Following the success of last year’s programme, I thought it would be interesting to hear how the selected startups are doing one year on. I spoke to Alan Meaney, the co-founder of Fund Recs, alongside partner, Padraig O’Scanaill.
“Fund Recs was born from a clichéd startup pivot,” Meaney, who has over 10 years worth of experience in the field of Fund Administration, with HSBC and SEI under his belt. He and O’Scanaill had been working on a collaboration tool aimed at encouraging teamwork called Task Messenger. By the end of 2013, they had made some progress with a live product and a few thousand non-paying users. It was then that they were approached by the Fund Administration unit of a large bank to build them a new reconciliation system.
So this was the situation, they were at a crossroads: they were in the midst of trying to figure out how to get users to pay $5 a month, while on the other, they had a large bank asking them to develop a solution for a problem they knew how to solve (and which would pay them more than $5 a month!) “Serendipity had a big role to play as the opportunity came through a friend of a friend.”
Giving Non-Technical Users the Advantage
This is when they realised they had a good idea, one that was staring them right in the face. Within the funds industry, the reconciliation between the cash and the portfolio positions exchanges between the hands of the custodians as well as internal systems of third party Fund Administrators. The point is that when it comes to dealing with money, the physical exchange of money from hand to hand as well as the big reliance on manual processes to facilitate reconciliations seems rather arbitrary, not to mention archaic.
Alan Meaney recognised the need for an automated system which gives non-technical users to take ownership of each process, including and data management: “We’re quickly approaching Straight Through Reconciliations with no human intervention. That’s going to have a big impact on the Industry and give our clients a competitive edge.”
Expanding in London
Fund Recs headquarters can be found in Dublin. The city employs over 13,000 people in the Fund Industry with over 40% of the world’s hedge funds serviced from there. “Ireland will always be a key market for us” - so why then, did Meaney along with his partner decide to expand into foreign territory?
“As great as Dublin is for Fund Administrators both New York and London are the centres for Fund Managers who are ultimately our clients’ clients.” Recognising that you need to meet your competition head on is a risk, but one you should be willing to take if you want to see your startup expand.
Permanent Presence On The Ground, A Hard-Learned Lesson
The advantage for Irish-born businesses is the relatively speedy flight making it easy to hop on a plane for meetings at short notice. However, as Alan noted, processes can take even longer when working long distance: “As we’ve learned signing our initial clients the Enterprise sales cycle is very long. It can take anywhere from 6 months to 2 years from first contact to signing a contract with a client.”
The need for a permanent presence on the ground to chase deals is really important when trying to break a city like London; this was a hard learnt lesson for Alan and Padraig after taking part in the City Insights Programme: “Prospects want to see you committed to the market and making the 7-10 face to face meetings it takes to sign a client is extremely difficult if you to fly over for every meeting.”
Winning New Clients
Alan found out about the City Insights Programme through their Development Adviser in Enterprise Ireland and speaking to London-based expatriates: “it was if they’d custom made a programme for us. It was a no brainer to apply.”
The advisor assigned to each start-up company lives and works in the company’s target marking meaning they are best suited for challenging business models and value proposition as well as integration in the London business climate. Fund Recs was well established in Ireland at the time, with long-term, highly valued customers but they needed help to figure out how to finance winning new clients: “With the feedback and help of the LIBs advisors we settled on a hybrid model that works a lot better and has the best of the old and new world.”
Connecting With The Right People
The City Insights Programme also works to connect the startup company with important contacts in London. Fund Recs had several meetings with prominent brand name Financial Institutions which helped them to develop new relationships: “We’re still pushing hard for the first London based deal but we’ll get there and it will happen much faster with the help of the programme than we could have under our own steam.”
Alan would highly recommend the programme to anyone considering to apply this year: “We had two great LIBs advisors involved with us and the mix of insights, constructive criticism and confidence building helped us shape our overall company strategy as well as an entry plan for London; it was fantastic.”