Matt Bird, CEO at Lemon comments on the biggest fintech resets shaping the marketplace in 2024 in this catch up:
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Hi Matt, tell us more about Lemon and what inspired the idea.
Lemon is a subscription tracking and financing company for SMBs. We aim to help SMBs reduce the amount they spend monthly on subscriptions and at the same time, enable software providers to generate more upfront revenue.
My last venture was a subscription offering and we always had this paradox: We wanted to get paid upfront, but customers always wanted to pay monthly. The tricky part was that those customers wanted the discounted annual price for their monthly payments. This is where the opportunity first presented itself, and the more we looked into it, the clearer it became that B2B SaaS companies face the same challenges we had with their business customers. At the same time, we wanted to remove the personal guarantees and expensive credit that many SMBs use to fund their operations. Combining all of these needs into functionalities led to the birth of Lemon.
Tell us about your latest funding and what end users can expect down the line with the platform as it evolves.
We just raised our first round from SFC Capital, Pitchdrive, and SyndicateRoom. We raised £500k to build our initial go-to-market product, which is our subscription tracker – a place where businesses can collate all their subscriptions in one place to reduce fragmentation and overspending. We’ll soon launch our financing product too, allowing SMBs to access cost-saving credit to commit to the annual pricing while retaining monthly payments. Furthermore, We’ll also be enabling SaaS companies to offer this pricing model via their checkout and sales teams. After that, we’ll be diving into the world of payments, analytics, product discovery, and more – the possibilities for Lemon are endless!
What trends are you seeing in SaaS spending globally: what would you highlight for our readers?
SaaS spending is still a business’s third largest expense after people and rent, and is projected to hit over $1trn in transaction volume by 2030. The more businesses are born, the more software is relied on to run and grow those businesses. Businesses, however, are looking to consolidate spending, reduce product fragmentation, and maximize cash flows, so the way SaaS is bought and sold is evolving.
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How are you seeing the British fintech market transform today – what top fintechs are making waves in this region in your view?
There has been a reset in FinTech over the past year or so. A lot of businesses within the space were overfunded and didn’t produce the products or results that they promised. As a result, it has been harder to fundraise in this industry, so the companies that have successfully raised and are in existence today are real companies solving real problems. You can see that there is a heightened requirement for true value.
A couple of companies spring to mind when talking about it; WiserFunding – they are great for business insights to be used for underwriting, whilst Ryft is flying the flag with its payments platform that rivals Stripe. I’m going to class OakNorth Bank as a FinTech as they’re still a challenger, but they’ve got a couple of new products launching which I’m excited to see.
Globally, what fintech trends pique your trends most, and would you like to talk about some of the top fintechs that you think should be on everyone’s radar (and why)?
The first one that springs to mind is ScaylCap based out of Stockholm. As a business that relies on credit to launch our offering, we are constantly met with unrealistic blockers. A typical £25m lending facility will require a £3.5m first loss guarantee that has to be raised via equity and in the UK at the pre-seed or seed stage, and this is extremely tough. Scayl is solving that problem with access to lower amounts of capital to start getting transactions into the loan book.
Taktile is another one I like. They work in the underwriting/decisioning/credit risk arena, and enable companies like Lemon to build a credit decisioning engine without needing to build the modules ourselves. They have a ‘drag and drop’ style product that I feel will be very well received by FinTechs and other institutions.
Five thoughts on the future of fintech and AI?
1. AI will accelerate FinTech and help reshape the finance industry.
2. I’m interested to see how it is received from a data standpoint.
3. It will take out some of the major complexities within the industry.
4. AI will change the way businesses and consumers communicate with finance companies as a whole.
5. It will replace a lot of the cumbersome and time-consuming job roles.
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Lemon is a platform that helps SMBs track & finance their software subscriptions.
Matt Bird, is Chief Technical Officer at Lemon
