All about card issuance and the CFO’s cockpit 🤔

#171 - Laura Pallier (co-founder of Regate) and #172 - Denise Johansson (co-CEO and co-founder of Enfuce)

Jul 30, 2023

I promised you technical topics this summer. Last week, I covered “Asset Backed Lending” with Raphaël Maarek from Viola Credit. This week, I'm taking you on a journey to discover a payment-related topic and the “CFO stack”.

On the 🇫🇷 episode, I sit down with the co-founder of Regate, Laura Pallier. We talk about the “CFO stack”, which we’ve already covered last year with Seema Amble, Partner at a16z (here). However, this time, we approach it purely from a 100% operational point of view.
On the channel 🇬🇧, we hear from the co-CEO and co-founder of Enfuce, Denise Johansson. During this episode, we discuss various issues surrounding card issuance.

The “all-in-one” of Finance Departments. (Episode in 🇫🇷)

Laura addresses the challenges encountered by finance departments due to the proliferation of ComptaTech solutions developed for various use cases, including reconciliation, expense management, cash management, invoice processing, and integration with accounting software. The start-up aims to become the CFO's cockpit and tackle all these complexities with a frictionless single tool unified and comprehensive tool.

We revisit the launch of Regate and how its solutions were rapidly deployed to cater to both accountants and CFOs. The discussion also covers its distribution channels and “Go-To-Market” strategy, as well as its investors, with Valar Ventures returning in the last financing round and how the founders faced quite a grilling. The conversation concludes with insights into Regate’s internationalisation in Spain and its future prospects, particularly around the financing aspect.

The “CFO stack”

The “CFO Stack” refers to all the tools and software (including SaaS) used by a finance department to manage a company's finances. This includes systems for accounting, cash management, budgeting, planning, financial analysis, expense management, etc.

I've covered a number of them over the past three years:

Accounting Systems: This is the reference tool used to track business transactions. Examples of such software include QuickBooks, Xero, or Sage.
Cash Management: These tools help manage and optimise business cash flow, track cash, forecast future cash flows and make informed decisions about cash management. Examples of such tools are Kyriba, Agicap and more).
Planning and Budgeting: These tools assist CFOs with planning and budgeting, including financial planning and analysis. Some references for these tools include Oracle Hyperion, Vena and Anaplan.
Financial Analysis: These analysis tools, like Looker and PowerBI, include financial ratio analysis, cost analysis, profit analysis.
Expense Management: These tools help track and manage business expenses, including travel expenses, business expenses, expense reports. You can revisit some episodes featuring Mooncard orSpendesk for more insights.

Added to these are customer relationship management systems such as Salesforce, salary management tools, BI (“Business Intelligence”) tools, contract management platforms, audit and compliance software, invoicing and payment platforms like Stripe, Square, or PayPal, sales management platforms, risk management tools, etc.

These tools vary according to the size and the sector of the company, as well as the specific needs of the financial departments. They can be used individually, or they can be integrated into an ERP (“Enterprise Resource Planning”).

Regate

Founded in 2019 by Laura and Alexis Renard, the start-up Regate positioned itself very early in its development as a cockpit for the Finance Departments of SMEs.

Separate offers for SMEs and Accountants,
Integrated with the main accounting software such as Cegid or Sage,
10,000 customers (including a few use cases here),
EUR 27 million raised from Valar Ventures, but also: Financière Saint James, AG2R La Mondiale, 360 Capital (last round of Series A financing in 2022).

The functionalities deployed cover the management of supplier and customer invoices, expense reports, bank reconciliation, a bank card offering, budgeting, financial reporting, and cash management.

Valar Ventures

Valar Ventures is a VC fund based in New York, co-founded by Peter Thiel (for the record: one of the co-founders of PayPal and one of the very first investors in Facebook). The fund, created in 2010, focuses on seed and growth start-ups located outside of Silicon Valley, particularly outside the US. Valar is recognised for its ability to identify talented entrepreneurs in geographies often overlooked by other US VC funds. Valar has thus invested in many renowned start-ups in FinTech, such as Wise, Xero, N26 or Qonto.

Streamlining card issuance.

Denise shares today her immense knowledge and expertise in a very specific field: card issuance.

We begin with a brief overview of the card payments transaction value chain, covering the key players involved, from the cardholder to the issuer, and the role played by payment systems both at the European Union and the global scale.

Denise discusses the challenges faced by card issuers, and Enfuce addresses them by providing solutions that streamline the issuance process. You will learn that Enfuce covers the security, compliance, and risk management aspects to meet a certain number of regulatory constraints. We talk about SLAs, where continuous availability is required and about pricing, where transparency is at the center of their concerns.

Lastly, the episode provides insights into the robust infrastructure established to ensure seamless and reliable payment processing.

We take a close look at a real-life use case between Enfuce <> Pleo, showcasing how Enfuce tailored its services to meet the specific needs of the start-up, leading to an enhanced user experience.

👉 Bonus: This co-CEO, who has known her co-founder since 2007, describes what a co-CEO organisation can bring and how effective it can be.

Value chain

Source: Enfuce

The process of issuing payment cards and executing transactions involves several parties, each playing a very specific role:

The cardholder: This refers to the customer who uses their card to make a payment. 👉 The cardholder initiates the request to the issuer.
The point of sale: This is the place where the customer makes payment for the purchase of goods or services. 👉 The card reader utilises the card information to send a payment transaction to the acquirer.
The merchant: This is the company that sells goods or services against payment. 👉 The merchant has an agreement with a bank or financial institution (the acquirer) to accept card transactions.
The acquirer: This is the bank or financial institution that processes and settles the merchant's card transactions on a daily basis. 👉 The acquirer has an agreement with a card network (like Visa or Mastercard) to accept their cards. Some acquirers may use a card acquiring system provider to manage this process.
The card network: This is the processor of worldwide card payment transactions and is typically represented by Visa or Mastercard. 👉 These networks establish partnerships with issuers to issue their payment cards and with acquirers to accept these cards during transactions.
The issuer 👉This is the financial institution that issues the payment cards. [NB: The issuer needs a banking license or payment institution license to operate and must also have the technical capacity for issuing cards and processing payments].

Note that this is a very simplified value chain and the process may vary or include other intermediaries depending on local regulations, the type of transaction (e.g., online transactions may involve payment gateways), etc.

Enfuce

This Finland-based FinTech was founded in 2016 by Denise and her co-founder Monika Liikamaa.

Authorised by the Finnish Financial Supervisory Authority as an Electronic Money Institution.
Renowned clients like Pleo, Memo Bank, Starcart, Qred.
Integrations with Core Banking Systems (Mambu, Skaleet or Saascada), banking infrastructure (Bud, Currencycloud), compliance solutions (Fourthline).

For insights into the Pleo case, you can access it 👉here

My Carbon Action

In collaboration with D-mat and Compensate, Enfuce is also able to provide a solution for the calculation and compensation of the carbon footprint.

For a deeper understanding of this initiative, you can find more information 👉here.

🥳 Weekly recommendations:

The guests:

A french podcast “Les couilles sur la table” by Victoire Tuaillon
“Start with why” by Simon Sinek

😁 and….

The Modern CFO Tech Stack for 2023 (Blog Pigment) 👉 Read
The CFO in Crisis Mode: Modern Times Call for New Tools (Blog a16z) 👉 Read
Finscale #68 - Emilie Casteran (YouTransactor) - Mobile Point of Sale: High potential Market 👉 Listen in 🇫🇷
Is It Time to Consider Co-CEOs? (HBR) 👉 Read
Applied AI: Six growth considerations for private markets (McKinsey) 👉 Read