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Highlights
The Hidden Cost Draining Enterprise Revenue: Why This Former PayPal Executive Built a $44M Payment Operations Platform
In a recent episode of Category Visionaries, Klas Bäck, CEO and co-founder of Pagos, shared an uncomfortable truth about enterprise payments: Even billion-dollar companies are making critical payment decisions based on incomplete, inaccurate, or outdated data.
“There’s not a single company out there that are selling or billing online that are not finding it challenging to optimize their own payments infrastructure,” Klas explains. “They are leaving money at the table… not selling as much as they could, they are running at a higher cost than they should.”
The Genesis of Pagos
After a decade at Braintree and PayPal, Klas witnessed this problem firsthand. While leading enterprise sales, his team struggled to prove their performance against competitors. “We could not have that conversation with a single one of our largest customers without months of comparing data,” he recalls. “What are you looking at? That data doesn’t look real. Are you sure that’s your right data?”
This experience revealed a stark contrast: Companies that pride themselves on data-driven decision-making were flying blind when it came to payments, one of their largest P&L line items.
Building a New Category
Rather than rushing to market, Pagos took a methodical approach to category creation. They focused exclusively on enterprises doing $50M+ in annual online sales, where the pain of suboptimal payment infrastructure was most acute.
Their early go-to-market strategy prioritized validation over scale. “In the beginning it’s a little bit of a brute force,” Klas shares. “We focus on what we think of as enterprise companies selling and billing online… literally went through every single person that I was connected with on LinkedIn who are a good fit.”
The Unconventional Path to Product-Market Fit
Instead of building a fully automated platform immediately, Pagos started with manual processes. “We can start if you let us send you a file of data once a week and then they became a daily file and then they became a streaming file,” Klas explains. This approach allowed them to validate value while managing development costs.
Their community-building strategy was equally distinctive. Rather than hosting traditional sales events, they organized intimate dinners focused on peer networking. “We have hosted quite a few dinners… it’s not really about meeting us. It’s actually meeting your peers and talking to them is actually valuable for another professional contact.”
Navigating Market Noise
The team quickly discovered traditional B2B marketing tactics weren’t effective for their category. “There is so much more noise out there in the last couple of years than there ever has been,” Klas notes. Even targeted approaches like Google Ads proved challenging: “It was pretty complicated to manage and really see, like if we spend $1, do we get anything back?”
Instead, they focused on building presence in existing industry communities and conferences where their target buyers already gathered. This organic approach helped them expand beyond the U.S., attracting customers across Latin America, Europe, and Asia Pacific without actively pursuing international markets.
The Road Ahead
With $44M in funding, Pagos is now focused on scaling their platform to serve the estimated 100,000 enterprise companies in their core market. Their strategy emphasizes rounding out platform capabilities based on early adopter feedback while maintaining their methodical approach to growth.
The key lesson from Pagos’ journey? Sometimes the biggest opportunity isn’t in building new payment capabilities, but in helping enterprises understand and optimize the ones they already have.
As Klas puts it: “Payments touches everything. Like that is how you get paid. That’s how you can pay your own vendors or employees or make a lot of margins so that your investors are staying happy.” By solving the fundamental challenge of payment data, Pagos is helping enterprises transform this cost center into a strategic advantage.
Actionable
Takeaways
Break into enterprise through brute force outreach:
Bäck leveraged his LinkedIn network to systematically reach out to potential customers, focusing on companies with $50M+ in annual online sales. The key was having enough industry credibility to secure initial conversations.
Adapt your MVP strategy for enterprise:
When building features for early adopters, start with manual processes (like weekly data files) before investing in full automation. This allows you to validate value while managing development costs.
Build community through peer connections:
Rather than focusing on selling, create opportunities for prospects to meet peers facing similar challenges. Bäck found success hosting intimate dinners (10-12 people) where the value came from peer networking rather than vendor pitching.
Embrace imperfect execution:
In startup environments, waiting for perfection can be fatal. Launch quickly, stay close to early customers, communicate transparently about issues, and iterate based on feedback.
Hire for curiosity and action-orientation:
Look for team members who proactively take initiative in group settings and demonstrate genuine curiosity through question-asking. These traits are especially crucial in early-stage startups.
Focus marketing on high-intent channels:
Traditional demand generation tactics like Google Ads may not work well for new categories. Instead, focus on building presence in existing industry communities and conferences where your target buyers already gather.
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