Zuben Mathews has seen his fintech startup experience hyper-growth over the past few years. Including saving its users a quarter of a billion dollars in just 24 months.
On the Dealmakers Show, Zuben shared his process, how he has both bootstrapped and funded startups with VC money, and his experience selling a business in a crisis. Plus, how to recruit cofounders, and how his latest venture is disrupting the banking industry in favor of those that need it most.
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Education, Opportunity & Entrepreneurial Spirit
Zuben Mathews was born in Delhi, India. His family, some of whom had obtained their college degrees overseas, were very supportive of his studies. They saw education as a platform to overall success in life.
From a young age, they instilled in him the desire to continue his studies in ‘the land of opportunity. To experience the American Dream. Where you could achieve success with hard work, and perhaps find education with more practical applications.
Mathews was awarded a scholarship to the University of Chicago. Where he experienced living by himself for the first time, and the reality of the brutal cold in the northern United States.
Before entering the world of corporate work, Zuben took some time off to pursue an entrepreneurial idea. METROINDIA was like an early version of TimeOut online, long before social networks existed online like they do today. At just 19 years old he created this online tool for finding all of the great places to go, and to find out what was happening.
It was a fully bootstrapped venture. In fact, he says that they were able to bring in advertisers to fund the company before they had even launched it.
Just two years into it, and they were in talks to have the company acquired by a media company based in the UK. Then the dot com bust happened. They still ended up being able to sell the business. Though he calls the outcome more of an acquihire event.
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Banking Is Broken
After the acquisition, Zuben went back to complete his studies. He came out of that to go to work in investment banking for Deutsche Bank.
This gave him the opportunity to see investment and M&A from the other side of the table. A unique perspective that most entrepreneurs don’t have. It certainly helped him understand what investors want to invest in, and no doubt fueled better decisions when it came to structuring his latest venture.
The board there even gave him the power to build his own intrapreneurial investment banking group under their umbrella. A great way to test run your abilities and ideas, without all of the risk of going it alone.
Though Zuben says he probably took too long to decide he had all the experience he needed to take the leap into another startup.
Still, his experiences from coming to the US for college and starting to work in a corporate career continued to nag at him on the inside.
The US may be one of the largest economies and richest countries in the world. Yet, he says that despite this, the average American still endures an enormous amount of stress and anxiety around their finances. That still bothers him, and he is adamant that is not right. He says that it “should be upsetting for everybody living in this country.”
Zuben said that even with his college tuition fully covered by a scholarship, and doing all the right things moneywise, he always came up short.
Getting money transfers from family was incredibly unpredictable, and the fees could be too. He had a job too, but money always took too long to come in. It was a perpetual, negative and expensive cycle of overdrafts, despite not overspending. The stress around that consumed his life, rather than being able to focus on other things.
That cycle impacted his studies and work and meant being forced into thousands of dollars in predatory fees. All of those nasty late fees and overdraft fees.
Consider that Bank of America, Wells Fargo, and Chase each make $2B each year in overdraft fees. That’s almost exclusively made on the hardest hit customers who can least afford it. While the wealthy get sweetheart banking deals on fees.
It is banks exploiting those living paycheck to paycheck. The average American. Who has less than $400 in savings, and who only make an average of $45,000 a year.
Then there are ATM fees, monthly service fees, and more. All of those junk fees go to pay those huge bonuses of these already wealthy bank CEOs.
Empowering Individuals With Fairer Banking Options
These frustrations became the foundation for Zuben’s latest venture, Brigit.
Together with his cofounder, Hamel Kothari, they built a new banking solution with new technology from the ground up. Their simple subscription app has already saved three million users move closer to financial security.
He says Brigit “helps people budget more effectively, borrow money between paychecks so they don’t have to spend money in overdrafts, build their credit scores and actually get to a point where they can earn more as well.” 91% of their users also report feeling less stressed as a result.
Below is a timeline of events from the inception of the company to date.
Obviously building a new fintech company from the ground up, which is designed to endure as a business, and actually help people takes a lot of capital to create.
This time around Zuben was able to raise substantial funding. Totaling around $140M, between debt and equity financing.
He credits this with great research, a compelling problem, and a strong team.
Storytelling is everything which is something that Zuben was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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Listen in to the full podcast episode to find out more, including:
- How to recruit your cofounder
- How to get a blank, uncapped term sheet when fundraising
- Reinventing how credit is extended
- Zuben Mathews’ top advice before launching a business