kind of what kind of cultural things or behavioral things did you learned from working those amazing businesses that you're now trying to bring into your new business of your own yeah i think i'll say there's probably three main points there i'll say first of all uh having a very analytical mind everything being data driven and i think that's something that we've done at conduct from second office location to any kind of product decision right So it's always backed by numbers and we don't base our decisions on opinions, but rather on data points.

17:22Paulo Guichard:So that's the first thing. The second thing, and I think this, it sounds a little bit more fluffy, but probably not once or easier to understand, but probably not when you see it at scale within those companies. It's that relentless grit that people have of making something work and not giving up until it actually works. And that's actually it sounds stealth, right? So it's about getting stuff done and keep improving on that. And so that's really important. And I think it's a trait that comes from working on those places. And everyone can experience that, but you only truly understand it when you're within one of those companies.

18:03Paulo Guichard:And then last but not least, and that's something that you learn, is top talent matters. And that was something that at Contact, we always kept a very high bar for talent. We're very selective of the people that we bring on board, and we always want to work with the best. And probably here, a shameless plug, go to our careers page, and you'll be able to find a lot of opportunities within our team. But that's always something that we've experienced within those companies. we were surrounded by very smart people and ultimately the outcomes and the success of those companies was made by that depth of talent that was there so i'll say these three things were really the things that we not only saw experience but we also tried to bring to our experience now yeah great yeah it's really interesting and um you talked about those moments of you know getting things done making things work has there been a time in your journey over the last two years where you know something has clicked maybe the you know you've seen the results of your agents you've seen the results of your early clients or you've signed your first client and it was there a moment where you were like okay this is going to work this is going to happen like we're building something that is going to be impactful yeah i think i think as as a founder there's never that moment because you always are chasing the next milestone right i I think for me, what I would say is that the different spots of best moments that you have is really not when you sign the clients, but when they go live and they experience the results of the product.

19:41Paulo Guichard:That's really where you know that you're doing a good job at the end of the day. One of the things that I say within my team that you don't win a client by signing a contract. You win a client, actually, when you see the results after their implement and they're happy with those results and they can see the efficiencies, they can see the increases in conversion. You can see the risk and compliance folks actually being happier with the results that they have. That's really when you win clients. And I think those, for me, are the best moments is when we have those data points of validation along the product journey.

20:16Paulo Guichard:but as I say look it's always a relentless journey because you're always chasing the next milestone yeah absolutely well look thank you so much for joining it's an amazing result congratulations for you and the team it's a big round and best of luck taking your product and your business to the next level thank you Savi it was a pleasure thank you

20:46Thank you.