This past March fintech Stax achieved unicorn status after raising $245 million. It also rose from sixth on the WPO’s 50 Fastest Growing Women-Owned/Led Companies of 2021 list to third. The list ranks privately owned, women-led companies that have generated at least $500,000 in revenue in each of the past five years. And, for the fourth year, the fintech was on the Inc 5000 list, at No. 648 in 2022, with 972% 3-year growth.
Driving Stax’s growth is undoubtedly the overall growth of the payment processing industry, which is projected to grow from $90.4 billion in 2021 to $569.2 billion in 2030, according to P&S Intelligence. But perhaps more important was that Stax disrupted the industry with flat-fee pricing, providing customer insights and ease of use to small businesses.
Suneera Madhani, Stax founder and CEO, built her business on insights based on having talked to customers about their pain points when she worked for others and how poorly the industry had served her father, a serial small business owner. As a first-generation immigrant entrepreneur who watched her father persevere after business failures, she didn’t fear failure. Madhani embraced overcoming challenges.
Twenty percent of business owners in the U.S. are first-generation immigrants, although they are only 13% of the total population. Successful entrepreneurs need to take calculated risks. The adversity they and their immigrant parents faced builds the character traits necessary to navigate launching and growing a business.
Madhani’s parents are Pakistani immigrants. Her father owned cafes, restaurants, and convenience stores, which used credit card payment processing. Based on his frustrations and those of her customers when she worked for another payment processing company, she and her brother, Sal Rehmetullah, launched Fattmerchant in 2014. The company was later renamed Stax.
At the time payment processors treated small businesses like a commodity. The relationship was transactional, and there was no added value. “The card industry focused on taking, not giving,” said Madhani. “And there were all these middlemen charging fees without transparency.” Her idea was to charge a flat monthly fee for specific volume levels on an easy-to-use SaaS platform that helped customers gain insights into their business.
A finance major in college, Madhani is a self-professed data nerd. “I was obsessed with learning about the transactional data that’s taking place,” she said. “It was going into a black box, no pun intended. Why isn’t anybody doing anything meaningful with that data?” Stax customers could use data to determine which of their customers are returning, how often, what their busiest times are, and other trends.
Madhani pitched the idea to the credit card processor where she worked. “My bosses pretty much laughed me out of the boardroom, saying it would never work.” Undeterred, she started her own company.
“I had zero experience building software or finding Mr. Visa,” said Madhani. The following 18 months were an uphill battle. “I was rejected by numerous processors, investors, and banks. But I kept showing up.” For the first year, she sold payment terminals out of the trunk of her Volkswagen Beetle. Now the company has 22,000 small and large businesses on the platform, powering more than $23 billion in processed payments.
When Madhani looks back on how hard it was for her, she realizes that part of the problem was the bias she experienced as a woman in an industry with very few women. “There were few women, especially women of color, in leadership, let alone as a CEO. The financial services industry is male-dominated, stale, pale, and male,” she said. Madhani was also young, only 26. “So I do think that now there was ageism, too. I’m a kid without a Harvard degree.”
Once Stax had traction—$5 million in payments processed—Madhani tried to raise venture capital to scale the company. “I quickly found so much sexism and bias in the venture world, too.” As a 26-year-old woman of color, she was not taken seriously. Only 14% of startups with a woman on the founding team raised venture capital in 2015, according to the Q2 2022 PitchBook-NVCA Venture Monitor. It was only marginally better in 2021—17%. Nevertheless, she persisted until she raised money.
She faced bias when she raised Stax’s series A when Madhani was pregnant with her first daughter and the company’s series B when she was pregnant with her second daughter. The questions she was asked would never have been asked of a man who was going to have a child.
Countering bias can take many forms. The honors you win are one way to add weight to your bio and add to your status. It’s an outside voice saying that you’re great, which is more credible than the “about” section on your website. Receiving awards, like being one of the world’s top 10 fastest-growing women-owned companies, isn’t just prestigious; it helps build the company’s credibility. “I’m incredibly proud.”
Madhani joined the Women Presidents Organization Zenith group for businesses that gross over $50 million annually. These groups meet annually to share business expertise and experience in a confidential setting with a professionally trained facilitator. It’s a place to discuss the unique challenges women face and how to address them with women who have been there and done that.
“Entrepreneurship is difficult, and it can be lonely,” said Madhani. “There are so many ups and downs. You need a community that can support you with strategic advice and emotional support.”
This past March, Stax raised $245 million for its all-in-one payment platform from Greater Sum Ventures (GSV), HarbourVest Partners, and Blue Star Innovation Partners, all of which have long invested in the payments industry and will serve as strategic partners to Stax. It also achieved unicorn status, a privately held startup company valued at over $1 billion.
What character traits help you carry on in the face of adversity?
Article Credits: Forbes