Cleafy’s Contrarian Growth Strategy: Why Avoiding the US Market Made Them Stronger

Conventional startup wisdom says launch in the US market first. But in a recent Category Visionaries episode, Cleafy CEO Matteo Bogana revealed why bucking this trend became their strategic advantage.

“The most important GTM decision that I made has been not to start in the United States,” Matteo explains. This choice wasn’t universally popular – even within Cleafy. “At the beginning, it was something that was actually not really appreciated by everyone because they keep on saying us is the starting market for this kind of solutions and everything else.”

But Matteo saw something others missed: Europe’s regulatory environment was creating more sophisticated fraud challenges than the US market. “For the kind of decisions that European Central Bank and the financial institutions have taken in Europe, in the European Union during the past years, frauds and attacks in this specific area have been more complex and more advanced in Europe than in the United States.”

This regulatory complexity became Cleafy’s proving ground. European regulations around instant payments and open banking forced them to develop more robust solutions. While competitors focused on the larger US market, Cleafy built deeper expertise handling advanced threats.

The strategy paid off. Today, as similar regulatory requirements emerge in the US market, Cleafy finds itself uniquely positioned. “The wave that has been introduced in Europe following compliance on instant payment and PST two to our compliance related to open banking are coming to us and we are in a very good competitive position compared to other solutions that are in place and new startups that right now are starting growing up in the US.”

Their focus on Europe also shaped their product development approach. Rather than expanding their consultancy footprint, they maintained “a very sharp focus on the product and automation and having everything in place in order to have the system doing things, avoiding to have people entering into the loop from our side to manage by hand the decisions or events.”

This emphasis on automation proved crucial for scalability. While competitors built services-heavy businesses to handle less sophisticated threats, Cleafy developed automated solutions for complex attack scenarios.

Today, Cleafy targets “mid large banks and financial institutions” and Fortune 500 customers, along with “all the startups and fintechs that are in an advanced growth phase.” Their European-first strategy gave them the expertise and credibility to serve these demanding clients.

The lesson? Sometimes the largest market isn’t the best starting point. By choosing a smaller but more complex market, companies can build deeper expertise and stronger solutions – creating lasting competitive advantages when they do expand globally.