The fintech interview: Part 10 Meniga

It has been a couple of months since my last fintech interview. I am blaming a big story I was working on, which involved a lot of time in court, and then of course the festive period.

But hopefully this interview with Georg Ludviksson, CEO and co-founder at Meniga, which provides digital banking software to banks, will be a good place to restart the interview series.

It is a story of how a techie and personal finance nerd got gripped by business.

Formed in Rekjavik, Iceland, Meniga is a bit longer established than most fintechs I have so far interviewed for this blog, having been formed in 2009.

Meniga offers banks digital banking software and was one of the first companies to provide personal finance software. It started off with a personal finance tool but this evolved as a software company that offers the building blocks for a digital bank, including core digital banking services with a strong personal finance angle.

“The key theme is helping the banks evolve from a place you transact such as checking a balance, move money and pay bills into an application which is more like a financial coach,” said Ludvikson. “You can still transact but it is telling you something insightful about your finances.”

Meniga sells to banks who integrate its software, which can be in the cloud or hosted on premise. “Many of the banks we worked with were reluctant to have the software in the cloud but this is now changing and many of our projects now are cloud based.”

Its customers include Spanish bank Santander, Germany’s Commerzbank,  and ING in the Netherlands. But most of the company’s customers are not traditional banks and it includes companies in retail and other sectors as the boundaries of financial services blur.

Meniga is currently looking to expand in the UK and its first UK customer could be announced soon.

Ludvikson was originally a software engineer and Meniga was not his first startup. He was involved with an enterprise mobility company and he later worked on a fintech in Boston which helped people invest money.

But his role now is much different. “At my early startups I was a key technical person but I developed an passion for business plans and realised that sales and marketing probably matters more than the technology,” said Ludvikson.

This changed his plans somewhat. He was planning on doing a Phd in machine learning and artificial intelligence but switched to an MBA at Harvard Business School.

While in Boston a new generation of personal finance tools such as Mint.com began to emerge. “This was something that really spoke to me as an enthusiast and these tools were similar to some of the thoughts I’d had around helping people to better understand and manage their money.”

“I was always looking into startups and at the time I would say I was a personal finance nerd and enjoyed using tools and applications for personal finance management.”

He also began helping friends and family when it came to managing their finances. “When you set up a startup it is hard and for it to be successful you have to be passionate about what you are doing so I was exploring ideas in this space.”

When Ludvikson moved back to Europe he planned to set up a European company with this very focus. Then the financial crisis struck in 2008, which hit Iceland particularly hard.

“I had a job lined up at a hedge fund but that did not happen due to the crisis. This was not particularly the best time to switch careers into financial services,” he said.

But this did not deter Ludvikson and he got involved in entrepreneurship again and began work on Meniga.

And the financial services crash of 2007 was actually good for the startup. Most of the early talent, especially the first co-founder, came from existing banks. “When the banks collapsed we got a lot of their talent.”

The first business plan was completed in October 2008 and Ludvikson started working full time on it in March 2009. He recruited a CTO, who became a technical co-founder, while Ludvikson handled the product development,  business and sales the CTO handled the technology development.

“In the Spring of 2009 we started building the original solution,” said Ludvikson. It wasn’t long after that the company had its first bank customer.

“Once we had some initial success and been live with the bank for a few months we received €700,000 seed funding in April 2010 which we used to pay ourselves salaries.”

The company then expanded in Iceland and signed up two of the other major banks before expanding outside Iceland. “We decided everything would be international and used English as the corporate language. Iceland is a good place to start but it you want to grow you have to move overseas.”

The company set up a sales operation in Stockholm, Sweden, where Ludvikson relocated.

It then sold the product to some medium sized banks in Scan

This was one of the re-capitalised Iclandic banks, Íslandsbanki,  which bought a comprehensive personal management platform from Meniga. This platform could be integrated with the digital banks of customers. This helped customers manage their money and offered functionality including peer comparison which allowed customers to compare their spending to others.

“This was tightly linked to the digital bank. It was a separate application but customers could sign up through the digital bank,” said Ludvikson.

Banks pay for the software through a licence which is linked to the number of users.

It started the contract with Islandsbanki in September 2009 and went live in January 2010. “About 25% of its active digital users signed up in the first three months and it climbed to about half of its users.”

“We bootstrapped for the first year but we used revenue from this first contract to hire more staff and then got a third co-founder,” added Ludvikson.

“Once we had some initial success and been live with the bank for a few months we received €700,000 seed funding in April 2010 which we used to pay ourselves salaries.”

The company then expanded in Iceland and signed up two of the other major banks before expanding outside Iceland. “We decided everything would be international and used English as the corporate language. Iceland is a good place to start but it you want to grow you have to move overseas.”

danavia. “This region was the next stepping stone after Iceland,” said Ludvikson. At this time the company had about five staff in Sweden and 15 in Iceland.

But once the new customers were signed it grew. “In 2012 we went live with new customers in Finland and Sweden and increased the workforce to about 25.” The new staff were mainly software developers and product designers.

In 2012 the company signed seven banks as customers including banks in Germany, Poland and Spain.

In 2013 it grew to about 85 people after receiving more funding worth €6m. It then relocated its headquarters. “In 2013 we decided London was a much better place for the salesteam than Stockholm,” said Ludvikson. Access to sales talent, transport links and a large domestic market were major drivers.

Although it has customers in nearly every European country it does not yet have any UK bank customers. But Ludvikson said the company is hoping to announce one soon although he added that “this is not yet a done deal.”

Meniga now has 130 employees in four location with two thirds are in Iceland where most research and development is done. London is the sales office and headquarters and Stockholm as a research and development office. Its latest office is in Warsaw where 15 people currently work.

Read the previous fintech interviews

Part 9 TrueLayer, Part 8 InvestCloudPart 7 ClauseMatchPart 6 Rebuilding Society, Part 5 HonchoPart 4 AkoniPart 3 WriskPart 2 CreditLadderPart 1 Taina Technology

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