Settle is on a mission to build cash flow innovation for founders. Pulse 2.0 interviewed Settle CEO Alek Koenig to learn more about the company.
Alek Koenig’s Background
What is Alek Koenig’s background? Koenig said:
“My background is in consumer lending, risk management, and financial products. I started my career at Capital One, where I spent six years working in risk management and consumer lending. I then spent four years at Affirm, where I built an underwriting function and drove the work of the credit team there, managing pricing and underwriting decisions, portfolio risk, and financial products. In 2019 I began to carve my path in the startup world and took on the role of CEO at a try-before-you-buy startup. While my first venture ultimately ceased operations, it was during this period of reflection that I identified a glaring inefficiency in the global payment landscape. After that, drawing from my experiences at Affirm, I embarked on a mission to revolutionize the B2B landscape with Settle. I was inspired by the Affirm ethos of honesty and integrity and assembled a team of like-minded individuals, many of whom were former colleagues from my Affirm days.”
Formation Of Settle
How did the idea for the company come together? Koenig shared:
“Having been a payer on Bill.com, we identified numerous areas for improvement, prompting our focus on developing a superior platform. Through user interviews and industry research, we uncovered the scarcity of finance and lending alternatives, sparking the realization that we have a viable business opportunity in front of us. This alignment with the needs of small businesses gave us the confidence to embark on building Settle.”
Favorite Memory
What has been your favorite memory working for the company so far? Koenig reflected:
“That’s a tough one! One of my favorites was visiting our team in Lviv, Ukraine. About a fifth of the Settle team is based there so our CTO, Shane, and I spent time with the team there for a few days. Outside of doing some work together, we were able to just spend some quality time with the team and get to know them better than one can through Zoom. We went a few months before the war started, so we haven’t been able to go back but I look forward to going again soon enough hopefully!”
Core Products
What are the company’s core products and features? Koenig explained:
“Settle’s cash flow platform propels brand growth by allowing businesses to automate AP, manage purchase orders, and access non-dilutive financing with Settle Working Capital. And I know we are the best financial operations platform out there for growing inventory businesses.”
“AP Automation: Settle’s AP Automation solution is designed to save time for consumer brands and their accounting teams by streamlining accounts payable workflow. AP Automation is personalized to the needs of each customer and features bank-level security without setup fees or long-term contracts.”
“Working Capital: Settle Working Capital is financing built for founders—developed with AI-powered holistic underwriting, transparent terms, and flexible repayment schedules tailored to the individual needs of customers. Flexible financing allows brands to spend more strategically and provides the peace of mind that comes with honest financing.”
“Purchase Orders: Settle’s Purchase Orders offers next-level visibility and control for businesses. From creating and sending custom purchase orders to 3-way matching POs, bills, and receipts, customers have access to enterprise-level tools at small business pricing.”
Challenges Faced
What challenges have Koenig and the team faced in building the company? Koenig acknowledged:
“Startup life is really a series of challenges that we work to transform into opportunities. The last year has been a challenging environment for all startups, we took it as an opportunity to drive efficiency in our business and to double down on what we know works. Thanks to a lot of hard work, difficult decisions and dedication from the whole team, we closed 2023 growing our topline more than 65%, achieving cash flow breakeven and helping hundreds of new brands grow their business. When you’ve got a solution that customers really want and need like Settle does, overcoming tough market conditions becomes less of a challenge.”
Evolution Of Settle’s Technology
How has the company’s technology evolved since launching? Koenig noted:
“Before finding product market fit, I believe in trying to find a signal as quickly as possible to see if you’re on the right path or not. So when we launched, we had very bare-bone products. We offered the core tools to take loans, make payments, and keep accounting software up to date, but not much more. Since then, we’ve made significant investments into making the platform more flexible, to meet the varied workflow needs of our customers, and smarter, to really find ways to save them time and money. A few examples:
– We added and are constantly improving document data extraction to pull all the critical data points off Invoices, Receipts, and Purchase Orders down to the line level to save our users time and prevent manual data entry errors.
– We expanded our credit offerings to offer more flexible repayment structures and serve a wider customer base utilizing machine learning to get really good at finding the companies where our working capital can help them succeed”
“I’m very proud of all the work our engineering and product teams have put in, especially exploring where we can strategically employ AI tools, to get us to where we are today. I’m super excited for our upcoming work that will do even more to streamline all the complexities of running an inventory based business into a single easy to use platform.”
Significant Milestones
What have been some of the company’s most significant milestones? Koenig cited:
“Two years after launching our MVP, we crossed a billion in dollars processed! That was pretty cool and something I thought was inconceivable on day 1.”
Customer Success Stories
After asking Koenig about customer success stories, he revealed:
“We have so many exceptional customer brands that we have had the privilege of growing alongside. The most recent example that comes to mind is Branch – they are using our new automatic Purchase Order matching, which completely transformed their process and saved them 150+ hours. We also helped support an insane 7000% growth in their business. ”
“Another that has been a long time customer is Truvani. We fueled their retail expansion to 4000+ stores in 1 year.”
Funding
When asking Koenig about company success stories, he highlighted:
– Founding Date: Dec 1, 2019
– Funding To Date: $101.5 million, Settle is backed by the best in fintech, including Ribbit Capital, Kleiner Perkins, Founders Fund, Max Levchin’s SciFi Ventures, Caffeinated Capital.
– Customers: eCommerce and DTC brands, including Branch, Starface, Soft Services, Dagne Dover, Truvani, HigherDOSE, Pattern Brands (GiR, Poketo), Olipop, and Ghia.
– Metrics: $2 billion in total payment volume processed, 385% average supported revenue growth for brands. –
Total Addressable Market
What total addressable market (TAM) size is the company pursuing? Koenig assessed:
“U.S. B2B payments account for $22 trillion in volume per year, and growing, so there’s no shortage of opportunity. Usually, the largest players in the space only get to 1% market share, and we plan to take a big chunk of it as well!”
Differentiation From The Competition
What differentiates the company from its competition? Koenig affirmed:
“Settle is laser focused on ensuring CPG brands thrive with cash flow tools designed for inventory-based businesses. We built a modern but super simple platform for all their AP needs including automated 3-way matching, which is a huge differentiator that protects them against overpayments and fraud. Our AP and PO tools are designed to save brands time by eliminating manual tasks such as bill data entry and manual PO creation and matching while allowing them to customize Settle to their needs such as adding brand logos and custom variations to POs. We also have built-in Working Capital providing transparent and holistic AI-powered underwriting with predictable payment schedules. Settle’s platform also gives brands a real-time window into their cash flow with visual dashboards that project their weekly cash outflows for smarter financial decision-making. And one I am extremely proud of, is our unmatched customer service. We strive to know the needs and understand business challenges, milestones to make us better proactive partners.”
Future Company Goals
What are some of the company’s future company goals? Koenig pointed out:
“We’ve always been on a mission to remove the obstacles CPG brands face as they scale. In the coming year, you’ll see Settle double down on that mission by helping brands replace their spreadsheets and get back literally weeks of time they currently spend managing their product catalog, calculating landed inventory costs and planning what to order. We’ll also be investing heavily to support our accounting channel partners – ensuring that we are making their lives easier by eliminating tedious manual tasks and helping them generate insights for their clients.”
Additional Thoughts
Any other topics you would like to discuss? Koenig concluded:
“We launched 3-Way Matching the last week of March! It automatically reconciles POs, invoices, and GRNs, which our customers are finding so much value in. It keeps all of your documents in one place, making it easy for team members to collaborate. We’re focused on making back office jobs of e-commerce companies a breeze.”
