At the IFGS 2024 conference at London’s Guildhall this month, TFN sat down with Steve Pomfret, founder and CEO of Cygnetise, to talk about his startup, the challenges of global growth, and the differences between VCs in the UK and America. The London-based fintech is known for its Cloud-based SaaS platform and its blockchain technology which helps with digital signatory management.
Check out the full interview below:
Taking banking experience and adding a startup mentality
Pomfret has spent most of his career in the banking sector. “I was working with the large banks,” he said. “I was with my last employer for seven-and-a-half years, so I guess I’m pretty loyal!” He was not, however, a ‘banker’, he told us. “I was kind of like an internal consultant, advising how to resolve inefficiencies, reduce risk, and use technology.” However, feeling that his options for career progression were limited, he decided he needed to strike out on his own.
“Everybody has a personality type,” he told us. “I was never a big corporate personality, and had more of a startup mentality, I like coming across things that are challenging.”
Pomfret’s epiphany occurred when he started exploring and learning about blockchain before it became high-profile. “I realised, ‘hold on, I’m in quite a powerful position because I know the problems that banks have, and now I understand blockchain technology.’ Not many people know both.”
Last year, the startup also secured £2.5 million in a pre-series A funding round led by UK investment syndicate Adjuvo with participation from US VC Massive and existing VC and angel backers.
Finding the solution for a niche problem
Cygnetise’s service, offering digital signatory management, is, by Pomfret’s own admission, ‘stupidly niche’, but incredibly important for large businesses. While there are plenty of services that offer digital signing, Cygnetise addresses the issue of authorisation. By ensuring that signatories are authorised, it can reduce the risks of contract disputes and fraud.
Cygnetise uses blockchain to offer secure, client-owned and controlled, signatory management. However, Pomfret says, they do not talk much about blockchain. “We’ve been using blockchain technology for a long time,” he says, “we sell the benefits of what the blockchain actually provides, rather than what it actually is.”
“Technology should be segregated from the actual application itself, psychologically,” he explains. “So we sell the fact that our customers own their own data, and they can share that on a peer-to-peer basis. That it’s tamper-proof. And we have an immutable audit trail.”
However, despite being an early adopter of blockchain, Pomfret has not embraced AI in Cygnetise.
It possibly speaks to Pomfret’s combination of startup mentality with in-depth experience of the industry’s needs that he’s focused on solving problems, rather than tech trends.
“We’re not using AI at the moment. We are learning with our customers,” he told us. “We’re creating a category, and we’ve built a product our customers then use in life. Our product roadmap is driven by our customers and the industry.”
The future of fintech, and Cygnetise
Pomfret feels that Cygnetise is well-positioned to take advantage of changing trends in fintech.
“I think we’ve seen, in the last few years, more B2C, more customer-focused, applications revolutionising the world with companies like Revolut and Wise,” he said. However, he felt this was changing. “Now, I think the banks are looking to adopt things themselves, so it’s moving a bit more to a B2B focus. I think open banking with B2B is going to be a massive thing.”
And Cygnetise is enjoying the success of its focus, creating a niche market that solves problems by focusing on user needs. Their pre-Series A round last year was over-subscribed, and they are about to expand into new markets.
That, however, brings new challenges. Pomfret notes that even close neighbours can be difficult. “Each country has a different culture,” he says. “You have Spain, France, Italy, Germany, Belgium, and Holland, and they’re all unique.”
It’s for that reason he’s keen to ensure his team reflects the diversity of their markets and can learn from each other. “I’m a middle-aged man, for example, I don’t know necessarily how I’m out of touch with how the younger people may operate, yet those younger people need to learn from the stuff that older people may be doing in a B2B environment.”
Pomfret feels, though, that the biggest culture shift is across the Atlantic, a market they are hoping to enter in the next 12–18 months. “The difference between UK and US investors is quite large,” he told us. “The US approach is generally to take the entire market.”
On this side of the Atlantic, investors tend to take a more cautious approach. “UK VCs are generally more careful,” Pomfret suggests. “They will look at the market size, but rather than only considering taking the whole market, they will be slightly more reserved.”
And for those hoping to follow Pomfret’s path, he immediately recommends the book Crossing the Chasm. However, he quickly adds that a founder’s greatest asset may be the people around them, “in the early days, it was more the advice from friends.”To know more about this fascinating conversation and watch more videos in our Fintech Talks with TFN series, subscribe to our YouTube channel and watch the full video there.
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