Pitch Please

00:00.96
mike_flywheel
What's up everybody. It's Mike we're back here on the pitch please podcast and today I've got cado. We're gonna be talking about their number 1 banking platform for businesses. So if you are a small business if you are a startup if you are a business here in Canada trying to bank not only in Canada but do business globally.

00:10.90
Cato
The learning.

00:18.73
mike_flywheel
They might be the product for you welcome to the show Cado we are going to be talking about loop give us a quick introduction about yourself and then and let's get talking.

00:27.61
Cato
Yeah, for sure. Um, so I am the founder and Ceo of loop. We are a business banking platform. What we do is we help companies that are based in Canada. Who have the need to access banking services both in Canada as well as internationally do that all through a single and unified platform. So many companies today operate online They operate digitally they have customers suppliers all over the world and you can manage them a lot more seamlessly and cost effectively through loop.

00:54.43
mike_flywheel
Cool. Well I want to learn a lot about loop. But I also want to learn a lot about you and even maybe what inspired the journey of loop so take us way back and tell us a little bit about yourself a little bit about where you know your career journey got started and maybe this is in the cards right from the get-go.

01:11.33
Cato
For sure I actually grew up in england some originally from London my parents were both small business owners. So I think you could probably say I've been connected to entrepreneurship for my entire life I you know grew up working in. Ah, both of my family businesses. My mom ran a catering business I used to kind of do everything from cleaning the floors working in the kitchen serving food delivering packages you name it. So I've been very connected to kind of running a business for pretty much my entire life. Um, and that was kind of part of the reason for sure that ultimately I ended up starting my own business um to support other companies. You know I see you know how so soul growing up how hard it is to build a business. You know what comes with being an entrepreneur. Um, and that applies to businesses both small medium and large and I wanted to create a platform that enabled companies founders people who work at businesses to do their business manage their business much more effectively than current financial providers I'd say kind of 1 thing that I noticed in. My parents' journeys is that typically financial institutions and financial providers are almost like a headwind versus a tailwind. There's something that you need to tackle. They should really be something that guides you enables you as a business owner and that is really what we're setting out to do with loop.

02:28.92
Cato
Is building a financial services offering that actually supports companies.

02:30.77
mike_flywheel
Cool I Want to learn a lot about that and what makes you different than traditional banks or platforms that people would consider and where you fit into all that. But it's really interesting that you know you were talking about your family being entrepreneurs and small businesses and your exposure to that it was it. That time that you know you knew you would be a founder because I think there's like entrepreneurship and then there's there's becoming a founder at that time where you like hey I look up to my parents and I really also think that I might become a a small business owner one day or were you like hey I also am the type of person that wants to go solve a big problem. And become ah a founder of a startup because those are very different types of business Journeys right? And so what? what did things look like for you at that time.

03:14.96
Cato
Yeah, yeah, ah, very reasonable question. Um, you know I knew I was an entrepreneur I'd probably say because I'd been studying little side hustles and businesses for as long as I can remember right like I was literally running. Businesses out of my elementary school locker. So you know I've I've been doing stuff for for pretty much as long as I can remember in life as ah as a mechanism to build businesses and and create things I think there's a lot of creativity and involved in entrepreneurship too I'd say it wasn't until later that I realized that that ambition was maybe bigger. Um. Then you know, just building little ventures or little side hustles. But I actually wanted to kind of go and create a meaningful Enterprise I think a lot of that ties to what you feel your purposes in life and to me there's a deep connection between my upbringing I felt. Potentially what my skilletss were and where I can create value and and help other people and I felt like building loop and building. This business was a great way to connect all of those dots together and and that's kind of what brought me to ultimately founding this business which as you say is is not just kind of a regular small business. We definitely have a very. Large ambition and and what we're building.

04:23.76
mike_flywheel
Now Did you did you stumble upon the idea or get impacted by the idea of loop while you were sort of working with your parents or did you were you working somewhere else when this idea came to fruition for you.

04:29.70
Cato
After.

04:41.87
Cato
I would say subconsciously so I'll unpack that a bit. What what I would say I noticed was this is kind of maybe in my teenage years or a little bit later in life. Um, financial service providers.

04:42.23
mike_flywheel
Okay.

04:57.17
Cato
Being a hindrance versus like I said earlier a tailwind and that the light bulbs hit go off at that moment I wasn't like okay this is a problem to be solved but later on I started to kind of develop more of an interest in finance and economics and think about kind of banking. Um. How money works. You know how how money flows how our economy works and started to realize that there's a lot of bureaucracy and inefficiency in the economy specifically tied up in financial services that was kind of I'd say a personal hypothesis that that I developed in in. Life Maybe in my University years and for that I kind of started to connect the dots backwards to oh maybe this is also why my parents struggled with this so I would say it was for sure inspired by that I would be lying if I said I was a a child who said I wanted to go and build a bank when I was older. Um, but yeah, you know, reflecting back on their Journeys and maybe some of the things that were more challenging for them that for sure was part of my realization as to you know this is broken and you know I've even personally experienced this or personally experienced it through my through my parents lives and their journey. So that kind of I'd say just double down on my enthusiasm for wanting to solve this problem and this problem set in particular.

06:18.20
mike_flywheel
Got it. Can you unpack that headwinds versus tailwinds a little bit for me like what are some of those challenges that made banking or current financial solutions feel like a headwind for you or your family or potentially other smbs and startups out there.

06:34.12
Cato
Yeah, for sure I mean look it. It usually starts with a basic premise of there are a number of points of friction in building a business for example, like just to use as 1 of the most kind of common ones you know working capital is a very big point of friction for businesses. And technically like that's why banks exist they they were created to solve working capital issues as in you are going to get paid later but you have expenses today and how do you bridge that gap and ah, you know that's a very general statement but that's fundamentally like why banks were created in the first place but now nowadays banks have. Completely lost their way from that being the intention of what they do and and they basically make money by nickling and diming you on fees. Um, on here. They they provide very poor customer service. They make it really hard to do anything. Um, and there's lots of reasons for that I won't go into kind of every single underlying reason that that's gone come to be the case. But yeah as a result of all of that you know instead of them being a unlock for a business. They actually end up being a point of friction for a business and so how that manifest is in many different ways. But I'll give you some examples with loop. You know I when I kind of was in the journey of starting to build out loops product would speak to lots of business owners and I ask kind of what were your main problems in business I wouldn't even see with respect to banking. What are some of the things that like annoy you or frustrate you and keep you up at night and a lot of things would actually be caused by their financial providers would be like.

08:04.99
Cato
You know I'm waiting to get paid from somebody in the Us and there's no easy way for me to get a payment I'm chasing my customer to send me a wire and I have this other payment that has to go out for my business There's no easy way for this to be facilitated or I have to go into my bank branch literally to initiate this payment in the middle of. A pandemic they're trying me the only way to do this is to like physically walk into a bank branch right? So all of these different kind of issues or pain points that people have circle back to banks not being oriented around customer service around serving the people that they're meant to serve which are ultimately small businesses. Um, so yeah, there's a number of different ways in which that manifests and you know no loop isn't going to solve all of them. But we definitely want to solve as many of them as we possibly can.

08:48.94
mike_flywheel
So well, let's talk a little bit about that then so actually before I'm I'm super curious where the name came from tell us a little bit about how you came up with the name loop.

08:59.55
Cato
Yeah, um, maybe that's a good like short interlude into our our pivot story so we actually were originally called lending loop that was the original idea behind the business and the the reason it was called lending loop is it was original but folks on lending and. The idea for the business was you would lead. You would get the money Back. You've led to a business get the money back and then you would take that invest that in more companies that's creating kind of this virtuous loop where you would you know earn interest and then you know re re reinvest that interest in more businesses and that's help growing growing the economy. Well, That's ah that that that is a little bit now. Different in terms of what we actually do in our mission The same idea around it being a loop very much applied which is like we want to create this kind of virtuous loop in the way that we work with companies. We want to enable businesses help them grow and in turn build products and software that helps other companies be Successful. So I'd say it's around. You know you obviously you often hear the kind of context of a story of a growth loop or term being you referred to as a growth loop so it kind of ties into that mentality of philosophy. Yeah.

10:01.37
mike_flywheel
Got it so they actually even originated from that that before that pivot the first approach and the iteration to how you're helping Snbs tell me about that pivot. What what informed that what guided that was it. Um. Go after new opportunity or was the original idea you know, maybe challenged as you started going through the the business model of it like.

10:24.19
Cato
Yeah, um, several factors but but to kind of break it down into kind of the most relevant points we realized that in order to be a true financial partner for companies you have to be more than just a loan provider. I Think a lot of like companies that just provide Loans or Capital Definitely do a good service but the customer relationship almost starts and ends with just being kind of that that type of a product and I think we wanted to really be much more deeply embedded to our customers and help them. Um, through our relationship in more ways than just access the capital and that's also a way where we felt like our team is very you know very much of kind of software and technology focused team trying to build things that are on the leading or cutting edge of of new technologies and so lending is an area that. Maybe there's certain limitations on innovation like there's only so much you can incrementally do to make alone Technologies better or make lighting better which you know we I would say we did a little bit of but ultimately to really embed ourselves into into a customer's life and help ah a business. Be successful. Ah, it's more than just about Capital. It's about you know how they actually manage their money. Their business. You know working Capital is not just sold by Loans. Sometimes it's about making your payments more efficient making it easier to collect money from customers et Cetera and so it was about being more than just you know a singular point of.

11:53.20
Cato
Contact with a business and being a lot more than that and that that's that's why we went from being landing leap into into being leap.

11:57.52
mike_flywheel
I Love the pivot. How did you know when the right time was to make that pivot when did you feel like we're hitting a wall or the opportunity just not there because I think that's that's hard for some founders right? You get pretty attached to your initial idea.

12:11.46
Cato
There.

12:15.89
mike_flywheel
Eitherre completely hacking through the Mvp and making pivots along the way or you're down a path which just sounds like you were down a little bit and you made a pivot was there like some guiding principles that you used or maybe now looking back on it that you would use to understand when you need to make a real pivot and.

12:20.21
Cato
Yeah.

12:29.59
Cato
Yeah I mean like look I think the first thing that we started to think about was I kind of un economics of the business. So yeah, we're We're very much metrics driven and in our approach to like looking at the health of the company and we're looking at you know Customer Unity economics way to. Take to acquire a customer.. How much would you make off that customer and in what we basically realized that that like lending is more of a transaction by transaction-based business and so to get really great Un economics. It wasn't going to work through just transactional Services. You had to it somehow introduce software into it so that was basically the you Know. Formula So to speak that we came up with for Okay, this is a problem you know it needs to be solved So sp some other solution than just kind of doing you know trying to hit the same nail with the same hammer right? We've got to kind of figure out a new way to solve for for this particular issue. Um. So that was something that we kind of decided. However, um, that that was right before the pandemic then the pandemic happened and I think for many people and we were no exception to this. It had impacts on our existing business. It had impacts on our customers. It was somewhat of an existential moment. And so I would say what it did was really accelerate that pivot like what our original plan was was to kind of get there through almost like turning. Ah you know a ship near 45 and then ° but because of the pandemic What we basically decide to do was kind of more of a.

13:52.64
mike_flywheel
Yeah, yeah.

14:00.63
Cato
Heavier rip and replace type of solution where we went kind of ° all at once and really kind of changed course and I think that was basically down to timing. Um I still I still believe that we would have kind of ended up in a similar place to where we are now but just got it through a slightly different strategy. And I think there's never a true answer on which which is better between 1 or 2 strategies. But the the reason that we did that kind of more heavy heavy reset on direction I would say it's very much influenced by timing.

14:31.83
mike_flywheel
I okay, interesting. Um, but I pulled out the bit around Union Economics there and it sounds like that's you know a piece to probably think about or consider a review more regularly or earlier on not that you weren't doing that but it was a guiding point to maybe what informed your pivot. Ah, at a time when um, a lot of times if you don't make the pivot early enough and you don't find that out then that's why businesses fail right? and so you caught it early. You looked ahead and said we're not just going to push through and say oh okay, great. We're going to have ah a bunch of. Email addresses that I'll eventually convert but you're like the turnover of this is too transactional and we can't create sustainable connection and and revenue from our our customers and so we need to pivot which is which is really interesting. So let's talk about like what loop. Um, what loop.

15:19.98
Cato
Um, yeah.

15:23.97
mike_flywheel
Does then from a differentiator in the Market. What types of things are covered because I think you said hey we started with lending but we've now since expanded what that offering looks like talk to us about what the Breadth of that offering is. And then let's learn a little bit about how loops different than your traditional bank or other financial institution. So.

15:43.32
Cato
Yeah I mean what we realized in this journey of kind of conducting that pivot so to speak was there are a huge amount of pain points and friction that companies deal with and specifically the people who feel that. Pain most acutely are businesses who transact across multiple countries. There are huge amounts of hidden fees costs long timelines associated from up with operating a business in multiple jurisdictions. So just to give you a couple examples of that. Let's say you're a canadian company and you sell in the us and the Uk and your customers and those markets there is no easy way to get a account number and a routing number in the us or an account number and a sort code in the Uk which is their version of our local bank account account a transit number here in Canada. Um. Simple as that sounds it creates a huge amount of challenges for business that's trying to expand into a new market like I would talk to people that would say hey I'm actually trying to grow my business and get into this view of territory. But I can't figure out a way to seamlessly get paid by customers so they end up with a solution. That's kind of a piecemeal solution like maybe you they use a card payment processor like a stripe or maybe they have to go to the bank and and initiate crossborder international wires. Those solutions can cost 2 to 5% of your revenue so they like can really cost you big time. Um.

17:10.79
Cato
Just to be able to own that money in another country the same goes for spending money in other markets like the average credit card charges a 5.7 % foreign exchange fee. So that means if you spend every hundred dollars you spend you're spending almost $6 and just bank fees using your credit card in another country. So there are there are all of these crazy things and all these crazy stats that exist around managing your money across different countries and we would hear these these pain points from founders and business owners who are building companies and like saying I have like all of these points of friction and building my business like and nobody is there solving for these these challenges. So what loop did is basically like we took we took a step back. We said like why does this exist? Well basically it exists because the concept of banks is domestic like banks exist currently in the form of Canadian Banks American Banks British Banks european banks mexican banks there's no concept of like. global bank um but today's version of a business is global like if you're starting a business today the chances are you are probably building a global business you likely have either customers somewhere else in the world or you at least have suppliers or parts of your supply chain that are international. So what we are building with loop is a platform whereby you can manage your money incoming or outgoing in any country that you're doing business in. So if you're earning money from customers in the us sending payments to suppliers in Europe you can do that completely seamlessly at a fraction of the cost that it would take with a traditional bank.

18:41.69
Cato
And the reason is we are building an infrastructure using software to make it easier to manage your money in a single and centralized place. So you don't have to do things through like going into bank branches dealing with legacy wires having to you know, go through like very archaic processes to get do your either your billing or your payments. You can do it very seamlessly through a very modern technology platform in 1 place.

19:04.75
mike_flywheel
That's interesting. So is this um does this technically fit in because you can take payment by credit card obviously and you talked about some like stripe and other transaction platforms that that would make sense for that. Do you see this as like hey for any type of transaction.

19:12.33
Cato
More more.

19:21.24
mike_flywheel
You would use loop instead of a stripe or is this sort of like hey when you want to ah accept and transfer money that's not by credit card. So maybe there's sums of money that start to break into the next tier where it doesn't make sense to use a credit card to receive payment or give out payment.

19:32.75
Cato
Yeah, yeah.

19:38.51
mike_flywheel
Or maybe an e transfer right? to your point e transfers work locally. But the second you go cross-border you can't venmo someone everyone in the us uses venmo ever no one in Canada knows what the heck that is so is it is there a threshold to where loop fits in or is it right? from the first dollar all the way up. So.

19:41.51
Cato
Yeah.

19:53.60
Cato
That what what I would say is business. Owners shouldn't have to figure this stuff out being like should I use stripe should I use Venmmo should I do e transfer what if I'm trying to eat transfer for someone the us like basically we're a software platform that allows you to do all of those different things in a single centralized place. I'll just give you 1 example, let's say you sell on Amazon.com right like you' canadian business and you're selling products on Amazon if if you go right now as a canadianine business sell on Amazon there's no way to easily get that us dollar revenue back to your bankit account your us dollarbankaccount in Canada.

20:16.68
mike_flywheel
At.

20:30.31
Cato
So you either have to use like a Paypal or some ah or like ah your other payment processor out there that payment processor will usually charge about 3 to 5% and fees on every transaction that you do so what loop does is we give you a local. Account number in the us so you get an account number and a routing number so you own money on Amazon it goes into your loop usd account. There. 0 fees associated with that transaction so you literally own $100 you make $100 in your bank account if you then want to transfer that money somewhere else. You want to pay somebody in the us you want to pay someone in Canada the u k. There's no like foss of then figuring out which service you want to use like do I use venmo do I use Paypal you literally just type their information in and Luke facilitates the payment out to that person. So everything when it comes to ingo incoming funds or outgoing funds. We can handle if you like using stripe for example. I would say we don't directly compete with a stripe because you can absolutely still use stripe you can use Amazon you can use shopify all those platforms I would now describe as banking platforms. They're in the business of payment processing so you can use whatever payment processor you want and then integrate that with lip so you can then kind of receive your payment from mine. Payment processor directly into Luke's platform

21:46.63
mike_flywheel
You got it and so what's your your sweet spot. So it sounds like um businesses and and primarily Canadian businesses. Especially those who are looking to have.

21:53.47
Cato
So he.

22:00.30
mike_flywheel
Engagements with customers that are more international in scope rather than just within the 4 walls of Canada is there is that right? but then also I'd love to understand more about this bit where is it for businesses that integrate and deal with businesses or for consumers as well because you said yes, we integrate with your payment processor. But I just try to understand like the dynamic of who's the perfect fit startups small businesses that type of thing who's your sweet spot.

22:23.66
Cato
Yeah, yeah for sure so we can work with only businesses so we don't work with any consumers just as a starting point and that's like a philosophically you know we want to help companies and the services that you need as a consumer. Usually look quite different specifically in the financial space than businesses. So for that reason we said like let's be very disciplined and focus on s andbs and and and businesses. Um in terms of like our sweet spot of customer you mentioned like people who have customers internationally but it's also anyone who has suppliers internationally. So like let's just say like you might even have just Canadian customers. But you might be buying products in China you might need a cheaper way to to buy products there or you might have a credit card and you're trying to spend money in us dollars and you don't want to get hose on on foreign exchange fees. We have a really unique credit card product called a multicurrency credit card. Where you can spend and repay balances in different currencies. So unlike every other credit card where it converts your money for you ours there not you actually get a balance that shows you how much you spend in each currency that that you're spending money. So basically I mean answering the question. It's very applicable for a lot of different use cases I would almost put it down to.

23:23.84
mike_flywheel
So.

23:34.11
Cato
Who is it not useful for it's not useful for people who have all of your revenue and all of your expenses just in the same country and currency. So if everything is in Canada your revenues only in Canada dollars and your expenses are all in Canadian dollars you like you don't buy anything outside of Canada. Then our product is probably not a great fit for you if you don't meet that definition then it probably is a good fit for for you as a business. Um and the one other thing I'll kind of mention on so who do we work with wide variety because what I just mentioned applies to a lot of different types of businesses. We've seen like a lot of companies particularly that sell physical product. So in the manufacturing the wholesale space retail space you know e-commerce and cpg brands. We've seen kind of a lot of adoption of the product from those types of people. Um and you know size wise everyone from. The first couple years getting started to. We have customers using our product who have done are doing $100000000 in revenue so we actually have quite a ah wide diversity of customers.

24:32.61
mike_flywheel
Yeah, wow. So I guess because a lot of the people I was kind of saying before the show we got a pretty mixed audience. We have a lot of founders and so founders that are building a business in Canada most likely many of the times have to seek partnerships with either.

24:42.92
Cato
A.

24:52.40
mike_flywheel
Customers or suppliers that are more international than just just Canada and so there's a lot of value for them even starting up but then a lot of other businesses that are canadian businesses that do business abroad but to your point like someone that I'm just trying to think of something like maybe like my local dentist. Who maybe deals with consumers and their suppliers are probably Canadian suppliers. Not a very long list maybe loop doesn't make sense for someone like that. Ah, but for anyone that does import export probably very valuable cpg all of those other industries that you mentioned. Am I kind of kind of nailing it down right.

25:32.53
Cato
Yeah, yeah, software companies right? like but I mean you'd be surprised by even you know dentists. There might be dentists who are buying molds from china or buying if supplies from the us right? So um. Yeah, you did get it I take generally speaking. Yeah you typically will see it in people who are more in the physical product space. But and I've seen a lot of service-based companies too. You know like consulting firms or 8 marketing agencies who are spending on ads in the us and if you're spending on ads in the us you have to. Use a credit card in us dollars and that's expensive too. So there's a lot of different use cases across the board. Um, you know and so that's why I don't like to overly generalize. Um, but but that being said for sure I I think generally it is around people who you know have either revenue or expenses and different current currencies.

26:03.34
mike_flywheel
Many.

26:10.35
mike_flywheel
Then.

26:18.85
mike_flywheel
I Think it makes sense I Guess the question now. Um at least bouncing around in my head is you've you've created a product that helps simplify what you're using to transact and send money in or out of your Account. You've helped I guess structurally set this up so you've got kind of a bunch of ah accounts. Um, how without sharing all the Ip but like physically how does this work. Do I actually have a whole bunch of accounts and I see my balance go up all across all like a stock portfolio and then I'm sure people are wondering where does loop make money or how do you charge based on this being you know significantly. Lower priced than some of the other options out there and and seemingly very high value.

26:59.95
Cato
yeah yeah for sure um so yeah I mean mechanically, how it actually works is like we partner with financial institutions and financial services providers to make this happen so like loop itself is not a bank. You know we are not ah you know and a regulated financial institution in in the sense of like we don't have a bank charter or a scheduled banking license. But what we do is we partner with other people who do have those licenses and do have that infrastructure and that's where the money is held. That's where the transactions take place. So. When you become a loop customer you are able to more seamlessly transact right? And the way we do that is through our facilitation on the backend with the different financial partners that we work with that keeps your money safe because it's in protected. You know, regulated accounts and it also keeps our cost structure low. So it means that like loop itself does not have to invest a huge amount of money and resources in maintaining all these different things on the back end because we have partners who take care of that stuff for us. So the great thing about all of that for our customers going to the second part of your question is our costs. Are substantially lower than if you were going to go to somebody who for example, has thousands of branch physical branches and hundreds of thousands of employees etc that has a very high cost structure of operating. So.

28:27.60
Cato
Basically the way we're able to make our platform a lot cheaper and more accessible is because our cost structure is much lower than you know Abac 5 Bank just just for example, um now specifically how do we make money so through those partners that we work with in many cases they have other ways of making money. For example. Ah, they earn interest on deposits. So if if you know if they're interest if there's deposit that's being held with them. They'll make money there when you use loop for foreign exchange. Our fees are much lower than a traditional bank but there's still some money that to be made on foreign exchange transfers when you use our credit card product. So when you spend on the card. There's. Money to be made off of that as well. So there's kind of transactional fees that we make there so all in all, there's kind of different ways that banks make money and effectively we share in some of the upside there from a revenue perspective. That's that's kind of how we monetize our customer base. But overall we try to keep those costs as competitive as possible. And make it significantly cheaper for somebody to use us versus using a traditional financial provider.

29:31.18
mike_flywheel
That's cool. So do I think about paying like per transaction or is there like a monthly fee associated with it.

29:35.69
Cato
So you as a user never pay like per transaction. It's not like in a transaction you're paying x dollars that stuff is actually on the backend right? like so it's like the bank is collecting it. There's all these hidden ways that banks make money effectively and you know just to give you an example, you know when you use your credit card. You pay a merchant that merchant is paying a percentage of that transaction some of that is coming back to loop right? like just in to give you 1 example of like how that money gets made right? So you as the card holder aren't directly paying anything. You're just paying for the goods that you're purchasing but on the backend.

30:01.69
mike_flywheel
God.

30:14.25
Cato
There's different people who are benefiting from that transaction taking place right? So yeah, yes.

30:16.30
mike_flywheel
Got it So when I spend it's like a credit card like I'm not paying anything extra the person that I'm paying is is getting a fee off the back. What about when someone pays me. So.

30:25.62
Cato
If Us same idea right? like so you know there's there's different fees associated with that. Potentially if it's a direct bank transfer. There's no fees. So There's no fees if it's like a bank transfer. But obviously if you like process it through a debit or a you know a card transaction. Then yeah, there's there are some fees and so involved with that and then we would we could We would get a percentage of that transaction as well.

30:46.55
mike_flywheel
So that's cool. So I don't have to worry about some additional monthly fee. It's kind of baked into the product and utilization of the platform if you will.

30:54.51
Cato
So we do have multiple fee tiers. Our entry level is free. So like you can use loop for and platform and all the stuff we've been speaking about like making international payments getting accounts in different countries getting a card. All of that is totally free to use. We then do have more premium tiers to leave's offering and the benefits are like we're very transparent about what the benefits are some of those fees that I mentioned that are in the backend that are kind of like hidden into the cost get get cut down if you subscribe. So if you pay if you're on a paid tier just to give you 1 example. Let's say you convert money between canadian dollars and us dollars very often. It would probably make sense to be on our paid plan because the fx rate that you would get the foreign exchange rate would be better on a paid plan than on unpaid plan. So you know you don't have to do that and what I would say is that even on our unpaid plans. It's about 80% cheaper than a traditional bank on the free version so you're just like looking at caught it kind of at cost cost down ah considerably more if you you know want to pay a monthly fee or subscription.

31:50.34
mike_flywheel
Wow. Okay.

32:00.51
mike_flywheel
You got it makes makes sense so you do have a free tier but you can embark on paid tiers depending how much business you're doing um so where where are you where you at you know I'm kind of running through timelines you talked a little bit about this starting I guess just before the pandemic.

32:07.33
Cato
Yeah, you got it.

32:17.69
mike_flywheel
So we're what 3 4 5 years into this at this point almost um and and you're still tick so you've either crossed. You're just about to cross that you know there's the first year milestone and there's the 5 year milestone ah of businesses at least the canadian statistic of of you know, being successful and breaking through.

32:24.26
Cato
So.

32:35.89
mike_flywheel
How long has this been and sort of where are you at in in the journey and how many customers or how are we sort of measure the growth of your business.

32:43.73
Cato
Yeah, for sure. Um, so yeah, but I mentioned kind of the pivot story. So the pivot was ah yeah, happened during the pandemic as they said we operated for a few years before that so're in an operation original as landing leap for a few years we relaunched this loop in June 2022 so loops product as it in its current incarnation has been around for just over 2 years. So that's that's kind of the life of the current platform that our users have been part of but we've been on the journey obviously longer than than that in terms of the traction of loop's product. Um, it's been. But for not growing phenomenally fast and I think we've really identified a core need that many companies have so that we actually feel like we've hit on like a key pain point that that businesses face. Um. Our kind of number of customers now is well over a thousand so we're I think coming up on a yeah couple thousand businesses using the product and our our growth has been awesome as well. So in 2023 ah, we grew about 5 x over 2022 so it was a really awesome year for us. We we brought a lot of new customers in built the product out a lot more as well. So you know I'd say like the the evolution of the product. The stability of it.

34:03.70
Cato
Really took a big leap forward last year and I think kind of want to continue that momentum coming into 2024 we're pretty excited about what's to come and what's in store as a team.

34:10.31
mike_flywheel
Those are some impressive numbers talking about the team. How how big is the team now grown to you're supporting thousands of customers I guess all canadian technically based on on where you fit today. But how has that been? What's the journey been like growing out the team.

34:25.88
Cato
Yeah.

34:27.38
mike_flywheel
Um, especially during like you know your pivots the Pandemic What are like some of your learnings through some of that.

34:33.64
Cato
We probably need another podcast to go through to go through all of that. Um, but right now our team is just over 20 people that we have full time here. We're all in office. Um, so we're we're toronto based company. Located downtown Toronto. Um, and yeah I mean like just to maybe give you a short version of like you know learnings and stuff. Um number one thing I can say on that is always continuously make sure that you have.

35:05.29
Cato
Critical alignment between what you're trying to build and your vision as a company and your team especially at this early stage. It's so difficult to build something you know as you said that the chances of success probability of success is is very low so you need to have a lot of things. Go right to be successful. Um. Is your journey of building a business and one of those things has to be a team that is equally passionate and motivated and bold and about solving for the problem that that you have and I can only say I'd say that's one of the things that I would I would check off for and definitely.. We're not perfect, but that's one of the things that I would say we're We're very passionate and and we all care. Deeply about solving the problems that our customers have.

35:46.44
mike_flywheel
Yeah, it's it's good. Wisdom um, and so where you're at now. What's sort of the next twelve months look like what are some interesting things that people should be on the lookout from from you and the loop team. Okay.

35:57.80
Cato
Yeah, um, 1 thing is international expansion. So I yeah, we're an international product. We help people build their businesses internationally so why doesn't luf do that too right? Um, so that's there that's probably ah I would say that's a fair criticism. You could level of us and I want to I want to. By the end of this year not have that be something that you could call us out for um yeah I believe that what we're doing and what we're solving for is a problem that exists and is pervasive across businesses in all different countries around the world and so we should be also trying to solve for this problem amongst. Companies in another parts of the world. So I'd say that's absolutely 1 big initiative and then you're just continuing to build the product out making it easier for companies to manage their their money in 1 place I'd say there's a lot of more integrations we can do a lot more automation we can build into the platform. Um, things to just streamline our our companies. Our customer workflows. Um and you know just to give you some examples or some sneak peeks like if we want to help companies save money other like key insights off of their data. We can deliver to them. Are there ways we can say you know deliver value almost without being asked. Companies saying like hey here are some things that you can do to improve your cash conversion cycle cut your costs grow faster right? And so lots that we think about on those lines in terms of how we build the business and the products that we offer.

37:24.13
mike_flywheel
So that's amazing and I love that you've got sort of the the business roadmap for international expansion and then you've got your technical roadmap of continuing to evolve the product and its capabilities and and value that you bring to to your customers on on this sort of journey that you've gone through. Um, what's sort of 1 of the pieces either. Maybe it was from your parents even what What's sort of the most valuable piece of advice you've ever received that you you know, really stuck with you and you've sort of carried forward.

37:56.13
Cato
Yeah I mean I think the most important thing you can do is just continue to talk to your customers and know your customers and I think that's applicable to any business out there I don't think there's a single business that this does not apply to um you know, talk to your customers be in front of them. Never get bogged down with like the day-to-day and technical stuff behind running a business because it's so easy to get consumed with all the nitty gritty stuff when you're building a company. Um, so if theres 1 piece of advice I could ever share with somebody who wants to be an entrepreneur who wants to build a business is like be obsessed with who your customer is. What problems you're solving for them and continue to check in on that continue to validate whether or not you are actually doing that because you might start somewhere and then go away from that and realize you've completely gone in the wrong direction and it's important to course correct there because that's something that if you don't course correct, you'll end up in in. Very difficult territory so just continuing to be talking to customers. Maybe it's even every day so that you know that your product and your business is going in the right direction and I think that's for any business any industry small business large business I think that's always true.

39:06.69
mike_flywheel
How do you manage that feedback loop no pun intended. But I think it's you know it's It's a critical insight to make sure you're continuously talking to your customers. But it's the the ways in which people do it very significantly and with thousands of customers.

39:13.76
Cato
Ah.

39:16.94
Cato
Yeah, that.

39:24.20
Cato
Yeah.

39:26.70
mike_flywheel
I imagine you're not you know, calling all 1000 of them or 2000 or 3000 or whatever that is on a daily basis. So are there any tools or approaches that you've kind of used or evolved overtime to stay in tune with your customers. So.

39:37.60
Cato
Yeah, maybe this is where I am a little bit Contrarian on this point but I actually think you should just literally be calling and talking to customers and I don't mean all I Guess it's not practical or possible to speak to every single one of them and I don't mean that what I mean is like. There You know you should try you as a founder as an operator you you know your business probably better than anyone you probably know who are the people that you are your best customers or the people that you want to keep happy are the people that you would want to double a triple them if if you could kind of keep them as part of your business. And those are the ones that you should be speaking to regularly right? and I literally mean like go for lunch with them book a call with them. Give them a demo make them a Beta user of whatever and get their feedback like there's lots of different ways practically to do it. Um, and and that can make me vary depending on the business you're in. But yeah I would say I'm. Very much against you know, crazy tools to do data collection and literally just call and talk to them and understand what they're going through. Yeah.

40:38.44
mike_flywheel
Roll your sleeves up good old fashion roll your sleeves up I Love it and which is totally fine and there's enough tools for so many other areas which may be on that same topic are there any tools or Technologies or things that you and the team have found useful. Um, or maybe you know I'm sure there's multiple but what's sort of the technology or tools you found most useful in your growth journey that you would recommend others to at least reflect on and consider that.

41:06.35
Cato
Um, yeah, um, ah you know I feel like everyone will answer with like an Ai tool these days. So Ill I'll maybe pass that one over to somebody else because I feel like that's that's almost like becoming the generic response and I'll go back to something that maybe was Before. We're just talking about customers I think you know having a good cm um at an early stage is is it may be underrated like knowing your customer who they are where they came from. Yeah,, What's all their get data and information. So when you're going to have that Call. You can go and look up all the information about them. How they've been using the product they you know haven' been interacting with it. You know. Where what were they on their journey I think that of that data makes it a lot easier to do the whole customer Part. We're talking about before like kind of like understanding who your customer is talking to them regularly. So I that might be a very boring answer but I like I'm a basic guy. So.

41:50.97
mike_flywheel
Yeah, got it? No no, you talked about customers and you tied it right back to being able to track those customers is there 1 specifically that you have either.

42:00.53
Cato
If it.

42:06.42
mike_flywheel
Found most useful to grow with your journey or that now you're using because you feel it's the best for you that others should at least look at.

42:15.13
Cato
Um, yeah I think it's very custom to every business. So like I probably wouldn't ever recommend like oh this is the best crm tool like some businesses might even want to build 1 internally if like you have a very nuance or specific product like we use salesforce. Um. It's a very scalable robust platform. It's used by lots of companies but like in itself I think that and most serms like don't they they aren't a solution in themselves. They're just kind of almost like a um you know a blank canvas for you then build your business laws. You can process these into so. I think there's a lot of good ones out there. Um, we use that one just because I'd say I'm familiar with it and what what's more important is that you spend some time integrating your key business information and data into that platform. That's where I would say is worth a time investment. So it doesn't matter what platform you use. But make sure that the data that you care about that's most relevant to you is being captured in there. So you know you know when you're if you're able to use that tool the information in there is relevant versus like being a name and a last name and an email address then just like use Google sheets or or excel or whatever right? but. If you can connect it to you know some of your important business data. That's when a tool like that actually becomes valuable for for you because then you can identify you know I briefly mentioned oh who are your best customers. Maybe you need to look through that tool to know who your best customers are right? So if you need to do that. It's very valuable to have information like.

43:45.33
Cato
How much revenue am I making off these customers that identify here's your Beth customer right.

43:45.72
mike_flywheel
Yeah, Absolutely absolutely. Well These are great like insights and and positive components. But in every founder's Journey. There's something that you know sticks with them as something they maybe didn't catch early enough or maybe somewhere they stumbled and. You know on your journey is there somewhere where like you've stumbled or had a learning that now looking back for someone else in your shoes or if you were to do it all again, something that you'd be eyes wide open to maybe a little sooner or a little earlier. You caught the pivot one which a lot of people. Miss. Um, but curious if there's any others that you think people should be watchful for and.

44:21.12
Cato
Yeah, yeah, I mean I think maybe 2 things come to mind. The first is like we spoke about it a bit before but like knowing your unit economics like knowing ah being very you. Intentional about who you're targeting how you're going to make money off of them. What's like the long term value of the customer I think the way you make money is you know everything that dictates the success of a business I think having intentionality around how you're building your product and it like. If you have a five or ten year plan great but like make sure that you can reflect that in the numbers and and and how you're ultimately going to be a viable business right? like even a business like you know that is very aspirational still has to make money at the end of the day. So yeah, have have a clear plan for how to make that. Um, I say that's number 1 which is like you know we get just get too too many people get too excited about vision and all this other stuff and and don't get focused enough on and disciplined enough on you know, like basic stuff like e but da right and like how do I actually make money. Um. The second one I would say which is more personal I would say it's like less business but you know is important is just like authenticity as ah as a person as a founder. It's like um and when I started a business I was relatively young thought you for the first time I thought I had to kind of like be a a Ceo you know and like kind of almost like put.

45:52.68
Cato
Something on to to go to work so you could be a good leader but I don't I think the more authentic you are the more you are yourself and the more you kind of like represent. Why you're doing what you're doing and and you're honest with people about when you know and also when you don't know the answers to things like the better relationships you build and and the kind of. Better team and culture and environment. You'll build in the company. So I think that's something that I've learned maybe as ah as ah as part of the journey of maturing personally and and that's you know something I would I would definitely advise other people who are just getting started to focus on. Yeah.

46:23.91
mike_flywheel
It's great advice I think also the the unexpected outcome of being authentic as well is the energy can be diverted to other more useful and productive things than being someone. You're not.

46:32.41
Cato
Yeah, yeah, yeah.

46:36.77
mike_flywheel
Um, it's easier to just be you every day and people are going to like it or hate it sure I'm good. You got feedback and you can evolve you but being a fake use a lot of hard work and energy and so it doesn't really lead to the best outcomes when you've got so many other things to chip away at as a founder. Um.

46:42.51
Cato
Yeah.

46:51.18
Cato
For sure.

46:54.00
mike_flywheel
Kato. Thank you so much for for everything we've talked about today I'm sure lots of people by this point are super curious of how they can go either sign up or find out more about loop. Can you let us know the best spot and we'll include everything in the description. But where's the best spot to get started whether it's learning or signing up. and in the year ahead or the months and weeks ahead if there is someone listening is there anything else that you and the loop team might need help with or support with ah and and we'll make sure to include that as well. But if there's someone listening maybe they want to sign up, but maybe they just want to help and.

47:29.20
Cato
Yeah, if I mean if you want to learn more about our business or products or platform where at bank on loop.com so like bank on and thenloop.com. Um and there's yeah, all the ways you can sign up get in touch are are easy to find on our site. Um, yeah I mean look. We have a very big goal and and a very bit broad ambition of building. You know a global financial services platform. Um, we want to expand it internationally we want to keep building out the products that we're offering so we're always you know out there looking for people that. Can work with us whether that means partner with us join our team et cetera um on our on our mission to build loop. So definitely don't be shy connect with me on Linkedin. Um, you can probably find me there pretty easily I I'm sure my my name will probably be in that in the podcast title. Um, and yeah, you know. Building a community of business owners and entrepreneurs is only going to be good for everyone so and hopefully lu can contribute to that you know we're canadian homegrown business based in Toronto. So if we can start to kind of do more stuff with more businesses that are canadian would love to do that. And that's why podcasts like this are always seemed to kind of spread the word and increase awareness and visibility of companies in Canada.

48:43.80
mike_flywheel
I love it? Well, we'll hopefully help you bridge some of those connections. Hopefully some of our listeners reach out I definitely think a lot of them could benefit from using loop um as a customer of yours so I'm I'm hopeful that they'll they'll reach out in that way. Cato. Thank you so much I think what you're doing is just super interesting and super needed. Especially as canadian businesses look to expand and continue to grow their business internationally I think that's a very important piece and you're removing one of the blockers and making that a lot simpler. So best of luck to continue growth for you and the loop team and your international expansions growing out that roadmap. Thanks for taking the time with us today and thank you to everyone that tuned in. Again, we talked to loop bankonloop dot com if you want to check them out and we'll have everything in the show notes below have a good one.