The Story of SEON’s €10M Series A Funding

The Story of SEON’s €10M Series A Funding

Our second round of fundraising was a tremendous success. We share our story to encourage and inspire other startups.

We’re incredibly excited to announce that SEON secured its first significant round of venture capital financing, thanks to the team at Creandum.

The venture capital firm is known for backing the biggest Euro tech success stories such as Spotify, Klarna and Bolt. Angels joining our Series A also include founders of N26, SumUp, Tide, Onfido and ComplyAdvantage as well as the ex-CPO of iZettle and ex-CFO of Revolut.

We couldn’t be more humbled to partner together to take SEON to the next level.

In an accompanying post, our co-founders Tamas Kadar and Bence Jendruszak explain what this means for the startup and our partners. 

But today, we wanted to share how the process went, what we focused on, and why we believe our product-led growth approach helped us seal the deal.

Largest Series A in Hungarian Startup History

Setting a new record for Hungarian companies, this €10M Series A proves that CEE startups are gaining visibility on the world stage. Companies like UIPath, Brainly and Vinted are also brandishing the flag for the region, demonstrating that it’s possible to attract international attention even when your headquarters aren’t based in a traditional startup hub. 

But of course, it all starts with the quality of the product.

Strong Risk Tech as a Cornerstone 

From its earliest incarnation, SEON was always about strong technology. When Tamas and Bence couldn’t find a good risk startup to protect their crypto exchange from fraudsters, they decided to build it themselves.

The products, in short, were designed as an antidote to legacy risk companies, whose expensive integrations and outdated data analysis tools did not meet the needs of small businesses. We wanted more agile tools, with better results and faster implementation.

It turns out SEON and our early adopters weren’t the only ones interested. Innovative anti-fraud technology is increasingly valued by big companies too. Air France, Avis, and Patreon are now all fans and customers of SEON products. 

And building great products was exactly how we wanted to drive our business growth… 

Demonstrating Product-led Growth

One of our key goals over the last few years has been to grow SEON via a product-led growth model. The go-to-market strategy has been successful for companies like Slack, Dropbox and other SaaS, but in the world of risk tech, it’s virtually nonexistent.

Our questions were, therefore:

  • Can we create tools that people really need?
  • What technologies would transform fraud prevention?
  • Can we accelerate time to value for our customers?
  • Can we democratise fraud-fighting for everyone?
  • What would a true SaaS model look like?

In our view, this was what it would look like:

  • Focus on building tools fraud managers really need.
  • Flexible and transparent pricing.
  • Make integration as easy as possible.
  • No multi-year contracts.
  • Free 30 day trial, like Spotify or Netflix.
  • No extra fees for support or integration.
  • Prove value within the trial period, or as early as possible.

The strategy proved immensely successful. After launching in 2017, revenue shot up 4x the second year, and 3x on the third. A seed funding round of €1M from Portfolion, a CEE capital firm part of OTP bank, helped us hire new talent.

In 2019, the startup became profitable, with a 10-25% month on month topline revenue growth. It’s around the same time that COVID-19 hit, and digital transformation accelerated to a whole new level.

It was time to scale our operations.

Vetting the New VCs

Our business wins and ambitious plans clearly resonated with venture capitalists. Within weeks, we had received numerous calls, emails and potential offers. In fact, we found ourselves in the privileged position of being able to choose VCs that made sense for us.

After vetting numerous candidates, we settled on Creandum.

While their portfolio speaks for itself, we were especially excited to work with investors with a clear vision, ethos, and great track record of helping companies we admire.

To wit: Creandum was kind enough to get back to us with their own pitch, in which they highlighted:

  • Our low integration barrier.
  • How positive our customers are about SEON.
  • How our company history pointed to a real business need.
  • How they had considered our roadmap reasonable and achievable.

The VCs had evidently done their due diligence, as the document even came with testimonials from some of our satisfied partners.

Their portfolio speaks for itself, but we were especially excited to work with investors with a clear vision, ethos, and great track record of helping companies we admire. And we are once again proud and humbled to announce that their €10M fund will help us take SEON to the next level.

Focusing on the Next Steps

Closing a funding round feels both like a victory and a challenge. The stakes get higher. Business decisions become more impactful. Luckily, SEON is already a sustainable startup. But it doesn’t mean we plan on resting on our laurels. 

SEON has a long-term game plan and a big mission: to eradicate online fraud. 

This is only possible thanks to all the people at the startup who work hard every day to make it happen. Growing the team, enabling their growth and that of our products to benefit customers is exactly what this investment is all about. 

 

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