The following interview is a conversation we had with Ron Benegbi, CEO & Founder at Uplinq, on our podcast Category Visionaries. You can view the full episode here: Over $5 Million Raised to Transform SMB Lender’s Existing Credit Evaluation Process.
Ron Benegbi
Hey, thanks for having me Brett. Excited to be here.
Brett
Yeah, no problem. So before we begin talking about what you’re building there, could we just start with a quick summary of who you are and a bit more about your background?
Ron Benegbi
Yeah. So I’m a serial entrepreneur, this is my fifth and as I’ve been told, it’s my last startup. I’ve had a couple of exits, successful ones. I’ve also had a horrific swap. So by no means am I perfect in any way. And like I said, Uplinq is my fifth startup and my most passionate to date. And hopefully we’re going to be able to impact the lives of many around the world with it.
Brett
Well hey, we have to zoom in there on the flop. So tell us about it, what went wrong there and what did you learn from that?
Ron Benegbi
Yeah, that was really interesting. It had come right after a very successful twelve year run where me and my partner at the time, we literally built a business from nothing, didn’t raise any money and just did it organically over that time. So I came out of that, I would tell you, probably feeling a little too good about myself, like a little cocky, little arrogant, made some mistakes with that sort of mindset. And the biggest mistake I would tell you I made was were building a SaaS tech platform and I had partnered with a company out of the UK for a tech stack and I ended up cutting a deal with them that was incredibly favorable for me and the company and it was just so heavily one sided. And what that did was this was I guess 2010, 2011, it was really taxing on them financially and it was still in that period of the financial crisis, certainly in Europe, they were based in the UK and they became insolvent.
Ron Benegbi
And what I realized and it ended up costing us the business, we closed it down. It was such a one sided deal that creating such a one sided deal where there’s a clear winner and loser ultimately creates a lose, not a win lose and certainly not a win. So lesson learned. I’ve tried to kind of take that mentality going forward. So today when I negotiate with suppliers and they’ll give me a quote on something, at times, I might even increase it, because if both parties don’t win, then ultimately both parties lose. So I’d say those were my biggest takeaways.
Brett
Nice. And I love that. On my end, when I work with companies and we’re going through the negotiations, when they start to just grind us down lower and lower, it just creates a lot of resentment. And on my end, I just think this isn’t a good way to start a relationship. We’re going to start off on the wrong foot, for sure. So very interesting that you have that perspective and that experience as well.
Ron Benegbi
Yeah, for sure.
Brett
Now, also, something I’d read in a previous interview is that you were an immigrant. So do you want to talk us through maybe some of that journey and what that was like for you growing up?
Ron Benegbi
Yeah, no. So I am an immigrant. My family migrated to Canada in the early 70s. We were poor. Like, we had $0. My dad was baking bread at night to put food on the table, and he went to a bank in 1973. And Brett, by the way, I know it’s hard to believe because I look very young. I appreciate you acknowledging that, by the way. So he went to the bank in 73 and he asked him for a small business loan, to which the banker told him, mr. Benagar, you really don’t qualify for how the bank lends the small business. However, I believe in people, and here’s $5,000. And my dad was able to take that money in 1973, start a small business, which then became a medium sized business. And my mom actually followed suit about a year later, just knocking on people’s doors.
Ron Benegbi
And the winter of 74 in Toronto. And I can tell you, that’s not a pretty picture, and asking people, do you want to sell your home? And she built a nice, healthy real estate services business out of that small business. So, for me, small business is very personal and it really ties back to my immigrant roots and how I manage businesses and how I work for businesses. My successes and my failures have come as a small business owner, which really ties incredibly well to Uplinq and our mission and what we’re all about and what we’re trying to do in terms of impacting the lives of small businesses globally.
Brett
That’s amazing. And we’re going to dive deeper into Uplinq here in a moment, but a couple of quick questions that we like to ask just to better understand what makes you tick. First one, what CEO do you admire the most and what do you admire about them?
Ron Benegbi
Yeah, so I don’t think I’m overly creative there. I’m going to tell you it’s Steve Jobs, so you’re probably rolling your eyes on me on that one. But I followed him for years and years, and I guess not a millennial here, so it’s been a few years. And what I really admired about him was I remember it’s when he launched the I think it was the iPad, and he said something like, if you give this tech to a ten year old child and you don’t say anything, and you let the child just play around with it and intuitively it makes sense to the child at that point. I know I have magic. I know I’ve done something special. And for me, that sort of really embodied how I wanted to build a company and especially build product within a company in terms of just keeping it as simple as possible.
Ron Benegbi
Where whether you’re a ten year old child, an 80 year old in the latter part of your life or sort of in the middle of your life, you could understand how to use a product at its basic course. So that’s what I’ll share with you. It is Steve Jobs. So I’m sure you get that answer a lot, but I’m answering as truthful as I can.
Brett
Yeah, I’d rather someone answer churchly than just, like, make up some random local CEO that I haven’t heard of. So no worries at all. We’ve have bird Steve Jobs a few times.
Ron Benegbi
I’m sure you have.
Brett
We’re talking about books. I’m not going to let you say the Steve Jobs book here. What book is of the greatest impact on you? And this can be a business book or just a book that really influenced how you view the world from a personal perspective.
Ron Benegbi
That’s a great question for me. What jumps off the table when you ask that question? Brett is a book that came out in the early 2000s called Good to Great from Jim Collins. And I don’t know if you know that one. For me, it talks about just a certain kind of leadership, and it’s a leadership candidly that I aspire to attain. I don’t think I’m there, and I often just refer back to it and read up on it. But I love about how Mr. Collins talks about it’s not just about bringing in the right people and creating the right culture, but it’s also ensuring that they’re in the right roles to ultimately garner success for the company and was written before the financial crisis. So it’s interesting reading that book now when they’re talking about all of these businesses that some of them didn’t make it past 2007, 2008.
Ron Benegbi
But whether it’s specifically a company or not, it’s just the ideology behind it and the messaging behind it is something for me that’s extremely inspirational and aspirational. And it’s something that as CEO of Uplinq, I’m trying to get you every day, and hopefully when this is done, I’ll be told that, hey, yeah, I got there, or at least I did my best.
Brett
Nice. I love that. Such a good, classic business book as well. And I think that’s a perfect segue for us to now talk about Uplinq, so I think we covered there. It sounds like the early origin story of where this desire to serve small businesses came from. But take us back to the early days as you started to think through what this company would look like and what the product would look like and how you would bring it to market.
Ron Benegbi
Yeah, so it goes back to if we look at small businesses in general, let’s look at them. The mom and pop shop at the corner of Maine and Fort. Small business has always been an underserved segment within financial services. Nobody would argue or challenge you on that, at least no one’s ever done that with me to date. And it’s always been difficult for a small business owner to get a fair shake. But over the last few years, with the impact the Pandemic has had and the devastation it’s had on the small business owner and now as we go into these uncertain economic times and conditions, the opportunity for a small business owner to get access to fair and ethical credit has never been more difficult. So for us, for me, it all started with that vision in 2021, early 21 was, how can I convince a small business lender to say yes more often than they’re saying no?
Ron Benegbi
So not asking them to change the way they think about credit, not asking them to change the way they think about risk, because doing any of that creates a lot of friction and that’s definitely not a good thing. But showing them through data, through science, by providing them with empirical evidence, showing them, hey, this business that you said no to, you actually should have said yes within the context of your existing credit environment and this is why. And then getting them to apply that’s sort of the background and the vision behind Uplinq. And I was very fortunate to having been introduced to my Co-Founder and were able to deliver such a solution accordingly. And could you talk us through how.
Brett
Your credit assessments work and how they’re different and how they’re able to generate a different answer to that loan question of do we lend or do we not lend? What’s happening behind the scenes and what types of data are you looking at to make that determination or that recommendation?
Ron Benegbi
Yeah, so it’s a bit of an unusual story and I’m not going to use the word unique because brat, all startups are unique and we’re all special and we should all be given some credit because we’re a startup. But it is an unusual story. And what I mean by that is you don’t have two guys here who have spent the last two years in a basement building a product that they think makes sense for the market, raising some money now, going to the market with this incredibly new product for the market and claiming for it to be so great. In fact, you have the opposite of that. So if you look at the way lenders have traditionally lent and when I say lenders, small business lenders think a bank, a credit union, an online lender, they’ve typically asked the small business owner, give me three years financials.
Ron Benegbi
So give me your financial statements and let me run a bureau score on you, and then I’m going to aggregate all of that information and make a credit decision. Well, we live in a different world today than we did even three years ago. And most small businesses today, certainly in the US. Do they even have three years financials? And if they do, are they accurate? Do they have a great credit score? So going back to your question, what is it that we do? Well, we go beyond just traditional financial bank statements and credit bureaus, which, by the way, I’m not discounting. They provide value. But we look at the entire ecosystem around the small business. So we look at environmental information, we look at market information, we look at community information. We look at things like if you’re a restaurant, what kind of foot traffic are you getting not just across your street, but two blocks down?
Ron Benegbi
What kind of cell phone usage is going on in your area? Because that has a direct correlation to financial performance. And going back to why is this such an unusual approach? Because, candidly, there have been a lot of companies in the past that have used what we call alternative data to evaluate credit. So what makes this an unusual story is it’s not something that’s been built over two years. In fact, it’s the opposite. We have taken a technology that had been in market for over 15 years, served some of the biggest and smallest financial institutions in the world. Small business lenders have produced data sets that have met every regulatory requirement in that local region, has connectivity to over 10,000 sources of data on small businesses in 150 countries, and in the aggregate has been a part of over $1.4 trillion in lending underwriting. And we’ve been repurposing this sort of older legacy technology into this modern day fintech called Uplinq.
Ron Benegbi
And the narrative is something that, like I said, is unusual. So when you talk about a company that’s less than two years old but yet has this story and more importantly, has the science and data to support the story, it becomes quite compelling and has really resonated with the market at such an early stage for us.
Brett
And how did that work then, exactly? Did you buy that technology? Was that a buyout of an existing company or are you building on top of another company?
Ron Benegbi
Great question. Yeah, no, it was definitely a purchase. So what we did was my Co-Founder had built this platform over a 16 year window. We simply carved out the technology. We put it into a new company called Nuco. Look how creative. I was rebranded to Uplinq and Uplinq acquired the asset. So we didn’t buy my co-founders previous company, so we didn’t buy, like, contracts and any of that other stuff. We simply bought technology rebranded under Uplinq. Uplinq now owns the technology, has all the rights to it, and accordingly, all of the data that comes with that. And we’ve been able to go to market accordingly. And that’s why it’s a bit of an unusual story.
Brett
No, that’s super interesting. And the 1.4 trillion that was over that 15 year period, right. I’m guessing that’s not two years.
Ron Benegbi
No, there’s no way. And that’s why when people say, I don’t understand you’re, like, two year startup, 1.4 trillion, 10,000 data sources, it doesn’t match. Of course not. One of the things that it got me so excited when I originally started talking to Pat, my Co-Founder, was I said to myself, oh, my God, for me to even to try to replicate what is in front of me here, what he’s done, this would take at least ten years. This isn’t something that I could just throw money at and two years later be in market with something. So, yeah, no, it’s been done over 15 years and it’s been tested, validated, approved by banking regulators, not just in the US and Canada, but all over the world in the different markets it’s served. So it’s quite a powerful narrative.
Brett
That makes a lot more sense now. When I was doing research yesterday, I was like, well, a two year old startup, they have Wells Fargo, Chase, Citibank, every bank you can think of. I had a lot of questions about what you were able to do in that two years.
Ron Benegbi
And there’s no chance on there. If anyone told you they’re doing this in two or even five years, Brett, I would say they’re not being truthful with you. Now, this was done over 15 years. It wasn’t done overnight. There was a lot of sweat poured into it, a lot of dollars poured into it. And accordingly, that’s why we’ve had the kind of excitement in the market where we’ve partnered with the likes of Equifax in creating an innovation lab soon out of the gate. They never do that with early state startups. And I can give you more and more stories like that, but because we have the science over such an extended period of time and the data behind it has really resonated with the market as a whole.
Brett
Yeah, I can see that. This is just so different from that typical Silicon Valley story, right, of 220 year old Stanford dropout have an idea for a problem they can solve and go get rich from. So this sounds like a very different story.
Ron Benegbi
Completely different. You’re talking about a couple of old dudes who have taken a legacy technology and are bringing it to market under a new brand. So, like I said, it’s a highly unusual store.
Brett
Yeah. Makes a lot of sense. This show is brought to you by Front Lines Media Podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you’re a Founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host, and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io podcast. Now back today’s episode. Now talk to me about country to country. So I can see how the US. And Canada are probably pretty similar, but what about when you go into other countries like Europe or Africa or South America? How does your algorithm and scoring have to adapt on a country by country basis? Or does it not have to adapt?
Ron Benegbi
Well, the answer is absolutely it has to adapt. But again, if you look at the technology itself, remember, over 15 years, connectivity into over 10,000 different data sources, it has powered program in just about every Western economy you can think of. So one of our initial beta customers not paid, we did five closed sort of beta projects. Four were in the US. But one was india. We actually have more data india than the government of India, and were able to show it to the customer. And again, that’s because it’s been done in the past over a period of time. And of course, the data where we pull from, how we pull the markets are incredibly unique to that local region. So, of course, having a restaurant in Mumbai, the data is going to look a lot different than having a restaurant in Manhattan or San Francisco.
Ron Benegbi
So, absolutely it attenuates to the local market. But interestingly enough, part of what we pull in any local environment is international data. So we’re pulling sources from like the World Bank, the IFC, the International Finance Committee, like all of these sort of global market indexes, because all of that impacts local environment. I e. The war in Eastern Europe certainly impacts my local mom and pop shop here in downtown Toronto, or can impact it with respect to supply chain and goods and logistics and all of that stuff. So it’s both local sources, international sources, but clearly attenuated to that very specific region. To your point, and what is the.
Brett
Competitive landscape look like today? I’m guessing it’s divided into two buckets of the legacy providers or kind of the status quo there and then the upstarts or maybe the disruptors who are trying to come in. So can you just talk us through what that landscape looks like?
Ron Benegbi
Yeah, I would actually break it down into kind of two buckets. The first bucket is status quo. So what does that mean? Well, let’s look at our customers. Are these small business lenders, so banks, credit unions, et cetera. They’ve been using FICO scores, they’ve been using Experience scores or Moody scores. So they just want to keep doing the same thing they’ve been doing since the dawn of age and they don’t want to do anything else. So that’s kind of the first competitive landscape. Is that status quo? The second part to that is I wouldn’t say so much new entrants because the barrier to entry is enormous, right? Like it’s not something you can just go raise a million dollars and build in two years like you and I have already discussed. But what you’ve seen is you’ve seen companies who have been at it for some time, who are starting to make some headway, who narratives are a little similar to ours, and certainly there’s a couple of those out there as well.
Ron Benegbi
And I would tell you that’s a good thing because at the end of the day, I support them and I hope they do well and I hope they feel the same way about us because at the end of the day, it’s the status quo that’s the biggest thorn in my side, Brett. It’s getting a lender to think differently while staying within their own credit environment. So I’ll give you an example. One of our tests we did with an online lender, actually, San Diego based, maybe that’s why San Diego is always in my mind. And they were on average declining 95% of all their loan applicants. And basically after I think we did it, just about four months, just under four months, were able to show them within the context of their existing credit process and credit workflows and how they thought about risk in general.
Ron Benegbi
They were able to go from basically a 95% decline rate to a 60% to 70% approval rate, which is the exact same credit framework. So all of a sudden, if this one lender is able to now say, hey, you know what, all of these declines, I should have said yes to a good majority of them. You’re now getting working capital into the hands of the local mom and pop shop at Main and Fourth Street, and you’re contributing to the economy both locally, nationally, and inherently globally. So for me, and I’m not sure if any of the competitors would agree, but the status quo is the biggest barrier, the biggest competitive barrier we have while we’re speaking to a potential customer.
Brett
Yeah, and something you mentioned there is you have to convince these large institutions to think differently. How do you do that? How do you convince an organization to think in a different way if that’s what they’ve been doing for a very long time? Because you have to essentially come in and say, I guess in a nice way, you’re wrong. Here’s a better way to do it. But how do you communicate that without insulting them and scaring them off?
Ron Benegbi
Well, yeah, no, that’s a great question. I mean, inherently, some you can’t convince, but what we’ve seen is it appears to be that it’s the right market, the right time today for a number of reasons. One. There are all kinds of regulatory requirements coming down the pipe, specifically with a section. It’s called 1071 frank, where the regulator is now as of next month going to be asking any regulated lender in the US to prove to them that the way they lend to small business is without bias and they are conforming to fair lending practices. Well I can tell you that just about every FY I’ve spoken to and there’s conferences all the time they’re petrified about this because they know that their models don’t conform. So certainly that has played a role. But another part to this is we’re working with a fair large bank right now where the business line has come and said look we are under tremendous pressure all the way up to the CEO level to grow our business book.
Ron Benegbi
However we are not allowed to change our risk models so how are we going to grow? So you’re telling us to grow a business but you can’t take more risk. So this is where a solution like ours comes in and says look you don’t have to take more risk. In fact we can lower your charge off rates. But here is evidence through the use of data, through the use of all of these insights we’ve derived over 15 years, not over two years, over 15 years to convince you why you should have said yes more often. It allows them to increase their loan book. So we’re seeing the market getting really excited about this. That’s not to say that everyone we speak to says where do I sign? I don’t want to mislead in any way but I will tell you this. I’ve been selling to FIS for over 25 years and I’ve never seen some FIS and I mean some large FIS move as quickly as they’ve moved with us and get as excited about some of the things that we’re talking about the way they have in such a short amount of time.
Ron Benegbi
So I hope I’ve answered your question. It’s not a one size fits all for sure but it appears to be the right solution at the right time.
Brett
Makes a lot of sense. I guess there has to be a pretty big incentive there too right? Like banks want to lend. That’s how they make money. They just have to do it safely so they get their money back and are able to charge the interest. So they have an incentive to really explore technologies that enable them to lend more. Right?
Ron Benegbi
And with our model do you know what we do, Brett? We actually say to a lender, listen this is something my Co-Founder says I don’t say this. He actually said this on stage at Innovate in New York in the fall. I was like starting to sweat when he said this. He will say in front of the CEO of a small business banking division of a bank. Don’t believe anything we say. Don’t believe any fintech. All fintechs are liars. And I’m, like, sitting there sweating as he’s talking like this. It’s like, okay, I know your point. We get your point. But I mean, that’s being a little sort of aggressive. The point we’re trying to make is we go into a potential customer and we say, look, let us prove it to you. Everybody knocks on your door and tells you what they’ve done is the best look.
Ron Benegbi
Don’t believe us, but let us prove it to it. Let us do a proof of concept, a back test. Let us take information. Let us go back three years, five years. Give us all of the declines that you’ve had. Let us show you how we would have assessed those declines, and let us prove to you that this works. And in doing so, we will also come back with a very comprehensive business case, which can go all the way up to your CEO, which will show you how you’re going to ultimately significantly increase your net revenue. There’s all kinds of complicated formulas that go into that, but that’s the approach we take. And when these banks hear that, they’re saying, hey, wait a second. So it’s like a try before you buy. That’s what it is. It’s like, yeah, where do we sign? Sounds great.
Brett
Wow, that’s awesome. I’m sure you’re very popular than at the conference of a bunch of other fintech companies, as you were saying that.
Ron Benegbi
All fintechs are special, Brett. All special.
Brett
Now, I’m sure in your journey you’ve encountered a couple of challenges. If we had to pick one that you faced and then overcame, what would that challenge be and how’d you overcome it?
Ron Benegbi
Yeah, I would tell you that this one also jumps off the page. Without question. It was team. It was team. It was the initial founding team. Now, when I originally raised some money, were like, beyond pre revenue. We had a PowerPoint slide deck, and it was bad. That’s what we had. That’s all I had, PowerPoint deck, and it was bad. And I didn’t really have my Co-Founder wasn’t around at that time. He came shortly thereafter. I was part of the journey. So basically, over a period of, I would say the first twelve to 18 months, it wasn’t just about bringing in the right Co-Founder, which I’m convinced I did, but it was also adding to that team in product and tech, as you know, and building it out. And that was a struggle. Made some mistakes. Not with the Co-Founder, thankfully, but in terms of other tech hires and in terms of some consultants.
Ron Benegbi
Spent some money, lost some money, I would say wasted some money. Not purposely, of course, but learned along the way. And I would tell you that it was really tough. And our biggest investor. At the time, not any longer, but they believed in me from day one is a funded in New York City and they said, look, we wrote the initial check, but we’re not going to write another check until you can prove to us that you can bring this team together. And thankfully, I would tell you, for the last eight months or so, ten months even, we have what I consider to be an incredibly stable environment where the team has just come together, gelled and really meshed as this cohesive unit. And it enables me now to focus in other parts of the business, not just on building out the right team.
Brett
And let’s zoom out into the future. So let’s go to three years from today. What’s the company look like and what’s the impact you’ve had both for the financial institutions that you work with and of course the SMB businesses that you’re targeting?
Ron Benegbi
Yeah, I’ll tell you, just simply stated, if three years from now, I’m not the CEO of this company and this company has not just succeeded, but we bring in a new CEO and she or he is able to accelerate it even further and the company just keeps going. To me, that’s success and that goes back to good, to great. If this company can sustain itself on its own without any one individual and certainly me as a CEO, then we’ve achieved our goal. In terms of how do you quantify I’m not going to throw a number like we have 27 bank customers and we’re generating $100 billion a year in annual revenue. To me, if we’re able to show conclusively that we have positively impacted the lives of millions of families around the world and whatever that means, and I don’t know what that means today, Brett, I’ll probably know better what that means down the road.
Ron Benegbi
Then to me, coupled with what I said earlier, that would be success.
Brett
Amazing. I love it. Ron, I’d love to keep you on and ask you another 20 or 30 questions here, but I know we are a fun time, so we’re going to have to wrap here before we do. If people want to follow along with your journey as you continue to build, where’s the best place for them to go?
Ron Benegbi
Yeah. uplinq.co. They can also follow us on LinkedIn. They can reach out to me on LinkedIn. I’m a LinkedIn troll and I am the only Ron Benegbi in the world on LinkedIn. If you put in Ron Benegbi, it’s only me. So I’m pretty easy to find that way, as long as you know how to spell my name. Awesome.
Brett
Well, we’ll have that spelling right here on the show, notes of the episode and in the Idle, so they’ll be able to find it. Ron, thank you so much for taking the time to share your story and talk about what you’re building and this vision, this is all super exciting and look forward to seeing you execute on this vision.
Ron Benegbi
Thanks so much, Brett. I appreciate your time.
Brett
All right, keep in touch.