Nigel Verdon is the cofounder and CEO of Railsbank which is an open banking API and platform that gives regulated and un-regulated companies access to global banking. The company has raised over $14 million from top tier investors like Kima, Moneta VC, and Visa to name a few.
In this episode you will learn:
- Operating in regulated industries
- How much they’ve raised at RailsBank
- Models that scale
- His top advice to his younger self
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Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Nigel Verdon:
Nigel Verdon is Co- Founder and CEO of Railsbank, a global banking and compliance platform that gives companies access to global wholesale banking services in 5 lines of code.
Nigel Verdon is an entrepreneur and tech evangelist. Previously Nigel Verdon worked at Swiss Bank Corp (now UBS) and was a director at Dresden Kleinwort Investment Bank – both sighted for their digital innovation.
Nigel Verdon is Chairman/Founder of one of the world’s best known FinTech brands, Currency Cloud, founder of the award winning Evolution Consulting Group plc. (exited to FTSE 100 company), an investor in FinTech specialist Anthemis and a board member of FX options hedge fund LCJ.
Connect with Nigel Verdon:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today, we have a serial entrepreneur that is going to be joining us, and it’s quite exciting. Also, he’s very well-versed in Europe, but he’s been all over the world. So, without further ado, let’s welcome our guest today, Nigel Verdon. Welcome to the show.
Nigel Verdon: Thank you. Thank you for the invitation and also that warm welcome. That’s very kind of you.
Alejandro: Nigel, originally born in Germany, but you don’t have a Dutch accent, and obviously, that comes from Irish parents that were traveling all over the world. So, how was that?
Nigel Verdon: Yes, that’s true. My mother and father both are from Dublin. Unfortunately, they had to leave to get married because, in those days, they wouldn’t marry a Catholic and a Protestant. My mother is Protestant. So, they left, and my father ended up in the British military, so I was brought up all over the world: Hong Kong, Germany, UK, and the United States, as well, and I claimed Virginia. So, it was a super interesting upbringing and eye-opening in all sorts of places like Malaysia, Nepal, Hong Kong, lower S.E. Asia. It was a fascinating upbringing. I think that helped develop a global mindset from childhood. Not intending to do it, but just my circumstance.
Alejandro: Absolutely. In many instances, I interview a lot of entrepreneurs that they are in one single place where they were born and raised. Then, all of a sudden, they travel overseas, and it’s like their mind opens up with a different perspective, and that perhaps influences them into maybe starting a company. So, how do you think this influenced the entrepreneur you are today?
Nigel Verdon: I think the influence was on that countries may look similar are totally different in their psyche, and language, and everything else. So, don’t make assumptions about somebody because they are massively diverse. The other thing I observed is that different cultures have different ways of thinking, and bringing that together into a company, like we have at RailsBank, creates very different global and well-thought-through outcomes. You can localize your thinking and product and still have a global capability, and that’s super interesting – talking and meeting many entrepreneurs coming over to Singapore where I live, and RailsBank has an office there. I’ve seen some U.S. West Coast companies. The first time outside, as you said – outside California, figuring out the differences between Indonesia, Malaysia, Vietnam, Singapore, Philippines, and everything else, and being brought up and experiencing that is actually quite easy when we set up. Appreciating those different cultures is fundamentally different in religion, outlook, and life, philosophy of life, Confucianists to Taoists to different philosophical cultures has helped grow our business and also client base, which is a most important thing is how to work with clients and respect and understand and deliver to the local and still maintain being a global company.
Alejandro: Talking about influences, too, you had the entrepreneurial bug also in the family. Your great grandfather founded a pretty big bank. Is that right?
Nigel Verdon: It was my great-great-grandfather. It was in the 1850s or so. He was one of the founding fathers of what’s today called ANZ Bank. It’s called the Melbourne and Victoria Bank. In the head office of ANZ, they still maintain his apartments in the Gothic building. His apartments are still maintained. I’ve talked to the CEO. He hasn’t applied, unfortunately. Perhaps he will. [Laughter]
Alejandro: Got it. So, you end up being in the UK studying, but you had your first experience with failure and learning from mistakes, so what happened there with the exams?
Nigel Verdon: Yeah. When I left school, it was the UK finals from high school. I didn’t get my grades, and so I wasn’t going to go to University and ended up as a professional sailor on one of your tour ships. It was actually the first ship of the U.S. Navy, Providence, whose captain was John Paul Jones. That was fascinating. I loved my time working there between Maine and South Carolina, sailing, training, taking kids out to reenactments, the Boston Tea Party, and everything. My father didn’t go to University, and he persuaded me by saying, “This is the last time I’m going to ever pay for you. I’m going to pay for the education for you to go and retake your exams.” He was very persuasive as in, he just said, “Please” on that. We took my exams and got to Warwick University. There’s actually a story with RailsBank, too. My co-founder and I went to school together. When I ended up University a year after leaving school – I had taken that time off because I didn’t think I was going to go to University – he turned up. He had just been in the Royal Navy for a while, and he was still serving. I had a beard and long hair at the time, and the only thing he recognized was my voice. Today, he’s still the co-founder of RailsBank.
Alejandro: That’s amazing. In terms of your studying there, why engineering?
Nigel Verdon: I loved engineering. It was more the physical side of it because during my school holidays, I worked in a garage fixing Van Rovers – jeeps, as they call them in the states. I really enjoyed it. I even ended up fixing tanks for two weeks. I saw engineering was like that, and it ended up that engineering is a lot of math and theoretical stuff. I’ve always had a fascination with how things are built and how they work and how things are put together and how you take raw goods, and you get ice cream coming out of the end. Things like that fascinate me.
Alejandro: After you went to University, you did a couple of stints before you ended up going at it and taking that leap of faith with your first company. Here you were in EDS, Nomura, Swiss Bank. On this last one, you learned how tech transformed businesses. What did that look like at the time?
Nigel Verdon: Yeah. Swiss Bank today is called EDS, which was a massive set of highly intelligent people after the acquisition of Körner, which is a trading business. They used tech to transform the trading. In today’s terminology, it was trading experience, as you might say. That’s today’s terminology. Before, I used to do video feeds as opposed to digital feeds and the timeless information. The thing, Swiss Bank leadership, at the time, was super smart. They found this thing called NeXT Computers and NeXTSTEP, which is now called MAC OS. They were developing software tools, mismanagement models using the NeXT Dos and the NeXTSTEP [10:03]. That pretty much was defining whatever it does today. We were the biggest client of them. It’s just seeing how traders and tech guys, everybody sat together and figured stuff out and was putting new products out there and getting new models, and taking different views at risk, superfast. That was a gamechanger. We didn’t realize what was going on at the time, but in reflection, it was a massive, massive change. We thought that was the normal thing to do it. I talked to some buddies of mine in the Navy and others, and they said, “No, it’s not like that here.” Even to build one, they said, “It’s not like they’re here either.” Then we two buddies and a University friend setting up their business – we founded Evolution, our first company, like a miniature Accenture.
Alejandro: And, obviously, bootstrapped and completely different than the next companies that you would do, which it’s tricky because it’s like one step in the wrong direction is lethal. So, why did you think about doing the bootstrapping approach here, and what was that like?
Nigel Verdon: It’s sheer ignorance, to be honest, because we had no idea what venture capital was in those days, or at least, we didn’t. We thought that’s how you built a business, so we went and did that. The learning of that is the difference between a venture banks and a non-venture banks, which we learned a number of years later. Also, one of the things I think Evolution set the path, and it’s affected RailsBank. We built a business based on core values, as well, within the team. You’ll find within RailsBank, our CTO, Pete, was part of that original company who was a project manager at the time. Our chief architect was a CTO of that company and was CTO of Coventry Cloud. My co-founder was head of Biz Dev. Our chief data architect was an MSc [12:26] project student, who sat next to us on the trading floor doing crypto stuff for us. In those days, we were trying to do the connectivity between [12:37] internet, so we had to figure out how to get SSL working. That’s what his job was. It was all stuff that comes standard these days. That’s what set the tone for what RailsBank is today.
Alejandro: I want to touch base on one event here that I’m sure that really shaped your views on leadership and perhaps culture. You had quite an experience that at the time was unfortunately, which was, obviously, the dotcom bust and how that affected your operations and a layoff that you had to. So what happened there?
Nigel Verdon: Basically, we learned the hard way, which is when you’re in a market that’s just been devastated, and you’ve got to make decisions fast and with dignity. Unfortunately, that means we had to fire half the company in an afternoon once the decision was made. The learning of that was from a very good mentor, Mike Malinski, who was a partner at PwC. He said, “You’ve got to do this. Make sure it’s with dignity; it’s done fairly; it’s done by the book. Don’t try and make excuses. Don’t say sorry. Just make sure that you explain the situation, and people will support you.” That was great coaching on that. We did the deed, and then we all went out afterward and had an amazing night on the company. So it was paid for the last night. It was a real learning thing. It shaped our decisions on how we handled COVID, and also, when I founded Currency Cloud back in the U.S. in 2008, was how you go through the credit crunch, as well. It was good training in some ways. One of those people is Nick Borner, and he’s now our chief architect at RailsBank.
Alejandro: That’s amazing. Everything comes around, and in this case, the outcome came around in a nice way because it was acquired.
Nigel Verdon: Yes, it was. It was acquired and two acquisitions after that, it became a part of VA – a very, very small part of VA systems.
Alejandro: Right. Very cool. After this, you went into Dresdner, with the idea of turning around the company, and this was a nice segue into Currency Cloud, which would be your next business. Tell us about this.
Nigel Verdon: Dresdner, I brought in by the former head of equities at Swiss Bank to help them turn around the business, and it was actually a lot of ex-Swiss Bank people too. It turned up I was getting emails saying, “Nigel, why are you here? Why are you here? We thought we got rid of you.” And that type of thing. Al Karachi, a previous CIO there, at Swiss Bank, as well. He then became CEO of BT. He’s now Chief Digital Officer at Prudential. And there are a ton of others on the trading side. Our trading team was there as well. They were inspiring people that I met there. After the term equity’s business round, that was – I won’t say an easy thing, but it wasn’t [16:16]. It’s got Sean Park. Sean found an amazing investment fund, and he’s also one of the angel guys at the time, too. He invested in [16:28], which was a million-dollar exit. He put the money from Dresdner into market, which was a four or five-billion-dollar company now. Anthemis was his vision of financial services. When we both left, he founded Anthemis, and Anthemis invested in [16:51] Simple, into Betterment, to Currency Cloud, a ton of well-known names. I founded Currency Cloud at the time. It was actually RabbitFX because it started off as a small brokerage. It was a combination of timing and people that this FinTech movement started emerging at the end of 2010, 2011, at the response to the distrust within the banking sector. Transferwise came out of it and introduced by Michael Jackson, who I’m seeing for lunch tomorrow, who was a COO of Skype. He said, “There are a couple of guys who want foreign exchange business. You know foreign exchange, Nigel. Can you help them?” [Kristin Tarvet] came and showed me [17:52] because it wasn’t in business at the time. We figured out how we could help them get their foreign exchange working. One of the things I learned quickly off them was that these guys are going to build a massive business because they knew about consumers from the Skype experience that [Tarvet 18:11] had. That was also the time when Nick Bowman and I were thinking through, “Should we be a direct consumer? Should we be direct to SME, or should we be an actual platform?” because we were just getting to understand what platforms were. It was inspired in Bulgaria at a [18:37] conference, which was the first venture fund that was in Bulgaria at the time. [18:45] A friend of mine was doing a talk on telco platforms. Then the penny dropped. The telco industry, five years beforehand, had gone through this platformification. I texted them because I didn’t have a smartphone in those days – Nick Borner, and said, “Can you register the domain name, currencycloud. He said, “It’s not available. How about thecurrencycloud?” I said, “We’ve got to change it to be a platform business.” And that’s what we did in late 2010, 2011. The first clients there were [19:31]. That proved the concept of an API-led business, and the business model was there, and that’s what we carried on raising capital for in the Series A [19:43] well-known venture investor.
Alejandro: How much capital did you guys raise for Currency Cloud?
Nigel Verdon: It was 70+ million. It was an awful lot of money that we raised – gone into it. It’s a good business. It’s respected. Google has invested in it. Visa has invested in it. It has global offices, and everyone is there. I think you met Dov.
Alejandro: Absolutely. I meet as possible. So, a shoutout to Dov Marmor if he’s listening. Nigel, let me ask you this. Currency Cloud took a life of its own. I don’t know how many employees, probably in the hundreds now, and as you were saying, a ton of money that it has raised. So why did you decide to leave?
Nigel Verdon: In 2012, when we closed Series A, I hired a chief executive to run the company because I was living between the UK and France, and I didn’t want to be fulltime in the UK, so I would primarily be there to see the kids growing up in France. That was one of the main businesses; we discussed it with Sean Park, who was on the board, and Fred, who has joined the board and was leading Series A. We agreed that I would be executive chairman, and we would search for and hire a chief executive to run the business. From 2012 to 2015-2016, Mike took control of the business, which was good news and a good management team coming in. They really grew the business. There came a place where my job had essentially been done. I was always thinking through, “What would I have liked in that conversation with [21:49 – 21:59], saying, “What would you have liked if you could have started again? They all said, “Imagine if we had banking infrastructure, so we didn’t have to integrate five or six vendors; we didn’t have to do this; we should have had one API and got live and didn’t waste 9 to 12 months and 2 million bucks before we could even take a customer on and something to accelerate that.” That was the genesis of RailsBank. We went out and started to build that.
Alejandro: This was in 2016.
Nigel Verdon: Yes.
Alejandro: Here it is your third business. What were the top three things that you knew that you had to tackle and that you were going to get right based on your experience with Currency and also with your previous company, Evolution? You knew, based on experience, that there were going to be three things, at least, that you were going to tackle. What were those three things?
Nigel Verdon: The first thing is value proposition. Sort out the value proposition because it doesn’t matter how good your tech is if people don’t buy your value prop. You’ve got a better mousetrap unless your better mousetrap is unbelievably better. When we spent six to nine months with a PowerPoint deck, just testing value props with 60 to 70 different people and then honing them down to what resonates with what do people want to buy and what helps them and solves their real pain points? We wanted to test. We think this is a great idea, and we’ve got a few people that have been told on that. One of the other learnings from that is, I call it the grandmother test: never ask a friend of yours or your grandmother a new business idea because they’ll always tell you it’s fantastic. We made sure we talked to people who were difficult, people who were opinionated, people who didn’t know us to see if we can find that value proposition. That’s the first thing, which is a value proposition. Number two is, you’ve got to have a team of people who are robust, who can work through things, can allow each other to get angry at times because you’re just passionate about stuff, and build it, so it builds a culture of pace and a culture of operating at pace, a culture of fix-it, a culture of getting things done but not over-engineering and not over-thinking. That’s how we started up RailsBank. Co-founder Clive Mitchell was a nuclear weapons officer in the Royal Navy in the submarines, and they have that same culture. If you’re working in a submarine and something goes wrong, you just get it done, and you sort out what bank you owe afterward. That was the second thing. Our head of people joined us super early, and she was an ex-professional rugby player and had 35 taps for the England rugby team because she’s at the standards as well of people. Not normally an HR person, but she is phenomenal at leadership and getting the right people. The next thing was you need customers as well as also product. Customers define everything, and we built product prototype and then product in conjunction with customers. The key thing on that was, make sure we didn’t build anything customized or bespoke. We took inspiration from [25:56] at Salesforce. It was a total, single platform for everybody, and that’s how you get these SaaS economics and SaaS scaling of it. That was the other learning one: don’t try to do everything or anything bespoken and learn the difference from a product perspective. I love product at Currency Cloud as opposed to software, which is different from product. It’s learning how to – everything that people give you is not a requirement. It’s an insight, and if you have an insight, and you correlate lots of insights into something, they become a requirement, and that goes into the product. An insight may be articulated in ten different ways, but it means like, “We’d like that in green.” That was a big learning of using the word insight rather than requirements because if you said the word requirement, you mentally think that you must have it. An insight is, “That’s a useful piece of information. Let’s [27:04] and let’s see what other insights it correlates with.”
Alejandro: For RailsBank, Nigel, how much capital have you guys raised to date?
Nigel Verdon: We’ve raised just over 12 million to date, and there will be some more news flow on that very soon, as well.
Alejandro: Very cool. Let’s say today you go to sleep, Nigel, and you wake up five years later in a world where the vision of RailsBank is fully realized. What does that look like?
Nigel Verdon: President Trump has left. That’s the first thing. [Laughter]. That’s probably petting the bear there. Liking the world data centers, and [27:55], as you speak of. There’s AWS now. There’s Google Cloud. There’s PingCloud, there’s Alibaba Cloud, and there’s Microsoft’s Cloud. We see the same vision for financial services. There will be a number of platforms that people will operate on top of, and we will be one of those platforms.
Alejandro: Very cool. One of the questions that I typically ask the guests that come on the show is if you had the opportunity to go back in time and maybe have a chat with that younger Nigel that is still working at what is now EDS thinking about launching a business, based on what you know now – it’s been an incredible ride for you, Nigel, the ups, the downs, the learnings, the successes – if you were able to chat with that younger Nigel and give that younger Nigel one piece, only one piece, of business advice based on what you know now about building a business, what would that be and why?
Nigel Verdon: I’d actually probably go back to the time I told my father I was going to be a professional musician because I played guitar all my life. That’s the reason I messed up my exams – one of the reasons – rugby and playing the guitar. I would have said to him, “Follow your belief and become a musician.” That’s what I would have said. Some friends of mine did do that, and now they are with the Philharmonic or ballet, play saxophone all over the world, as well.
Alejandro: That’s amazing. Nigel, for the folks that are listening, what is the best way for them to reach out and say hi?
Nigel Verdon: Reach out on LinkedIn. I’m the only Nigel Verdon on LinkedIn unless somebody is spoofing me on there. Please also goes to www.RailsBank.com or on Twitter @nigelverdon or @railsbank. I would be delighted to chat and thank you.
Alejandro: Amazing. Thank you for being on the DealMakers show today, Nigel.
Nigel Verdon: Thank you, Alejandro, for the invitation and the opportunity to speak. It’s been a real pleasant experience. Thank you.
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