At Fintech Nation Fund, we broadly look at every company across 5 pillars of innovation and how that company suits our thesis. The best companies have 3-4 areas of innovation to create 10X differentiation in the market.
Core Product Thesis for Skuad - Companies are hiring more employees outside traditional physical offices in different countries.
Emerging markets - In the war of talent and cost, companies are hiring staff in developing markets and seeking solutions which can help them source talent, manage payroll, VISAs, taxation and enable them to not set up entities across each of such markets.
Developing Markets - SAAS companies in emerging markets are trying to sell in Developing markets and seek to hire a couple of staff to start operations before ramping up operations without hiring the full workforce and setting up corporate structure and infrastructure on day 1.
Superpowers of Skuad:
Founder Experience - The founder has been in the staffing industry supplying talent to a large number of initial clients, unlike several other players with founders who have been merely cloning their American and European counterparts.
Sourcing - Most EOR players help manage the employees you find and identify, while Skuad, with their platform that can evaluate technical programmers and last-mile talent scouting network, also finds people for companies, which was developed based on the founder's background.
Innovation Matrix
Product Innovation - Bundling sourcing tactics like campus fairs and coding evaluation with the traditional EOR stack is the unique product offering.
Distribution Innovation - Positioning Skuad as “Adecco 2.0”, they have targeted non-traditional clients like professional services who have large seasonality in their business. Skuad also worked with VCs to target their portfolio companies during the 2021 tech surge to help growth companies set up offshore development hubs on a Build-Operate-Transfer Basis. Founders like such service as it gives them a way to buy the offshore team if needed in the future.
Process Innovation - The core focus of the company is to cover as many possible touchpoints with CHRO, CFO, CIO related to new employees in new markets by ensuring as much information can be reused and a reduction in operation work for clients as well as their own side. Some lesser appreciated aspects like sending laptops by courier are not easy to execute unless the founding team understands the staffing business and its intricacies well.
Technology Innovation - Skuad built a ledger for a large number of clients who could then access their staff information, including tax filing and handle irregular cases since there is nothing they can buy off the shelf to solve the specific pain points in payroll processing.
Regulatory Innovation -Skuad figured out early in the journey that it is better for them to partner with licensed payment and remittance companies, instead of investing scarce resources in building internal compliance infrastructure.
Exit outcomes
Staffing companies - Traditional global staffing companies need to serve evolving needs of their customers and players like Skuad would be able to solve that by bringing their product/process innovation and offering it to the large distribution network of large staffing companies.
Payment companies - Since a large part of Skuad's business is managing salary and business expense payments, who would want to expand their suite of offerings to their clients, they would want to acquire Skuad as a bolt acquisition to offer to the rest of their customer network.
Private Equity - Ultimately Skuad will be a cash flow generating stable recurring business, which would make sense for players like VISTRA, EQT to acquire as part of their corporate secretariat portfolio offering stack.
Final outcome
Payoneer, a US listed payment major acquired SKUAD for 80m+ in 2024, as a validation of original investment thesis, thus being the largest cash exit in ASEAN SaaS company.
Comentarios