Nuno Sebastiao to CNBC: “There is a Need in This Space for a Fully Independent Company”
Feedzai CEO Nuno Sebastiao spoke with CNBC from the floor of Money20/20 Europe this week, where he fielded questions about the state of machine learning for fraud, evolving criminal tactics, and Feedzai’s future.
Here’s an excerpt from the interview:
Nuno Sebastiao: We have 10 out of 25 banks in the world. We have 5 out of the 10 largest ecommerce websites out there. And the way we go to market, is with some, we work directly, and with others, we work with companies that process payments on their behalf, both in Europe, the US, and now, APAC.
CNBC: Is there a chance fraudsters adapt their techniques? And what happens when they do?
NS: …You cannot have a static system that works today, because tomorrow — and not even tomorrow, but in an hour! — it will be obsolete. So you have to have a system that is essentially alive, that is dynamic in nature. And what it does is not stopping fraud only. It’s also looking for what are the new, so-called “vector attacks” that people are trying to use, not necessarily to commit fraud, but to explore potential avenues to commit fraud later on. So it always needs to be on the look-out for these early indicators that might be signaling bad behavior that might be happening tomorrow or a week from now.
CNBC: You’ve raised a fairly significant round of funding last year, $50 million or so. What are your plans for the money?
NS: So, as a company, and because of our heritage, and because candidly we’re doing well, the money we raise, working with the largest financial institutions in the world: they want to look at your balance sheet. It’s very simple. They want to see whether you’ll be a partner that will be here five years from now. And we need to have the financial strength to tell them, “Yeah, we’ll be around.”
So, the money we’ve raised – $86 million so far – essentially, we haven’t used one single dollar of it. We use it is as a war chest to make sure that: A, we can weather a rainy day, and B, to show our clients that – look – we are very strong financially, and you can trust us.
And the consequence is that actually we end up signing contracts that are very long – five years, ten years – into the future. And for a company like us that sells our software as a service, it’s very interesting, also for investors, because now they can compute the amount of revenue that we’re going to have in the next years. And if we keep on growing at the rates that we have, I think it’s a pretty interesting story.
What’s your exit strategy? Are you looking to IPO or for an acquisition?
Personally, I’m having a lot of fun. I think the entire team is having a lot of fun. We were not expecting to grow this fast. I mean, we’ve been doubling every year. And, quite candidly, as long as we keep delivering what we say we will to our investors, to our clients, and to our employees, we’ll just keep executing. We have no intention of having an M&A transaction or whatnot.
And what I do believe is that there is a need in this space for a fully independent company. There is not one of a new generation of technology. I do believe we’re the ones positioned to do that. We’re clearly the market leader.
And so now, it’s an execution game. It’s: how fast can we execute? We just opened APAC. We’re doubling down on engineering, we’re doubling down on innovation. And I think our clients not only like that, but they end up buying more from us for other use cases, such as anti-money laundering, or such as account takeover.