Our Future Podcast
00:01:17 · Simran Sandhu, Michael Sikand
[00:01:17] S1: Yeah. It brings out the energy. I feel it. Yeah. Let's, let's get it going then. First startup today we got is Slope. [00:01:23] S0: Funding, dollars 187,000,000. Now, a little bit confusing. I think 120,000,000 of that is in debt, about 60,000,000 in VC equity funding. And it's backed by an insane roster of people. So we have Sam Altman, Y Combinator, Union Square Ventures, Tiger Global, as well as a number of corporate venture capital arms like DoorDash, Dropbox, Plaid, Unity, Opendoor, and Repeat. I mean, I can't even list all the investors here. They're so impressive. The company was started by Alice Dang and Lawrence Lin Murata. Both have incredible pedigrees. Alice went to Berkeley. Lawrence went to Stanford and studied computer science. And they linked up, in 2021, I believe, to build this company, Slope. And the reason they called it Slope is because of Alice's favorite piece of advice she ever got from lead investor, Sam Altman. I still don't quite know what this means, but he said hire for Slope, not the y intercept. I don't know if you can interpret that, but that's, how they came up with the name. So Slope is a B2B payments platform that brings, like I said, the buy now, pay later functionality to the business to business landscape. So a lot of, like kind of companies that are in retail, for example, have to pay for these large inventory shipments upfront. And that can be extremely damaging for a business that's operating within margins and kind of in and out cash flow.
00:02:41 · Simran Sandhu
[00:02:41] S1: So it's $125,000,000,000,000 market, this B2B payments landscape, and $119,000,000,000,000 of it is operating offline. So people are kind of doing these bespoke contracts, not through a centralized platform. And so that's where the opportunity lies in this business. Now, what's cool about it is like one of the things you mentioned, which is the flexible payment terms, but really it's a full suite all in one solution. We talk about it a lot, but I think that's really what is required to win nowadays. So yeah, alongside just the flexible payment terms, they automate your collections process. They will reconcile payments, which is also very, very important. And then another aspect of it is actually assessing the credit rating and the worthiness of the person that you're financing for, right? So this is a person who is seeking a loan or these flexible payment terms. They're able to evaluate that. And that's actually very, very helpful, right? Like you don't want to be offering, you know, net 90 terms to somebody who isn't that reliable in the first place. Now, the big difference here is they are not a bank, right? So that's something to keep in mind. So lead bank is kind of the person who is backing this company. They're the ones actually putting up the money. But the value is they're kind of playing that fintech role, which is like, Hey, we're getting ahead by enabling all this AI automation. We really can provide all these tools to you when it comes to financing, when it comes to your workflows. But at the end of the day, we're not gonna be the ones supplying the money. We have a partner in that business.
00:04:14 · Michael Sikand
[00:04:14] S0: Yeah, dude. I mean, just think about how much a B2B business might depend on just one single client. Yeah. It's so hard. I mean, remember when we were building our agency, you know, there were a few of, you know, major clients and, you know, the invoice had to come in on time, you know, otherwise, you know, things wouldn't be able to make payroll. And I think that happens for, like, a lot of companies. I think you really need to understand, like working in a B2B environment to know that these invoices are large and make or break. You know, you're not operating with a ton of clients, you're focusing on a few. So, you know, there's also an element, it's just hard to get paid, Like it's just hard to get that money in the bank. You know, you have to often hound like invoicing teams, there's lots of email threads and chains. It's again, a lot of like PDF invoices over email and, you know, some bill.com stuff, but really, it's quite scattered. And another interesting thing about this company is they built tooling for these more traditional businesses, kind of like think like we talked about with owner.com. This is very verticalized software. Yeah. So, you know, whether that was being able to pay by check or being able to send orders via fax machine were two things that they added on for these more traditional businesses.
00:05:18 · Simran Sandhu
[00:05:18] S1: Well, I think it goes back to just how much of a nightmare it is for big businesses when it comes to their procurement teams. Like, it doesn't matter if it's a blue chip Fortune 500 company, like trying to get something done with them, whether it's a contract or trying to enable some payment process, it's a nightmare. Like you have to use their portal. It's like really not a fun process. And we've seen a little bit of that on the agency side. But like, think about just, you have people who are building this financing for specific industries, but what if it wasn't just curated to that, right? Like, it's like any business you want to go to where maybe you're spending tens of thousands, hundreds of thousands, maybe even millions of dollars. Yeah. And the solution is, you know, you don't necessarily need a customized solution. You can use the same format that you're using. I think it brings a level of standardization to your process. And for someone who is maybe allocating my spend for this year and I'm trying to track it out, having like maybe three options that I can always bet on, which is we're going to spend this much with this vendor across this year. And we know that we can get net 60 terms out of them. So that gives me a sense of release, right? As the customer to know or just as the customer for this vendor to know that I can essentially better plan out my finances for this year and where I need to budget my spend. Yeah. So tons of value for sure.
00:06:45 · Michael Sikand, Simran Sandhu
[00:06:45] S0: I mean, it's really difficult, right? Because like, you know, if you're doing like net 90 and then, you know, you have to purchase inventory from a supplier Yeah. Then go sell out to consumers. [00:06:56] S1: Totally. [00:06:56] S0: Just think about the sales cycle there. It's very difficult to recoup cash and stay cash rich in these retail businesses, right? So it's a challenging process. And I think what's interesting about what Alice said is she was quoted in this Forbes article by saying, you know, these kind of big players who've dominated in the category, ERP companies, think SAP and Oracle. She said like a great validating moment for this business was that people are leaving their tech stacks with Oracle and SAP for Slope. And that was just like a huge validator for her because if you're you know, the pain has to be real is what she said for you to leave, you know, a company that entrenched and established. And, know, as we know, soft education costs and software are very high. Switching costs are very a lot of friction there. So, you know, if people are adopting this framework for payments, it's probably a big signal that they can take a big chunk of this category and build many, many features into it.
00:07:53 · Simran Sandhu
[00:07:53] S1: Yeah, totally. And I think what's great is like the flexibility you have with the integrations as well, right? So I get a little bit of a Stripe like feeling from this, right? Like the ability to embed it. It's fully integrated within your payment process, right? On your website. But you can choose, you can do no code, you can do low code, an API integration, or like actually go all the way. And so this is really good for maybe a B2B business who is on the fence, right? For them to change their entire financing process or for them to change their entire payment process, that's a big initiative, right? And that comes with huge risk. So this is a great way for you to be able to kind of dip your toes in the water, right? Where it's, Hey, let's just help you use offline payment links, right? That's the no code play, right? And you just get kind of used to using slope and it kind of makes you comfortable, right? And then once you feel like you have a good grasp there, your customers feel good about using it. Now you move to the next level. Now you move to the level after that. And then before you know it, Slope is like fully integrated with your entire payment workflow.