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Jouk Pleiter is the CEO & Founder of Backbase, a global fintech that’s modernizing software and infrastructure for banks around the world. Founded in 2003, Backbase was bootstrapped to €200 Million in annual revenue until they raised a single Private Equity round of €120 Million from Motive Partners in 2022, valuing the company at €2.5 billion. They have now grown to over €300 million in ARR, work with 150 banks, and continue to expand across the world.
In this episode, we discuss:
Bootstrapping the company and why they eventually decided to raise external capital
Turning Frugality into a Strategic Advantage. After a negative experience with venture capital that left Jouk feeling out of control and concerned for his customers, he decided to start his next business without external funding. This one giant constraint, forced the company to embrace a mindset of frugality and creativity, focusing on finding product-market fit in the B2B space, leveraging services to generate short-term cash flow. For example, early on, Backbase took on projects like building websites for beer companies—anything to bring in revenue that could be reinvested into their core mission. This approach allowed them to maintain control, even if it meant growth would take a bit longer.
Strategic Capital Infusion: Fortifying for Scale and Seizing Market Opportunities. Over the following two decades, Backbase grew to an estimated $200 million in revenue and transitioned clients to critical 24/7 cloud operations. At this point the company recognized the need to strengthen the company's financial foundation and decided to raise external capital to build a "fortress-type" balance sheet. Jouk sought partners with deep subject matter expertise and operational experience and eventually aligned with Motive Partners, a fund with ex-operators as Partners, including industry veterans from Capco and Fiserv.
Successful strategies for selling software to banks
"Banking is one of the few verticals that are so profitable that apparently it makes sense to keep these [old] systems running."
For Backbase, a pivotal strategy for selling software to banks lies in facilitating progressive modernization via API integration. Banks often grapple with legacy systems they can't easily replace but also recognize their need to evolve. By exposing these systems through a proper middleware layer or API gateway, banks can achieve bi-directional access to their systems of record. This setup preserves essential functionalities while updating them to a more modern system. Combining legacy capabilities with headless FinTech services—such as KYC, AML, and fraud detection—through standardized APIs (what Jouk calls "Grand Central") allows banks to streamline their tech. This approach enables a gradual replacement of siloed applications, journey by journey, without having to overhaul the entire system at once.
Engage Change Makers and Align with Transformation Initiatives. Jouk reminds anyone who’s trying to sell technology to banks about the importance of identifying and collaborating with individuals within banks who are committed to change rather than preserving the status quo. Although sometimes rare, these people do exist. Trying to upgrade a bank’s tech stack is often met with resistance from those invested in existing legacy systems, but successful software vendors are able to build critical mass with decision-makers who possess a change-maker mindset, particularly at the C-suite level. Timing is also crucial: by monitoring trigger events like leadership changes or announced transformation programs, companies can approach banks when they are most receptive. This involves intensive research and relationship-building, focusing on target accounts and leveraging insights from public sources and partner ecosystems to understand when and how to engage effectively.
Why company leaders should think in five-year chapters
“I'm a big believer is that stay true to who you are and try to work with the assets you have, stretch yourself by learning and experience. But like, I think you have to work with your natural capabilities and tune them.”
Jouk Pleiter advocates for entrepreneurs to divide their journey into five-year chapters, much like writing a book. This approach prompts leaders to periodically ask themselves critical questions: "Do I still like it? Can I do this? What type of team do I need around me?" These pivotal moments require self-reinvention and often necessitate difficult changes within the team. As the company evolves, what once was a nimble speedboat operation transforms into a complex organization with multiple commercial and product teams. Adjusting leadership style and team composition every few years helps navigate these transitions.
International expansion, Amsterdam as a tech and fintech hub… and a lot more!
"You just need to behave like what you want to be called"
Think Global from Day One: Act Like the International Company You Aim to Be. In order to succeed internationally, a company must adopt a global mindset from the outset. Backbase, though founded in the Netherlands, made English its default language from day one and leveraged global platforms like Google and LinkedIn to broadcast its value proposition from the beginning. By focusing on the niche market of banking software—targeting around 5,000 institutions worldwide—they concentrated their energy on becoming specialists in their vertical.
Establish Local Hubs to Build Trust and Deepen Customer Relationships. As Backbase grew, the need for a local presence became evident. Early on, everything was centralized at HQ with an extensive travel budget. But clients began requesting closer proximity and Backbase established operations in cities like Manila, São Paulo, and New York. Currently, Backbase has established around 16 hubs worldwide. By being physically closer, they can build stronger relationships, better understand customer use cases, and deliver tailored solutions. Executing well on customer expectations is fundamental, if you do that well, then you build trust and you can do more together.
David’s Book Recommendations:
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Jouk Pleiter, CEO of Backbase – Bootstrapping to €2.5 Billion, Scaling Worldwide, Simplifying Banking Technology