Welcome back to our third installment of our Fintech Founders & Leaders series. This month, we interviewed Nicole Alonso and Liam Brennan-Burke of Paysail. Paysail leverages asset-backed stablecoins to offer an innovative global B2B invoicing solution with immediate access to incoming funds. Just last month, they closed a $4 million seed round led by Uncork Capital with support from Pear VC, Tribe Capital, Merus Capital, and Mischief Capital. Liam and Nicole met as students at Claremont-McKenna College and have been working together to build Paysail for the last year and a half! Keep reading to learn about how they are changing the game for B2B payments and invoicing at a global level.
BE: Okay, so again, thank you all so much for your time today. A little bit of background for our readers: Nicole and Liam are doing some really exciting and interesting work at Paysail to revolutionize business to business payments using stablecoins. Leveraging cryptocurrency and the blockchain in this fashion allows for payments between businesses to happen anywhere in the world in a minute to a matter of a few seconds for a fraction of the cost, which is a huge change to the existing industry. So Liam, I read in your Celo Camp story that the Paysail origin story started way back when you were just 11 invoicing for a neighborhood lawn business – love that early entrepreneurship. What was the most innovative solution you came up with back then? And how have those experiences as well as your experiences that I read about at CMC informed your work at Paysail?
LB: I am not sure there was anything too incredibly innovative about my invoicing solution. At the time, I think the logical solution would have been to use Bill.com or another invoicing platform. But being 11, I decided I would create my own solution. So I learned some Excel, how to track payments, track my work, track expenses, all the billing and invoicing, and was generating PDF invoices, and receiving checks in the mail. So nothing incredibly innovative about it, but it worked great for what I needed as an 11-year-old. But, pretty quickly, I was like, "this is not an incredibly efficient solution." However, I assume businesses not run by 11-year-olds have more efficient and effective invoicing and payment solutions. I was actually homeschooled growing up, so I had a very creative childhood—I was always building things, breaking them, building them up again, often in a very different way, which didn't always make my parents happy. But I grew up definitely encouraged to chase the why behind every how of how things worked, how they were built, and the system that existed when I got a little bit older. And I think that as we continue building Paysail, it's really important that we don't just do things because they've always been done that way, or just follow the industry. One of our Northstars is – let's not just do things because that's how they've always been done, but really question the why behind everything that we're doing and everything that has been done, to really look at where the areas where we can create more innovative, efficient and effective solutions for businesses that are hoping to improve their invoice efficiency and the payments around it.
BE: Absolutely. And I think the essence of all of this is really like you said, "the Northstar" of the whole FinTech revolution that we're experiencing right now. So now a question for you, Nicole. I was so impressed to see that you're part of Pear VC's first cohort of female technical founders. So what challenges have you faced as a woman in this industry, considering the fact that it is more male dominated? And also, in light of these challenges, what opportunities do we have together to make this a more inclusive community?
NA: Absolutely, it's a great question and something that was pretty jarring to me right off the bat. I think I've been fortunate enough that even though in college, I was majoring in computer science, a primarily male-dominated field, at Harvey Mudd where I was studying, there is an almost perfectly even gender distribution. There were always a lot of other females in my classes, and I experienced the same gender distribution with all other previous tech experiences I had had. There was always that focus on diversity in terms of gender and background, and things of that nature. So this was the first real time I feel like in my career I've seen that I'm the minority in this room at all times, which has been a really interesting transition. I think there's a couple different areas that I've noticed it in. First, there's the first impression bias, if I'm stepping into a meeting where Liam isn't there, I can notice a visible difference in how people are talking to me versus if we take a meeting together, which was really shocking to me. And I think initially, I was questioning, are they treating me this way because I'm 20 and no longer in college? Because I don't have a degree – things of that nature? Or is it because I'm a woman? And I think over time, throughout the funding experience, it especially became more apparent to me that there is still a lot of gender bias within the industry. We would speak to VCs, and afterwards, they would make introductions to only Liam and only include me if it was to a diversity fund. I think those things are very apparent. And although probably not intentional by the people who are doing them, it is really impactful. I think that there needs to be an effort to work towards changing that. I'm glad that you brought up the Pear [VC's] female founder circles. I feel like that was the first opportunity I've had within this ecosystem to connect with other female founders and not just female founders, but female technical founders. So I'm very grateful for Vivien at Pear for putting together that program and having me be a part of the first cohort. It was really refreshing to go from meetings all day where I had only spoken to males and then all of a sudden being in this room where I'm not only surrounded by other female founders, but I'm hearing from female founders who were brought in as guest speakers. I'm very fortunate now to actually be speaking to the next cohort, and sharing some of my experiences that I've had so far. So I think there's a lot of progress being made.
I know a lot of people probably saw the statistic that in 2021, only 2% of venture capital funding went to female founders. I think since that statistic has come out, I've seen a lot of dialogue around it, which is great. I think the first step in the process is having those conversations and bringing awareness to it, and then acting on it – the way that Pear has done with the female founder circle – not just bringing together female founders, but making it an environment where those founders are then turning into leaders within the space and can continue educating future generations of female founders and engineers.
BE: Absolutely, that was a beautiful answer. Like you said, it really starts with having these conversations, starting a dialogue, because that's really the only place that we can start from. So thank you for sharing and best of luck with your speakership opportunity for the next Pear cohort!
So I think what's really unique about Paysail is that this is such a great opportunity for you all to revolutionize the way that invoicing is done because it is incredibly dated. So most businesses rely on invoicing solutions built on top of existing bank structures, that in some cases are extremely dated, like over 100 years old in the case of ACH, so these transactions can take up to five days. We're actually seeing that with our app. We're also using stablecoin for storing money. But when you're dealing with people's banks, and you cancel a transaction, it takes three to five business days. So if that happens on a Friday, you have Saturday, Sunday, Monday could be a holiday, it could be up to a week, which is insane, considering how connected everything is. And so Paysail is similarly leveraging stablecoin to make that transfer happen, basically, in a matter of seconds. This is a huge change for the industry. How do you see this fundamentally changing the way that businesses are able to transact with each other?
LB: Definitely, so what Nicole and I saw was that business payments were fragmented, inefficient, and super expensive, especially for cross-border payments, where, to your point, payments are delayed, but it is also so hard to predict when the funds will arrive. It could take three or four days or take over a week. You don't have that predictability in your cash flow. And that's where we saw the opportunity to leverage stablecoins that could offer that really high speed, low-cost nature but also increased predictability and much more dynamic payments. We see the opportunity that, for the first time ever, businesses can move money near instantly for incredibly cheap around the world. And that's where Paysail can provide a high utility solution by enabling businesses to easily engage in more globalized economies. Is there anything that you would add, Nicole?
NA: Yes, I agree completely with everything that Liam said. To dive deeper on the point about predictability: I think it's especially important for small and medium sized businesses that are relying on every single paycheck that comes in to pay employees and to pay other vendors. If there is a gap between a payment that's made, and I had a situation where an investor sent us money from Canada, and it took a matter of weeks to actually be processed and sent to us. If we were a small business, well we are a small business, but if we were relying on that money to pay our employees or for other payments that we have, it would be detrimental. What do you do? You have to find a way to take out loans. I think that's a struggle that small businesses have been facing for a long time. With solutions like Paysail, where you have access to more real time payments and finance and accounting, it's especially impactful to those smaller businesses where having a healthy cash flow matter so much. So I think not only does it make it easier to get paid and pay people, but maybe we'll have the impact that small businesses don't have to take out as many loans because they have that immediate access to cash flow.
BE: Absolutely, and I really see Paysail being a major player in a more international sense, as a lot of these delays are happening on borders between countries. When you're transacting with different banks, people have different policies and there's different currencies. So I think the beauty of stablecoin and Paysail is that it does away with all of this and you have something that's unifying, but it's also empowering for communities and small businesses just like you said.
So I read your article in TechCrunch and I loved hearing about the idea that Paysail wallet users are actually able to earn yield on their stablecoin holdings. You gave the example of countries like Nigeria experiencing currency depreciation, so a wallet of stablecoin is not just able to protect against depreciation that might be linked to government issues or bank issues, but it also empowers the user to actually earn yield on their money and get the most out of their money without having to rely on traditional banks that might not be as accessible. How else do you envision Paysail being able to empower people and improve access to services historically provided by traditional institutions and banks?
NA: Yes, absolutely. I'd start with saying, while, adding the ability to generate yields on stablecoin holdings is something we plan to do in the future, but do not currently have it as an offering. I think we very much want to start invoicing and really focus on that, prioritize it, and then think about, okay, to your point, as we're increasing access to these sorts of payments to businesses, what are other areas in the financial ecosystem that they're struggling with that we can improve upon? I think the first one, as we mentioned, is generating yields on those holdings. And very simply, besides adding additional functionality, I think there's a really unique opportunity to turn every single business that's receiving payment into ones also then completing payments and keeping that flow of funds within the crypto and stablecoin ecosystem. Because then you're seeing this incremental… [speaker froze]
LB: Okay, give her a second to rejoin. But I think that's how we've thought about it, to Nicole's point, operating like a conduit. So giving people access to the best financial services around the world that might not just be offered by your local bank or your local solution, but really in the ethos of decentralization—plugging in the best solutions on the Paysail platform that can empower businesses but also increase their utilization of the platform and the accessibility to other financial services. We're starting with invoicing but pretty quickly expanding beyond that.
BE: Very exciting. Nicole, did you have anything else you wanted to add to that?
NA: I'm not sure where I left off but Liam where you picked up sounded great.
BE: Love that teamwork, both of you. We can move on to the next question. So in a similar vein of thought, if you look down the road five to ten years from now, what are your goals for building Paysail out? From earning yield to addressing other issues in the financial services space that you may see, and also for yourselves as founders, especially young founders in the fintech space with years ahead of you to have such a dramatic impact on this? I think that's so exciting.
NA: Thank you so much. And I really like that question. I think Liam and I are both very ambitious with our goals for Paysail and our personal goals. For me, I think something that's really exciting is currently, there are so few businesses actually transacting and using stablecoins. I think it's something along the lines of 2% of businesses, whereas even today, there's another 39% of businesses that have expressed interest in transacting and using stablecoins. So it's a really exciting problem for us to solve, looking at that 39% of global businesses, figuring out why they are excited about transacting with this but are not doing it to date. We're starting to uncover some of the mystery behind it. A lot of it has to do with education, information and transparency around cryptocurrency that we've kind of seen within the US, this unique trend of people first viewing Bitcoin and Ethereum as mediums of investment rather than mediums of exchange, which has been a different development than what we've seen in emerging markets where it's more necessary to actually hold your wealth in stablecoins as a proxy for the US dollar for wealth preservation to combat depreciating local currencies, as we mentioned before in the TechCrunch article. So I think as we start to see that evolution within the US, it's interesting to pick apart, why businesses aren't really transacting with it, and how can we ease their their concerns about transacting cryptocurrency. So we've started to do so on the platform and we saw that one thing that was really difficult, was creating a wallet. I actually had my mom go through Coinbase, and when she got to the part where she was setting up her wallet and had to manage her seed phrase, she was confused and concerned. She was told that this is something super important. If she loses it, she loses access to her wallet. Even though it's comparable to a password on any other website, because of the jargon and the way it was presented, it was confusing and a reason why she ended up not signing up. So how do we mitigate those barriers to entry and make businesses really comfortable about transacting on the platform? I think it's a really exciting problem to solve and I'm very excited to be a part of it. And I don't know if you want to add anything, Liam?
LB: Yeah, I think how we thought about it is first building a solution for more crypto native businesses looking for a solution that can streamline a lot of their processes already happening in crypto. But our goal is to ultimately build a platform for the businesses that don't really care, whether it's wire or stablecoins. They're looking for ways to transact faster, cheaper, and more efficiently, by building a solution where they can easily jump on the platform and start transacting in stablecoins in a safe, secure way. They can send money instantly anywhere in the world.
NA: Yes, and I would add on the personal front to the second part of the question. It's a really exciting space to be in right now. Because there's so much to learn, and Liam and I have such a unique opportunity to almost be thought leaders to certain extent in the area that we're specifically working on, while meeting other incredible founders who are working to improve fintech and create new innovation in other spaces. I think we've seen within the web3 ecosystem, there is such a focus on community and founders talking to each other, sharing ideas. And I think that will evolve into partnerships and ways to create these really unique and innovative financial ecosystems, not just with what we're building, but with what other founders within the ecosystem are building as well.
BE: Very cool. Just a quick follow up question: in terms of traditional services, how much cheaper is it to transact with Paysail versus, say, send a wire with my bank? I know, personally, I have to wire my landlord rent, and I get charged a fee for every individual wire, and I have to make multiple wires. So you know, something like Paysail applied to individuals would not only allow me to be able to pay rent the day of as opposed to a week ahead of time, but it would also save money. So in terms of businesses, that's a huge margin. Do you have any sense of your margins on the business side of things?
LB: Yes. So that's the problem that we see, legacy payment infrastructure is incredibly expensive without transparency around how expensive it will be. Often, when you're sending money within us, you have a good sense of okay; how much will a wire cost? Probably $30 or $35. But then, when you send money internationally, there's the wire fee, a foreign exchange fee, and additional fees that could be added to that. And that depends on where you're sending the money, how much money you might be sending, all of those factors. Then there's also the time duration; you're not sure how long it will take to get there when it gets there. And I think that that's the nice thing about blockchain technology is you have a better sense of the range of the gas fees associated with the transaction, but then also the speed of transaction. So obviously, you have transparency around the whole process in a way that historically you haven't had with legacy banking infrastructure.
BE: Fascinating. And so final question, just to wrap things up here. Fintech, as we've seen, as we've discussed, is a major disrupter to the world of traditional finance. And of course, with great change comes great responsibility. How are you two infusing your own personal values into the work you're doing at Paysail?
NA: Yes, absolutely. It's a great question, something that Liam and I think about every day, I think, in all the decisions we make, and one component that we've talked a lot about is the education and transparency that we're providing to our users about what's actually happening on the platform itself. You know, if we're creating this technology that makes transacting in cryptocurrency really easy, we still want our users to understand that there are different implications of transacting cryptocurrency versus transacting in fiat, and what those are. We don't want it to be this sort of differentiation between what we're offering on the platform and then the real life implications of converting your cryptocurrency back into Fiat and leaving users confused about what that actually means in terms of tax implications. So that's an area that I think we look to improve every single day on the platform itself, and still have room to do so. We have started by making it a lot more accessible for businesses who don't know a lot about blockchain technology, identifying areas of the platform itself that might be confusing for those individuals and having simple information buttons that people can click and understand. Okay, what are these different currency options that I'm seeing? How do I know which one to choose? That's something I feel a responsibility to provide to our users and I'm very excited about it.
LB: Yes, I think it's also about approaching every decision with, to your point, the weight and the responsibility around that and also approaching every decision with a lot of intentionality, but also bringing in diverse perspectives when you're making decisions. For Nicole and myself, that was really important in the fundraising process to bring in that diversity of perspective because Paysail touches so many different areas of crypto, b2b, fintech, and cross-border payments. So we're really disciplined about having a mosaic of voices around the table that can inform what we're building and how we're building it. Fifty Liams or 50 Nicoles are going to ultimately build the same product. So bringing in that diversity of perspective, both in the form of investors but also employees, is essential so that we're making a product that solves the real needs of users but also is built with the amount of intentionality that this space requires.