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and this has been one of the hottest growing areas of financial services Adan is not just a normal payment provider
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while payments usually is a very unsexy piece of our industry you guys made it sexy growth in our Ona platform has been
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very significant we investing for uh for the future if you work with newer technology you get to better quality we
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completely rebuil the infrastructure that typically is run by Banks and by doing that we come to much better
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conversion rates uh for our customers ladies and gentlemen the co CEO of aen hi good see hi good see you hi good
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to see you good to see you let me um give just a little brief overview for a second so Ingo has been with aen since
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uh 2011 first as the CFO and now as co- CEO since May of 2023 um aan is based in the Netherlands
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uh founded in 2006 and is one of the largest payment processors in the world world today uh in 2023 Adan processed
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nearly a trillion Euro in payment volume uh they had net revenue of 1.6 billion EOS and an e Jesus Christ a EIT 743
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million EUR a 46% ea margin incredible um it's a capitalist conference we applaud for
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Eva oh my God can you just say it one more time the company reported a 24% year-on-year
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Revenue growth in h124 they just expanded into India which is really interesting we want to talk to
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you about that um your market cap is today actually I just checked about 45 billion American dollars um so it's one
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of the most successful not just European tech companies of all time but frankly tech companies of all time so welcome
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Mingo thank you thank you for having me today um you're former CFO yeah I'm going to put you on the spot
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um you're no longer the CFO nor the co-ceo of Aden you're an analyst at an investment Bank yeah and J C your
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managing director says put together a spread trade you can be long or short one of Aden and
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stripe how do we construct the business case that's a really good question just just the parameters of how we construct
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the case I would say if you look at this industry um for ourselves and stripe there is a lot to win because I think we
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are the only two companies globally that are investing in technology in financial
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technology and if you look at where most of the business currently is it is with
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the traditional players it's the banks it's incumbent players so I would certainly go for long for both of us
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because I believe that we together going to change this industry uh that's how I
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look at aen versus tripe we come from different angles uh but what I really appreciate about them is the fact that
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they also innovate and uh competition is good we're a company of a lot of athletes we like to compete and
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competition is good so when you do compete in the marketplace are you competing then with stripe or you
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competing more with incumbents where traditional players are looking for payments and then yeah I would say like
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of course there are areas where we compete with stripe uh but if you see where we win most of our business it's
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with the traditional businesses so indeed the incumbents the banks that's where volume comes from U so that's and
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and what do they find they find both the cost is too high and then they find the
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technolog is too brittle for what you need to do today exactly I think if you look at this industry um Banks
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incumbents haven't invested for for ages uh we build everything from the ground up so we have a single platform globally
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uh and what we can do is we can basically uh lower total cost of payments and uh increase your
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authorization rates and that combination is very powerful um and the reason why we can do that is because we have lots
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of data in a single platform now at the end of the day you guys still sit on top
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of these fundamental rails right like meaning is there a way where we are in a world where the traditional payment
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infrastructure and then you know the traditional credit card rails is there a world soon where all of that disappears
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or will that will there is there enough like specifically the networks like Swift the banks themselves El what role
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why these people why ex why exist well it's a good question I think indeed what we try to uh to replace is the
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fundamental infrastructure uh so in the US uh we have our own access to the fat we have a li a banking license in the US
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uh so we don't need commercial Banks to be successful uh and I think that's very
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crucial in our development if you take long term also on the platform side a lot of small businesses they struggle to
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work with banks uh and a lot of the uh software service providers they of course build banking as a service and
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there are only a few companies globally that can offer this and we want to be that player that that that partner for
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these type of companies to help them sell Financial products uh so that's also why we have expanded from payments
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to broader Financial technology do you have you ever had a conversation internally which said something along
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the following lines ah 46% DEA that's a lot we don't need that you know how much
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of that 743 million would grow the business if we just took it to zero to our investors for the next few years
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like could I grow twice as fast is that better in the long run how why why be this profitable I guess maybe yeah I
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think profit is for me the same as value so if we deliver value and also have premium pricing uh Merchants are willing
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to pay a premium and pay the B basically for the value that we bring and I would
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be afraid that if we would just go for the lowest price because I think we potentially could uh we run at the
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lowest cost as an infrastructure um you would basically destroy a lot of value that's in uh still in there and um I'm
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not sure if you would just go for price um that you have the right conversations
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about the value that you bring so that's the reason why we haven't done that so far um but it's of course a question
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that you should always ask yourself like can you invest more in the business to accelerate growth and that's still the
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trade of the making every day our main focus is on Revenue growth if we can invest if we see an opportunity we will
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but we have a long-term view there what's it like building a company based in the Netherlands what is it like
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hiring people where do you hire people do you make them come to the office yeah how the culture changed yeah so building
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an a company in the nland OR starting in the nland at least at least um makes you
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aware that you need to go International from day one like the nland is a super small country uh you can never build a
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very successful business just based on population there so we immediately went uh International but in the beginning uh
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we hired mostly into Amsterdam so we had a very strongly focused amdam operation
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and that shifted like uh 10 years ago so 10 years ago we uh went to the us we started to build our team here uh
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there's a very significant base here now in the US we have more than 800 people uh working in the US uh so it's our um
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largest Market outside of Europe uh growing fastest is already onethird of our total revenues the US and I find
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that um very interesting to see also how that has changed our company we have a different perspective on how we should
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serve um Merchants I think not being local uh in the beginning did not help to solve the real problem so you need to
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have product and Engineering very close to where customers are and I think when we made that shift um we got more
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traction and with the current setup with like over a third of our revenues already in the US uh we see that we win
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a lot of domestic Brands um and I think we're also proving that payments is not a commodity because do you do you find
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it um is there differences in employee issues employee quality between America and Europe I think there are very
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talented people in both markets um I think the honestly the technology Market of course in the US is way more
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competitive than Europe I think we benefit from the fact that in Europe we are one of the few companies um so yeah
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it's relatively easy we're our brand awareness in in in Europe is higher than in the US that's one of the things that
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we're working on right now to make sure that more people get to know us in the end we're business to business brand uh
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so that requires additional um push to uh show what we do but we work for the the largest companies globally whether
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that's online with we work for Google meta Microsoft for retail H&M Nike Gap so there we work for the Best Brands and
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by also having them as referral customers it is better to get into a country like the us if we were
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sitting here sorry some of the like challenges with being based in Europe maybe not on the commercial side but
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just on the shareholder side uh American investors kind of public investors private investors are mostly investing
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mostly in private American and public American companies is it hard to attract a shareholder base does that affect the
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valuation because it's challenging to do so and if you look at the valuation difference in the private market for
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stripe versus your public valuation there's a gap there's a difference in the multiples your it's a 2X gap on
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numers that look very similar and your numbers are similar some of your metrics are much better maybe I don't know if if
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you want to explain the valuation Gap difference or maybe just talk about the challenges of building a shareholder
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base and shareholder interest as a European company yeah that's a good question like when we uh our biggest
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private round was in 2014 and then uh we realized that we want to have Global investor base that's when iconic uh
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General Atlantic but also TASC from Singapore came on board there's still uh they have been very supportive in the
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Years up until the listing we listed in 2018 and when I worked on the listing we
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were quite convinced that we would list in the US uh given the fact that um most
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of Technology stock list here but we when we looked at valuation and also index inclusion Etc we realized that
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listing in uh Europe was as easy as the us or even e easier um and that from a valuation perspective also if we
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benchmarked it to other IPOs at that time that we even got a premium for listing in Europe because we have a
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fully us uh almost like 60 65% at the listing us investor base so it was almost like a US
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IPO um and we got a premium for being a scare tax stock in Europe um and I think
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that combination worked really well for us there is a difference I think between
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uh public and private Market and I think that is that explains for me a bit the difference in in valuation you
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think that'll get rationalized over time I think so ultimately if uhe TR if we're
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if we're both public um you're going to compare the same numbers and it's a combination of growth rates and
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profitability you ever do a deal would you list in the US as well if if I would list in the US like if there would be no
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liquidity in Europe I would list in the US but there's sufficient liquidity in Europe so um you need to have certain
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size but we have the size there is liquid liquidity so it's not yeah these valuations will merge at some
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point when the people who are betting on promise versus performance you know one
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more the public market is performance priv Mark these EIT margins are bananas yeah it's fantastic so if we were
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sitting here 10 years ago this entire conference um would be you know uh centered around crypto and this amazing
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impact and how your business would absolutely be destroyed by crypto and there would be no need for banks or for
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countries or for nation states everything was going to be blockchain yeah it was just everything's going to
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be solved by blockchain and everything goes away um and that obviously none of that has happened but one thing that has
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happened that's really promising um or interesting is stable coins you have Circle in the United States doing really
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well going public um I believe they're still on track to do that then you have tether obviously banned in a bunch of
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countries bunch of problems um and being used for a lot of um illegal activity I'm curious what your thoughts are
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though on the concept of stable coins and you know their their impact on the industry and the business because it
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does seem to be working especially internationally we don't see it here in the United States but in other countries
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tether and circle these things are being used for lots of transactions and people
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believe they'll ultimately be used for business transactions in a major way what are your thoughts on stable coins
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yeah so I think the question is like are you looking at indeed domestic payment flows and then of course I don't think
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that there is a high need for stable coins in well-developed markets and ultimately we are processing
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well-developed markets at the moment um if it's about inde crossborder type of transactions we still work with
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relatively old systems like Swift um with all their challenges they try to innovate like that's the area where I
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would see there is a a future for stable coins indeed if you need to would you ever consider launching one no I think
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we would consider working with stable coins so you might partner with a ex yeah that's always been our model like
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we we want to bring Financial technology to our customers but also working together with the partners that we have
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because they are ultimately also making the a lot of success and and that's where we want to help them Ingo one of
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the things that we talk a lot about is censorship um but beyond idea censorship there's an even more probably corrupting
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thing which is financial censorship and deplatforming and the the way that I think it came on our radar
00:13:59
was there was these truckers in Canada that were protesting Co a few years ago and they effectively got deplatformed
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from Financial Services um how do you balance that as a company that becomes this critical artery to send you know
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money back and forth and process money for millions and millions of people yeah I think one of the ways how we want to
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do this is work with a lot of platforms that basically have these um truckers as
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an example as a customer and I think the unique thing of these platforms they have a lot of knowledge
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about these people and I think combining that knowledge with uh providing Financial technology is a very good
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outcome because they have their knowledge about the industry about um the business data of these people uh
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combined with what we know uh is needed in the financial industry everything around uh money laundering prevention
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terrorism financing if you combine that I think you have a very strong proposition um and I think that that's
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the answer to the more traditional players like the banks that also don't always have the knowledge to do this at
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skill I think that's what we have been timating uh from the start like everything around AML machine learning
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we we've invested highly in that to to build something very scalable and that's what we want to offer to our companies
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is is it complicated being a European company more than an American company in that context where there's a lot of
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points of view that Europe has and do they try to exert that pressure or not no I I think we have really shifted from
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being a European company to a global company and uh we need to comply with local regulations everywhere we see
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ourselves as much as a US company as a European company uh if you look at the operations that we've built here we want
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to make sure that we can compete with each and every uh competitor here in the US on a uh on the same level so it's
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needed as you that you comply with tell us um tell us you're moving to India I mean not you personally but the company
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yeah the exposure in India is incredibly dynamic as you know lots of varying regulations as you also have probably
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dealt with tell us about the journey in India yeah it's a long journey um I think we started to work on this in 2018
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2019 and one of the most difficult things is all the data localization rules in India uh so if you have a
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global platform uh we have distributed database around the world and then you need you realize that you you can't
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store data in of of Indian people people outside of India so we had to really rep
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platform the data infrastructure that we have but we did that we have local data
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centers now in India we got all the licenses and we're one of the few International companies maybe the only
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one right now that can offer this to International companies that want to go domestic or International companies that
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want to go cross border and of course this is um a relatively Niche U play in India today today um but it's a high
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need of our biggest customers totally and and that's what we've always focused on we follow our customers if they want
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to go into a new country we make sure that we're ready for it and this is a long-term investment so this is already
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six years going on um I mean to me India is like China Circa 2005 so if you just
00:17:16
closed your eyes yeah and just bought the entire country index in 2005 you'd look back in 200 even now and you'd be
00:17:23
way way ahead and I think India's on the verge of that multi-decade kind of Renaissance with less regulatory risk on
00:17:30
the back end yeah well at least the regulatory rules are very clear from the start and I think that's what we
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appreciate like ultimately our company is a combination of Technology regulatory knowledge and the right
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banking licenses and if we play that out well we are in such a unique position so
00:17:45
everybody is you know bling oh sorry Go go Jason no no finish go there everybody's talking about Ai and you
00:17:51
have to have an AI answer but what's the real on the ground experience of trying
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to build stuff with machine learning and and AI is there anything in production that really matters and absolutely how
00:18:05
do you think about the future so one of the thing so there I think two angles to
00:18:08
this the first one is how we uh optimize uh transaction routing uh we uh just also launched uh a new way of us debit
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uh routing in the US uh where AI helps us to make the best tradeoff for merchants to lower the cost so you get
00:18:29
20% plus lower cost uh if you route that well and at the same time higher is intelligently figuring out these rails
00:18:36
are cheaper in this moment process over here and it's a yeah and it's of course a trade-off with the authorization rate
00:18:42
right and yeah we work with uh eBay Microsoft Etc to uh to launch this um and very good results so and that's in
00:18:51
production that's in production that runs W the other part the other angle is of course what we do internal for our
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support functions that's more on gen um we are uh we've always built a company around open source also here
00:19:03
we're open sourcing um the uh the models uh but we have a lot of uh data of course internally that we can use for
00:19:11
that have you have you found enough motivation to displace or Reason to displace the humans that do the
00:19:18
equivalent work or has that not happened yet or will it happen do you think or does the business just grow and
00:19:23
everybody is growing and and like we've always had such a high uh focus on automation if if you ask where does iida
00:19:30
margin come from that's because we if you look at our volumes and the number of people that we employ it's a it's a
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really low number relatively um and we will continue to do that so AI is going to help us to further
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scale um and I don't think that we are come on okay Engle I have to push you yeah I mean do you look at these
00:19:47
American companies burning this kind of money to do a business that's smaller than yours of this and like do you
00:19:52
scratch your head thinking how do they what is going on over there do you think that these are huge Investments and we
00:19:59
are uh closely following it like where can we benefit from it but we're always a bit of a smart follower I think that's
00:20:06
that's always been our strategy yeah like what can we use and what can we actually apply in production we are so
00:20:11
much focused on execution I think that's also the only way to prove to uh like we
00:20:16
started the company with Enterprise Merchants the only way to prove to the biggest Merchants out there is to show
00:20:21
that you can do it and just talking about it it's also not really European just to talk about it we are doers we
00:20:27
like to build things and that's how we've created it Ino I'm wondering um how you look at um authoritarian
00:20:36
countries dictatorships monarchies whatever um and providing Services inside of those uh this has been a very
00:20:42
polarizing issue obviously um some companies have chosen to not operate for example in China because of Human Rights
00:20:49
issues and having to you know hand over dissidents in the case of a social network let's say or they're outright
00:20:54
band in them um and then you have this Alliance starting uh the brick bricks has expanded and added a bunch of
00:21:00
countries and there's talk about hey maybe Swift we're going to get off of Swift and we're going to create our own
00:21:05
brics version of Swift um are you operating in those countries how do you think about that and and there's a lot
00:21:12
of hand ringing about oh we're going to be off the US dollar and and off of Swift um what what are your thoughts on
00:21:19
that entire space take it where you'd like so the way how we uh approach this that we ultimately look at like what are
00:21:27
the markets that we want to be active in China as an example I think the Chinese
00:21:31
domestic Market is a super difficult Market to be active uh but we have a huge team in China selling basically to
00:21:38
Chinese Merchants that want to go here in the US uh and that's a very successful route so we try to be
00:21:44
pragmatic here um ultimately if we can comply with the local rules uh we will um and it's it's a tradeoff like can you
00:21:54
do business somewhere there are countries where we have chosen not uh to go so far also because the demand is
00:22:01
limited also maybe it's an unstable country um it's we do it on a country by country bases at the moment now what
00:22:08
about this sort of anti- Swift movement America has too much influence the West has too much influence over the movement
00:22:14
of money they can do things like sanctions as David's talked about on the on the podcast a couple of times is that
00:22:20
real is it is there really going to be an alternative to Swift I think there is a there is a
00:22:26
likelihood there will be Alternatives yeah and Al I think to your example on stable coins like that could be an
00:22:31
alternative longer term also if there are issues with with SH with uh Swift it just may not be a legislative
00:22:37
alternative it may be more technological like yours and others yeah yeah but I think there are companies that also try
00:22:42
to solve this like to have less depandance on Swift even in in in this Western World yeah um do you guys run
00:22:50
sentiment inside of all these payment flows or getting a sense of like the economic health of certain countries and
00:22:57
um has there been any thought to sort of sharing those so that um you know like in America we go through these things
00:23:04
and Europe too unemployment rate comes out you revise it uh GDP numbers come out you revise it and nobody can
00:23:11
actually act on these things until you're looking back 6 months which is a ridiculous way to run an efficient but
00:23:17
I'm sure companies like your or stripe Shopify yeah have you guys ever thought of working together to create a a more
00:23:23
Dynamic view of economies it's certainly something that we want to do with the data I think currently what our
00:23:27
challenge is that most of our growth comes from um share of wallet winds so it's very hard to to um separate this
00:23:36
from the underlying growth yeah the moment we become a more stable company and that that's years away then I think
00:23:43
that's more possible but it's like the data set that we sit on like we have I think over a billion unique Shoppers in
00:23:49
our platform so it's a billion humans yeah that that's a in that's yeah so there there's certainly more to tell um
00:23:58
and and and that's absolutely interesting topic do you ever see PayPal in the market I'm just curious what ever
00:24:04
happened to it yeah well PayPal is an important partner of us so uh we work closely with them
00:24:13
also offering um we just did a press release on their new Express checkout that we do together with them so we see
00:24:20
them more as a partner as than a than a competitor I think that's how how we see
00:24:23
them yeah um last question you we've made a lot of fun of this whole thing this past week founder mode manager mode
00:24:30
whatever um but precisely for you you work as a co-ceo yeah which is a bit of a unique setup um but when it works it
00:24:39
can really work and can you just describe us to us how you guys have built such a great business and how you
00:24:45
divide and share and conflict resolve and what does it mean founder mode versus manager mode yeah I think the way
00:24:51
how we built the company together so Peter is the founder um he focuses currently more on culture of the company
00:24:58
um and is doing a lot of founder conferences meeting our uh Merchants we all meet our Merchants quite often I see
00:25:05
a couple of merchants on on Thursday in San Francisco so that's an important part I think that's how we uh do this
00:25:11
but it's a partnership already like for 13 14 years like that's the time that I know Peter so it's very natural
00:25:19
way of doing things and we have both our strengths and we have both our weaknesses and we know it from each
00:25:24
other and I think that makes it a successful combination thank you you guys please join me in thanking ino for
00:25:32
joining app thanks