True Grit helps a founder become a unicorn

Last March, fintech Stax achieved unicorn status after grossing $245 million. He also moved up from sixth in the WPO’s 50 Fastest Growing Women-Owned/Led Businesses of 2021 list to third. The list ranks private companies run by women that have generated at least $500,000 in revenue in each of the last five years. And, for the fourth year, the fintech was in the Inc 5000 Listin position 648 in 2022, with a growth of 972% in 3 years.

No doubt driving Stax’s growth is the overall growth of the payment processing industry, which is projected to grow from $90.4 billion in 2021 to $569.2 billion in 2030, according to Intelligence P&S. But perhaps more importantly, Stax broke into the industry with flat rate priceproviding customer information and ease of use for small businesses.

Suneera Madhani, founder and CEO of Stax, built her business on insights from talking to clients about their weak points when he worked for others and how poorly the industry had served his father, a small serial business owner. As a first-generation immigrant businesswoman who saw her father persevere after business failures, she did not fear failure. Madhani embraced overcoming challenges.

Twenty percent of business owners in the US are first-generation immigrants, even though they only make up 13% of the total population. Successful entrepreneurs need to take calculated risks. The adversity they and their immigrant parents faced builds the character traits necessary to navigate launching and growing a business.

Madhani’s parents are Pakistani immigrants. Her father owned cafes, restaurants and convenience stores, which used credit card payment processing. Based on his and her clients’ frustrations when she worked for another payment processing company, she and her brother, Sal Rehmetullah, launched Fattmerchant in 2014. The company was later renamed Stax.

At the time, payment processors treated small businesses like a commodity. The relationship was transactional and there was no added value. “The card industry focused on receiving, not giving,” Madhani said. “And there were all these middlemen charging fees with no transparency.” His idea was to charge a flat monthly fee for specific volume levels on an easy-to-use SaaS platform that helped clients gain insight into their business.

Madhani, who majored in finance in college, is a self-proclaimed data nerd. “She was obsessed with learning about the transactional data that is being produced,” she said. “She was going into a black box, no pun intended. Why doesn’t anyone do anything meaningful with that data?” Stax customers could use the data to determine which of their customers return, how often, what their busiest hours are and other trends.

Madhani pitched the idea to the credit card processor where he worked. “My bosses practically laughed at me in the boardroom, saying it would never work.” Undeterred, he founded his own company.

“I had no experience building software or finding Mr. Visa,” Madhani said. The next 18 months were an uphill battle. “I was turned down by numerous processors, investors and banks. But I kept showing up.” During the first year, he sold payment terminals in the trunk of his Volkswagen Beetle. The company now has 22,000 small and large businesses on the platform, generating more than $23 billion in processed payments.

As Madhani recalls how difficult it was for her, she realizes that part of the problem was the bias she experienced as a woman in an industry with very few women. “There were few women, especially women of color, in leadership, let alone as CEO. The financial services industry is male-dominated, stale, pale and masculine,” she said. Madhani was also young, she was only 26 years old. “So I think now there was also ageism. I’m a kid without a Harvard degree.”

Once Stax had traction ($5 million in payments processed), Madhani tried to raise venture capital to scale the company. “I also quickly found a lot of sexism and prejudice in the corporate world.” As a 26-year-old woman of color, she was not taken seriously. Only 14% of startups with a woman on the founding team raised venture capital in 2015, according to the Q2 2022 PitchBook-NVCA Venture Monitor. It was only marginally better in 2021: 17%. However, he persisted until he raised money.

He faced prejudice when he raised Stax’s series A when Madhani was pregnant with her first child and the company’s series B when she was pregnant with her second child. The questions she asked him would never have been asked of a man who was going to have a child.

Fighting bias can take many forms. The honors you earn are a way to add weight to your bio and add to your status. It’s an outside voice saying you’re great, which is more believable than the “about” section on your website. Receiving awards, such as being one of the 10 fastest growing women-owned businesses in the world, is not only prestigious; It helps build the credibility of the company. “I am incredibly proud.”

Madhani joined the Women President Organization Zenith group for companies raising more than $50 million a year. These groups meet annually to share business knowledge and experience in a confidential setting with a professionally trained facilitator. It’s a place to discuss the unique challenges women face and how to address them with women who have been there and done it.

“Entrepreneurship is difficult and it can be lonely,” Madhani said. “There are so many ups and downs. You need a community that can support you with strategic advice and emotional support.”

Last March, Stax raised $245 million for its all-in-one payment platform from Greater Sum Ventures (GSV), HarbourVest Partners, and Blue Star Innovation Partners, all of whom have long invested in the payments industry and will serve as partners. strategic. to Stax. It also achieved unicorn status, a new private company valued at more than a billion dollars.

What character traits help you keep going in the face of adversity?

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