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“HR wasn’t the sexiest tech sector… meaning it has great potential”: Interview with Payflow’s co-founders, Benoit Menardo and Avinash Sukhwani

Payflow offers a new flexible way of getting paid, giving employees financial freedom to collect a fraction of the salary they’ve already worked for, whenever they want, through its app. It doesn’t matter which bank the company works with or the employee’s bank – the money is received instantly.

Payflow was born at the beginning of 2020, giving them no other choice but to build a team, develop and launch the product in the middle of the pandemic. With HR departments facing major challenges, Payflow offers employees a way to manage their financial situations with immediacy and flexibility, something that is highly valuable for all kinds of users.

Benoit Menardo and Avinash Sukhwani met at MIT and both worked with Rocket Internet as co-founders of other projects, before they decided to build Payflow together at the beginning of 2020.

Thank you both for joining me today. First, why Payflow? What’s the story?

We’ve known each other for more than seven years. We were college roommates, and we became friends, and we always wanted to build something together. So for us, it was really about finding the right model and the right market. 

When we started at the beginning of the year in February, we saw that the world was changing really fast and that there was a big opportunity in digitizing HR tech and adding fintech to it. So we started to look at different models. And in fact, the Payflow model is not a new model, it’s a model that exists in the US for at least eight or nine years. In fact, when we were both studying there, this mode already existed. 

We looked at the different potential markets and we decided to launch in Spain. We started in February and in only three months we managed to build an MVP and to launch. In the following three months we had our first clients and we started doubling the number of clients every single month. Right now there are more than 5,000 employees using the app. So it’s been really great. We raised a big round, which also obviously helped us to scale and to go faster. And none of this would have been possible without our amazing team. This is a bit of what we are today.

What do you believe differentiates Payflow from its competitors?

The first thing where we differentiate, not just from competitors in the same sector, but from other startups in general, is that we give incredible importance to the team. So for the five or six key positions, we went through 500-plus candidates for each of those, and we interviewed 200-plus for each of those and we’re pretty confident that we hired the best person out there for each of those key positions. 

For us, the team is the most important thing when building a startup because you can’t do it all on your own. So that’s where we invested most of our time and that’s one of our strengths. 

And secondly, we have invested a lot of time in our product. We have never had a failed transaction, our product has worked perfectly for 100% of users 100% of the time. We also are developing a solid back-end to have integrations with payroll software, and we’re also investing a lot of time in having a good user interface and design.

You both have worked around the world before, so what’s your opinion on the environment for creating a tech company based in Barcelona?

We chose Barcelona because it’s definitely one of the strongest tech hubs in Europe. There’s London, Paris, and Berlin but after that Barcelona and Amsterdam, are very strong tech cities. We think that the ecosystem in Barcelona is one of a kind.

A key point is attracting top talent and if you’re a tech company, especially when you’re looking to develop a great product, which has always been a priority for us, Barcelona is really the best choice in Spain and one of your best choices in Europe. There’s a really strong startup community and it’s been great for us to meet other founders and funds.

We’ve had the chance to live around the world and another positive thing about Barcelona is that we are able to build an international team that will allow us to eventually become a global business. There are over 15 nationalities in our incredibly diverse team and that’s something harder to find in other cities in Spain or in Europe.

Diversity is something that customers, talent, investors, and people in general value. If you have a team of 10 people of the same nationality or background, you’ll probably find more limitations than a team with 10 different ideas. We’re an international team with different ways of thinking and that’s how we solve problems faster and better than the competition.

What are Payflow’s plans for international expansion? Which markets are the most important and why?

The international expansion is something that, although we have it in our blood, we’re trying not to think about it too much for this year. We want to focus on our core product and our core market. There is a lot to do in Spain, there is less than 0.1 % of market penetration for our service among all competitors. 

This being said, this is a product with a product-market fit across the world. We’ve been in contact with similar products in South Africa, Vietnam, Indonesia, Philippines, Brazil, Mexico, the US, and the UK, and everywhere in Europe. It’s a universal product in that sense, it’s proven that there is potential across the globe.

The real question is where would we be better than other products. We feel it’s best to start with the southern European region. We’re also exploring a potential expansion in LATAM because it’s a very big market with huge potential. There are no players that have successfully extended across continents. So if we do it we want to do it right. 

Also, expanding within Europe is not that easy replicating the product. Each country has very specific tech requirements for the product to work such as banking integrations, for example. Each country has its own legal requirements and licenses. However, by Q1 or Q2 next year we want to be in one or two more countries, but we want to make sure that we do it right.

What is the long-term vision for Payflow?

Our first objective is to conquer Spain. We want to become the clear market leader in Spain, to improve the product-market fit and our core product. We’re aiming to get around 50,000 users by the end of the year. Next year, our objective will be to enter into one or two other countries to start our expansion, always focusing on the core product. 

The longer-term goal from now to five years is to become the clear market leader in all of those countries that we attack and we want to take our product way beyond salary in advance, way beyond earn wage access or financial education, and our other core features. We want our product to improve financial freedom and wellness for all employees. We will have many additional features and turn into a super app.

We’re halfway between HRtech and fintech. We want to become excellent at what we do, it’s about wellbeing for our clients and the companies they work at.

How do you see the future for the HR industry in the next five years?

Massive digitalization. Even though there are a lot of new companies and products coming in and helping to improve efficiency, there are processes in HR departments that remain outdated. We believe there’s a lot of digitalization to be done. The change will enable the department as a whole to evolve from being an administrative department focused on payroll and onboardings, to a department focused on employees as the most valuable part of the company.

HR wasn’t really the sexiest tech sector. If you’re working on something that isn’t very sexy, it means it has great potential. HRtech is improving recruitment, onboarding, and training, retention, and productivity. These are issues that every single company in Spain, Europe, and the world are aware of and they need proper tools to solve and improve employee engagement. 

You can already see it happening in some countries, it’s inspiring the way now we call HR: ‘Chief People Officer’ or ‘Head of Talent’. It’s no longer called ‘HR’. This means that people understand the importance of it, people understand that people are everything in a company and if you can improve the way they work, the company is going to do better. There’s a lot to do and we’re really thrilled to be part of this big change.

How has the pandemic affected and also benefited the company?

Everything has two sides. Being a B2B2C, the end-user demand has been positively impacted. There is a lot of financial stress and we are one of the best and cheapest solutions. People need a service like this more than ever. 

However, companies are very busy with the current situation and so they have other priorities. Also, when we started, having a Zoom meeting to sell the product was not that popular or ‘normal’. It’s been a challenge closing B2B deals without going for lunch or coffee and building a personal relationship. 

We had to figure out how to get companies to trust us and our product. Now that everyone is talking about the new normal, for us, it’s not new, as we’ve never experienced how it is to launch a company and product ‘normally’.

Do you have any advice for first-time founders?

First of all, to invest a lot of time in the team. You’re never going to be able to do it alone, look for the best people to surround yourselves with. Second, don’t be afraid when you hit a wall. You’re always going to hit walls every day. So just don’t panic, take your time to think around it. You will find a way, there’s always a solution.

For those first-time founders that come from banking, consultancy, and very demanding industries, don’t overthink it, just do it. It’s good to rethink, but what truly matters is to go as fast as you can. Once you’ve launched, you’re going to understand things. People are going to tell you “this doesn’t work because of this or that” and you can do as many PowerPoint presentations as you want but it’s about being faster than the competition. 

Between the moment we had the idea and the moment we had the first transactions, we had less than three months. It’s a race and you need to be fast. 

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Anto Guarin
Anto Guarin
Anto is the Startup Sourcing Manager at EU-Startups. She’s constantly on the lookout for promising startups and projects around the European scene. With a multicultural perspective, she's curious about culture, innovation and technology, strong impact projects, and creativity.

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