00:32:26 · Michael Sindicich, Miguel Armaza
And then we obviously pay for the cost of capital and and, you know, funding the customer's accounts and things like that as well. But those are kind of the main ways that we would make money as a company. [00:32:39] S0: Related to that, you have a few channels driving your growth and your volume. You have the direct sales channel, but you also have partnerships, And I guess there's a little bit of tension with your partners because you, in some way, for spend management, you offer competing products, but also these partnerships have to make sense. Otherwise, you wouldn't do them. Maybe talk about that, why pursue these partnerships? We've talked about Art Levy, common friend. You were on the trenches with him, working on the Brex, Navan partnership. That's one. But there's others.
00:33:21 · Michael Sindicich
[00:33:21] S1: Yeah, yeah. Yeah. So, first of all, partnerships in, I think, Fintech or travel are endless. Like, you can think of every supplier as a partner. So every hotel, airline, etcetera. You can think of, you know, the Stripes, the Adyen, the Airwallex, like, the Fintech infrastructure, Visa, MasterCard, Amex. Like, these are partners. You can think about, you know, VAT reclaim services or OCR technology that's powering, you know, reading receipts. The whole thing is, in my mind, like one big partnership ecosystem that delivers a solution that powers a great experience for the end user. So that's like a starting point of how we think about it. The next piece is, you know, who do we choose to go and partner with, and why would someone like a Brex make a good example? And for us, first and foremost, we want to deliver the best traveling experience to travelers. Sometimes that means we're building everything ourselves and selling what we're building. Sometimes it means that we're partnering with somebody else and delivering that solution together. And one thing that Brex was really good at is they were focused on really building infrastructure to be able to issue globally in different currencies. And for us, you know, we're thinking about a company, we're going to be, you know, the most global, most in-depth point of sales, legal, agreements, everything travel. And we're not going to build the world's biggest bank. We're not going to become a bank. We're not going to have the most capital out there. We're not going to offer the best rebates and the best payment terms and all these types of things. So was. And we were continuing to go upmarket. And we built a solution called Connect which allows our travel and expense solution to be paired with any other corporate card because we partnered with the networks. And so someone could use a different corporate card than Navan's, but when you swipe it, you immediately get feedback. Was it in policy? Was it out of policy? Do you need a receipt? If you click the link, you can take a photo. If your admin requests, you know, you need a photo for over $75 or something. So we built this really amazing technology to then be able to go and partner with every other bank and networks and not need to force larger companies to change out their credit cards, which, like, they don't necessarily wanna do.
00:35:42 · Michael Sindicich
And using that technology, understanding Brex's massive scale with currencies and global issuing and really attractive rebates and payment terms, we said, hey, you you guys have something with travel, we have something with payments and expense. But if we think about some of the customers that we have, probably the best solution would be a combination of our T and E and your payments or your payments and expense and our travel. And let's figure out a way to partner together to offer these solutions to the market. And that's what we did. And that's kind of how we approach all the different partnerships that we do. We probably won't ever partner with like, you know, a travel management and booking tool system that's a little too close to our home. And I say that, but I would say that for countries where we operate in because sometimes we sell a very large corporation and they might have a lot of employees and operations in a country that we don't operate in today. And that is where we'll actually find a partner. We just acquired a company called SmartTrips in Brazil a couple weeks ago, and they were our partner in Brazil for large companies who had operations there. It was working so well. The the customers were really happy, and so we ended up acquiring SmartTrips. And we did the same playbook with a company called Trippier in India as well. And so that's kind of one of our inorganic growth strategies is to partner with global companies that we think it would take forever for ourselves to get licenses be able to operate in that market.
00:37:16 · Miguel Armaza
[00:37:16] S0: Did you lead or were you part of the team that was leading the most recent acquisition in Brazil? Yeah. Yeah. So how do you pull off a successful M and A?
00:37:29 · Michael Sindicich
[00:37:29] S1: Yeah. Most important is culture of the company and does it align. I do love the model of partnering with somebody first and then figuring out if it makes sense to acquire them just because things look really good on a piece of paper. But if you can actually partner first and see how they operate, see the solution, see if your customers... Most important is does the customer have a really good NPS in a CSAT through the partner? And are they telling you, yes, this is an amazing solution. This works really well. I'm happy about this. If you can find someone to partner with first, see it in action, then it's a really simple formula on, like, should you acquire them and does the return make sense for the price that you're gonna pay for them? So I think, like, that one was relatively easy. And then I think some of the ones that we've done in the past that we hadn't partnered with before that we had a gap in our solution or in our global reach, those are a little bit more, I would say, more science and a little bit more understanding of the solution and people. But I think we just spend a lot of time with the leadership team of the company that we're thinking about acquiring, really sharing our plans, understanding their plans, feeling who they are as a person, and are they gonna mesh well when we ultimately join forces? And I think that's, like, the most important thing, because if people are, you know, kind of trying to go after the same mission, then it easily aligns things going forward.
00:39:04 · Miguel Armaza, Michael Sindicich
[00:39:04] S0: Let's talk a bit about the current state of the corporate travel industry. [00:39:09] S1: Yeah. [00:39:10] S0: I was just looking at some numbers. It's been growing. Yep. At least dollar amount year over year. Volume, the growth has been less than dollar amount. Is that also because it's getting more expensive just in general to travel? That's one point, but in general, I'd love to hear your take on the state of the industry.