In the spring of 2020, as tech companies laid off staff amid pandemic uncertainty, Trulioo bucked the trend and launched a hiring spree to scoop up talent. Two years later, the global economy is once again in a precarious position, but Trulioo CEO Steve Munford said the company still isn’t downsizing after its strategy early in the pandemic paid off.
The Vancouver-based ID-verification company is cash-flow positive, Munford said, giving it more options than many startups heading into the downturn. Trulioo also raised US$394 million in June 2021 in a funding round that valued it at US$1.75 billion. Still, the cryptocurrency crash has threatened a significant portion of its customer base, even though more regulation could boost demand for its platform, which lets financial-services businesses verify their users’ identities to comply with legal requirements.
Talking Point
Trulioo is at least two years out from an IPO, CEO Steve Munford said in a June interview. He also discussed the impact of the crypto crash on the firm’s customers and said fintechs Trulioo works with are eyeing expansions in South America and India.
In an interview with The Logic at last month’s Collision conference in Toronto, Munford also took stock of where fintech competition is heating up globally, and discussed the firm’s potential path to an IPO.
This interview has been edited for length and clarity.
How many countries does Trulioo operate in now?
We have a solution that will work across 195 countries. Trulioo is really, really strong in about 70 countries. If we can provide a high degree of certainty in 70 countries, that’s a big part of the [world’s] GDP. Then there’s lower degrees of certainty in the remaining parts of the world. We just keep inching up where we can.
What really takes us global is our mission of allowing seven billion people to participate in the digital society. And secondly, our customers’ needs. We have some pretty ambitious customers that we support, and they’ll say, “OK, next year we want to be in Latvia, we want to be in Ghana.” And we say, “OK. We’ll figure that out.”
What markets have financial-services businesses been asking about recently?
We’ve seen a lot of focus on South America and India. We serve a lot of fintechs disrupting markets. And so, as they move from North America through Europe, they’re looking at parts of Asia. India and Brazil are largely untapped markets and seem to have an appetite for crypto and opportunities to disrupt payments. We support a lot of the gig economies there.
What portion of your customer base is now in crypto?
About a quarter.
How do you think the downturn is going to affect them?
Within crypto, what you saw is this emergence of far too many companies. And so I think the shakeup of crypto is going to create this shakeout of a bunch of small players. It’s happening at the same time that regulations are coming into place that require heavy investment. So you’ve got this convergence of regulations and too many overfunded and overhyped players.
I think the crypto industry landscape will look very different in two or three years. There’s gonna be a fair bit of blood among smaller crypto companies, both because demand is volatile, but also they just haven’t been able to meet regulatory requirements.
Does more crypto regulation help Trulioo?
It helps everyone, but yeah, it absolutely helps us. The customer is using our product to solve a regulatory burden or in anticipation of regulatory costs to do business. When you get a world where there’s a smaller number of large exchanges and crypto products, you get visibility of wallet-to-wallet transactions, because each wallet has been verified by the exchange. You go a long way of allowing transparency and trust.
How have you had to change your own approach in light of the downturn?
We’re servicing the crypto market, the online exchange market. Payments is less affected.
Some of our marketplaces were feeling the travel ban. They actually got hit hard in 2020, and they’re rebounding now. We’ve got a bit of a balanced portfolio, but definitely, growth for our customers is not as strong as it was in 2021. So our growth is not as [strong] as it was in 2021. But we are still growing, we’re still hiring, we’re still making investments. We’re still playing the long game, but I would say we’re more cautious. We are watching how all of our customers are faring. We remain vigilant about getting new customers on our platform. But we’re not laying off staff.
Back in 2020, we did not do layoffs, we did not panic, and I think it served us well. But in 2021, I was not investing at the same rate as a bunch of my competitors.
You have past experience taking a company public. What needs to happen before Trulioo files for an IPO?
One is getting to the size and scale that we just have really, really strong visibility into revenue; [where] we feel that we’ve gone through a couple economic cycles and we know what that looks like … and that we can create a set of investors that is large enough that we can actually get the benefit of going public. As a $100-million, $600-million market cap company, you don’t get a lot of institutional investors, you don’t get a lot of trading, you don’t get a lot of analyst coverage, and you’ve got all that overhead of being public. It’s distracting. We have this really ambitious product roadmap—and making acquisitions, executing safely as a private company has a lot of advantages.
I would say we’re probably two years out. We just need to get to a bigger scale. And you’re seeing that a lot—so many of the new unicorns are waiting longer because they’ve got investors that are patient. And didn’t we see too many companies go public last year?
