At the IFGS 2024 Conference at Guildhall, TFN met Alexander Wulff, the founder and CEO of Scaleup Finance, the company that helps other companies boost their finances. The conversation covered Wulff’s and Scaleup Finance’s journey, the company’s importance to fintechs and startups, and their future growth and challenges.
See the video below:
From school politics to startup
The importance of networks is frequently cited by those involved in startups and investment. And Wulff’s journey highlights how a large network can help in unexpected ways.
Wulff’s first business was a long way from the fintech space, founding a company in the construction sector. “I spent almost eleven years, my entire twenties, building that company and drove it to profitability,” he told us. “My previous co-founders are still running the business.”
However, it was through a network he had formed at school that Scaleup Finance developed. “I actually signed up to become part of a youth party at the age of 15 or 16,” Wulff reveals before adding, “I definitely didn’t want to become a politician!” However, feeling that many of his schoolmates did not share his interest in learning, he joined hoping that he’d meet others who shared his desire to both learn and to make a contribution to the world. It was there that he first met Nicolai Rasmussen, one of his future Scaleup Finance co-founders.
It was when both were enjoying a summer trip at Wulff’s parents’ house with a group of mutual friends that the idea of Scaleup Finance was raised. Wulff and Rasmussen had co-founded an e-commerce business together several years before, after which both had gone on to other startups. Among the people present, many found they were experiencing the same problems with their financial management. Although several were talking about launching what was to become Scaleup Finance, and needing more co-founders, it was not until afterwards that Wulff realised he wanted to be involved.
“It was actually on the way home to Copenhagen,” Wulff recalls. “I was in my car, and one of my other friends who knows me very well said, ‘Alex, I’ve been listening to you now for probably two or three years talking about you want to build something new’.” Wulff describes it as a ‘lightbulb moment’ for him. Calling Rasmussen as soon as he was could, he was soon welcomed as part of the co-founding team.
Solving the finance problem
For Wulff, Scaleup Finance’s is the first to solve a problem that everyone has been working around. “Fintech really didn’t start until 2015 or 2016. That’s where you saw the rise of a lot of new products,” he says. Until then, he, like others, had been using a range of products to cover specific tasks like invoicing or payroll. But around eight years ago, there was what he calls an ‘iPhone moment’ with Open Banking. However, the products were not connected and, for most, Excel became the glue.
“You see the explosion of a lot of tools, but all of them so far have been very focused on administrative financial tasks,” he explains. He recalls his experience in his previous business.“The thing I couldn’t wrap my head around is I have five or six different systems that are helping me out on the operational level. But every single month, I had to export CSV files and other data file formats, take all this data right back into my spreadsheet, this monster spreadsheet.”
It’s for this reason that Wulff sees their main competitor as Excel. “You can ask any founder or any kind of business owner, how do you manage your company and a finance guy will say I use a spreadsheet,” he said. “Whenever we talk to a potential customer, in 99% of cases, they’re using Excel spreadsheets.”
Growing a company and a culture
Wulff feels the Scaleup Finance’s unique position in the market leaves it well-placed for growth.
“My prediction for the category, the market we are in, is that it’s going to be enormously big. I think it’s going to be one of the biggest within the fintech space,” he said. He compared it to the growth of Salesforce. “They started in 1999. And, the last time I checked, were the 33rd biggest company measured on market cap in the world.”
It is, however, a long journey. He recalled the process of starting out and meeting potential investors. “For any kind of startup, fundraising is just like dating,” he joked. “You have certain criteria for an investor. And at the same time, a lot of investors have certain criteria and things they’re looking for in a startup. So you will have a very long period with a lot of meetings, and a lot of these meetings are only 30 minutes initially because nobody wants to waste each other’s time.”
He also highlighted the importance of getting the right team for growth. “The most important job as a founder is getting the most talented people,” he said. “The main thing diversity is going to bring you in recruiting processes is that it expands your talent pool,” he said. “You are able to find even more talented people.”
A major challenge has been maintaining a company culture through growth, Wulff told us. “It surprised me quite a lot is how much you need to be focused on the organisation,” he said. “There’s one very big dynamic change from, let’s say, 20, 25, 30 people in the company, when you are that kind of team, kind of a family tribe.” Further growth, however, changes the relationships. “Suddenly, everybody cannot know each other, and that changes dynamics extremely much. And you need to be focused on keeping the right culture.”
And those thoughts that a company is more than just its finance might be what’s behind Wulff’s plans for the future of Scaleup. “Our vision is to extend into a business form where you can access all kinds of data potential, not just financial data because this is very, very important as a business leader.”
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