In late November, a cash flow management startup, Settle, raised a $60 million funding round to continue expanding its team and introduce new products to the market. The total amount raised by the company has already reached more than $100 million, although the startup started only in 2019. Settle’s three early employees were Ukrainians in the very first physical office of Settle based in Lviv.
In the interview with AIN.UA, Aleksander Koenig, Settle’s CEO and founder told us about how he started the company, how it grew, and what role the company’s Ukrainian office plays in this story.
Let’s start with the backstory. How and when did you come up with the idea of founding Settle? What problem did you want to solve, and in what market? What is your business model today?
I was working on an early-stage company focused on ‘try before you buy,’ focused on retail clothing. We couldn’t figure out the unit economics was going to work, so we decided to shut down the business. But out of that experience, we were using this accounts payable tool to manage our vendor payments. I thought it was the worst product I have ever used. So when we were brainstorming new ideas to pursue, one idea was to just make a better accounts payable tool.
I knew if we just built a prettier version of it that it wouldn’t be good enough. So we needed to figure out how to make it 10X better. And that’s when I was thinking about my background, in credit and lending [Editor’s note: Aleksander worked in Affirm for more than 4 years], and how could we combine credit with accounts payable? So that was the point we decided to start Settle. Let’s build a full-blown cash management platform, combining these two products into one cohesive user experience.
All e-commerce companies suffer from the same issue — they have a huge cash-flow gap from buying inventory to turning those purchases into revenue. With us, we would completely absolve that need and allow them to grow quicker.
What was your initial capital? Was it savings or FFF money? When and at what attempt did you secure your first venture capital?
We knew we had 6-8 months of work to get an initial product out the door, so we ended up raising a Pre-Seed round in January of 2020. We raised money from my prior boss at Affirm, Max Levchin, amongst other angel investors, including WorkLife Ventures, Background Capital, Village Global, and Avlok Kohli, CEO of Angellist Ventures.
Who helped you from the start? Tell us about your first teammates from Ukraine. Why did you hire your first employees in Ukraine?
Eugene Rudyy, Serge Borbit, and Valeriy Myronov started with me from day 1. I met them at the previous startup we were working on, and I thought they were just fantastic. My co-founder of the previous startup has worked with them for a few years prior on a few different startup ideas on a full-time basis.
So when we shut down the previous company, I did everything I could to convince them to start Settle with me. At the time, I flew to Lviv to meet them in person in the office we had. It was such a big change, I didn’t want to do it over Zoom. So we were able to spend a full 7 days thinking about the idea and planning how we should approach it.
What was your impression about Ukraine during your first visit? Has it changed since then, and how? How often do you visit Ukraine?
I went in November of 2019. I’m originally from Warsaw, so Lviv really reminded me of a Polish city, which I guess was back in the day.
My grandmother’s family actually is from Lviv, so when I was there I was able to see some of the houses they grew up in and I visited the graveyard some of their relatives are buried in.
Shane Moriah, our CTO, and I visited Lviv a few months back to spend time with the team. If it wasn’t for COVID, the plan was to visit more often and have the Ukraine team visit the US, but unfortunately, that made things difficult. We have to make visitations more often now that things have settled down a bit.
Did the Ukrainian team of Settle work remotely at first? When did you decide to open the office?
While the US was remote to start, we actually had our first office in Lviv. When COVID hit, we went remote-first, so we weren’t forcing anyone into the office. And that’s the approach we’re taking now. We want to give employees as much flexibility as we can.
We’re currently opening a brand new office in Lviv, which will be much bigger and nicer, but the policy will remain the same. If you want to work from home, great. And if you want to work in the office, fantastic. Do what’s best for you!
Tell us about Settle nowadays: how many people does Settle hire? How many offices do you have and where are they?
Settle is 45 people today with about 10 or so joining over the next few months. It’s a really exciting time at the company when so much is changing.
We currently have three offices — in Lviv, San Francisco, and New York. We’re remote-first and will remain so, but find it useful to put in hubs in our most populous regions. I do find work is different in person. Instead of just relying on Slack and Zoom, you can just walk up to someone and ask them a question to resolve something sooner.
How did your Ukrainian team grow? What did they do? What are their responsibilities today?
Originally the team was responsible for the entire engineering and product design. Since the beginning, we’ve been recruiting engineers and product designers over the last two years. Now that we’ve grown in the US as well, about half of our engineering is based in Lviv.
We expect to double the team over the next year, so we’re looking for the most talented engineers and product designers!
What can you offer new hires to compete in the labour market? And what about the first employees in Ukraine – have you offered them stakes?
It is very important that every employee receives shares in the company. We want everyone in the company to act like an owner, and the only way to do that is to actually make them owners. So besides competitive pay, everyone receives shares. This way everyone can participate in the upside of the company. And I think what they’ll find is, they’ll make a lot more money from the shares than the salary.
What can you say about doing business and hiring people in Ukraine? What difficulties have you faced, and how did you overcome them? What pros and cons can you name?
Candidly, I don’t know the Ukraine market that well, so we’ve relied quite a bit on hiring through the networks of our Lviv team members. That can only last so long, so we have a recruiter based in Lviv starting soon, which will hopefully allow us to scale beyond our current network.
We also want to play a bigger role in the city, so hopefully, we’ll be able to host some events and share our learnings. If we can help Lviv become a stronger tech hub, then it will only benefit us in the long run.
What are your plans for the future in terms of developing Settle? Please, share any interesting details.
There’s a lot of interesting projects we’re working on and plan on working on, including, scaling the core product, building more integrations building the vendor experience, and international expansion.
