Five years ago, a group of co-founders with experience in the financial sector sought to build a simple, effective product to help institutions deal with fraud.
There are millions of bank accounts spread across countless financial institutions, and at the time the vast majority of those institutions were working with internal tools to combat fraud and disputes.
“We saw an opportunity in the market to build a standard solution so they didn’t all have to start from scratch,” explained Joseph McLean, a former bank manager. “There are only so many ways to solve this problem. Let’s solve it once and for all.”
So McLean and other co-founders Daniel Penn, Richard Jefferson and David Chmielewski began to build Quavo in 2016, and at the time neither they nor their clients were interested in the cloud. Their first client – a credit union in Mountain View, California – had their product installed on site.
And the Quavo team wasn’t super interested in SaaS either — they wanted to be a recurring revenue product, Penne said. It took them a while to consider themselves a product company, he added.
“Back then, institutions didn’t just like the cloud, they refused to do it,” Penne told Technical.ly. “Everyone was against having their data not on their own server.”
But as they added customers and expanded the company, the fintech landscape changed. They “piggybacked” by other cloud services for a little while, and in December 2020 they sold fraud and dispute software for the first time built on Galileo. And they never looked back.
As soon as they moved one client to the cloud-based SaaS product, others followed in quick succession. It was almost like they were holding their breath waiting for someone to take the first step, the founders said.
“Obviously the market is changing and people were more open, but when we said, ‘we have one person on SaaS,’ we got very little push back ever,” Penne said. “It was almost like a chicken wringer, nobody was alive on it or wanted to touch it, and then one person did and we said, ‘this is how we’re going to offer this from now on’.”
McLean said the switch has brought many benefits to the company. They’ve since worked on what they call IT registration, hearing suggestions for things that worked for clients or wish lists that engineers then apply to the product across all clients. They have also been able to offer implementations at no cost, McLean said. Instead of spending three years and millions to get a feature to go live, the company can get features live in a matter of months.
“That’s because it’s SaaS, and we operate with those standards and best practices,” McLean said. “It’s been a game changer for us.”
The company has some Philly and Wilmington roots — McLean, the CEO, is in Delaware and Penne, the CFO, is a Philly native who recently moved to Florida. But the pandemic has made them further embrace a distributed team and workflow. COO Chmielewski works from Michigan where they set up an office to help recruit University of Michigan graduates, and Jefferson, EVP, works from New Hampshire. The company has about seven employees based in Philly and Delaware, but the team of 83 is spread across 13 states, the co-founders said.
And a $6 million Series A that the company closed last October will go toward the “support structure” around their SaaS product.
“Our product is generally solid,” Penne said. “But now we’re looking at marketing it, scaling support. Who’s going to sell it? For so long we’ve been focused on getting it viable and out there, and now it’s time we have this great product to sell.”
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