My Experience of a Startup Battle
Walkthrough notes and feelings of the moment <3 Verge.Capital took part and, actually, won 1st prize in Disrupt Greece event for 2018 and I would love to share my experience with you! Disrupt Greece was designed by FORTUNE GREECE and Industry Disruptors-Game Changers (ID-GC) to promote innovation, entrepreneurship and support the Greek startup ecosystem. The Disrupt Greece program provides a tribune for new companies to speak about their ideas, products and services in a major event that took place on September 25 (Benaki Museum), with PAPASTRATOS as a strategic partner and with the support of companies and institutional actors. 80 different companies took part in the Disrupt Greece competition; 80 companies with innovative ideas and the view to promote disruptive change within their field of expertise. By the time of the event initiation, 10 out of the eighty contestants were selected by the judges to present their ideas, so we were so excited driving towards Benaki Museum! An Elevator Pitch I was required to pitch for 1 minute and present our concept within the context of an Elevator Pitch. The duration of the pitch make it sound easy, however you have to be so very careful choosing your words! As we went along thinking about drafting our elevator pitch we realized that conveying our message was based on approximately 150 carefully chosen words! The Startup “Battle” Then, it was up to the judges to pick 4 of the best contestants that would pass to the next stage of the competition. The next stage involved a 5 minute “battle”. Two contestants were supposed to battle on the same stage against each other, based on the same questions posed by the judges. I felt like blood stop circulating in my veins when I heard that I was supposed to take part in the first battle! Up to that point I had not allowed myself to believe that we could win 🙂 The first question was whether our product solves a national, regional or global problem. So our offering of a pan-European credit score answered this question easily. Verge.Capital tackles the issue of 510 million EU citizens who do not have a common credit score and fosters financial inclusion for the underbanked European population. The impact of Open Banking slow adoption The second question involved potential risks entailed in our endeavor and how we plan to tackle them. Our venture rides the Open Banking wave. EU has been trying for quite some time now to open up financial services to new entrants within the context of a more efficient market with more players offering greater choices and better prices to consumers. So, the updated Payment Services Directive (PSD2) was introduced ensuring that all EU financial institutions will have their APIs available to fintech service providers, hence granting access to the same type of information from every bank throughout EU. The deadline for banking institution to conform to PSD2 is September 2019. Late adoption from financial institutions would delay our launch and impede our operations and that is why we focus on building collaborative relationships with banking institution way ahead the regulator’s deadline, promoting the added-value of our services and the heads up from early adoption. Then I was asked about our money-making strategy. Well, our service comes with a monthly subscription for financial institutions so as to get access to our credit score reports. They are also the ones who drive their existing or new applicants to our platform in order to facilitate their credit assessment process. Our credit scoring offering is (and will always be) free for consumers. A seasoned team behind the idea Following our go-to-market strategy I had to answer a question about the fit of our management team and the execution of our idea. What is really fascinating about the composition of our management team (and actually made this answer so easy for me) is that it was not selected based on the idea, but the idea was selected based on the expertise of the team. Our CEO, Yiannis Giokas has a successful exit on his back for his cybersecurity startup and strong data science background. I am (Ioanna Stanegloudi) the Chief Risk Officer (CRO) of Verge.Capital and I possess more than 16 years of experience within the field of credit risk, either from within the banking industry or as a senior management consultant. Last but not least, our COO, Dimitrios Nakis, is a seasoned fintech executive. We had the amazing idea to utilize our expertise in order to create a disruptive and innovative product that covers real economy problems and answering this question was piece of cake! How cool is that?! A question on competition and how we differentiate was more than awaited..and it was next 🙂 Up until now, global players like Equifax or local credit bureaus require your credit history in order to assess your creditworthiness and their models are based primarily on negative credit events. This has created a vicious cycle that we want to stop by introducing a credit score that is based on your financial fundamentals and your transactional behavior! On top of that, we have to take into perspective that in the US, a market of 300+ million people, there are more than 5 credit bureaus; it is rational to expect the same in Europe that is a market of 510 million people. On the European startup side there are a number of initiatives in the UK, Germany and Spain who work on credit score platforms but are either focused on their local markets (i.e. ClearScore) or on replacing the credit risk platforms banks are using (i.e. Lenddo). Our vision is to become the next-generation credit score provider for all Europeans. Then, I was delighted to be asked a question whose answer would demonstrate the most fascinating aspect of our offering. How can we assess the underbanked? As a seasoned credit risk professional I am very excited with the huge upgrade to credit scoring capabilities by machine learning and AI techniques. Within the platform there are going to be defined clusters of users based on their base credit score, which will be adjusted over time based on the analysis of their transactional and comparable behavior. We produce the baseline credit score without using transactional data. Our data are further enhanced with contextual data feeds from the plethora of open data available by the EU Open Data Portal. In such a way our platform overtime is able to define creditworthiness for each new user in a shortened period of time, based on small amount of data. In the same time, this practice allows the platform to dynamically adjust the weights of the parameters of the initial algorithm defining creditworthiness baseline, based on the overall users credit score performance. The judges’ committee also had the chance to make one last question and it referred to whether our business was in need of the prize money and how we planned to spend it. Well, since we are currently working on our PoCs, the prize money are to be dedicated in integrating the banking APIs with our platform and to cover legal fees. We won 1st prize!! The winners were announced and Verge.Capital won the first prize! Until the winners were announced, I had not thought one second that we would win. All my efforts were focused to deliver on my pitch and answer the posed questions in the best way possible. Everything happened so fast 🙂 Our venture is taking its first steps and we are so happy to see how excited everybody is for our offering. We received such positive feedback and we are making our first steps on a huge win! Our efforts and next steps will focus to ensure that Verge.Capital will be a success when fulfilling its mission to drive fair access to credit for EU citizens.