What CFOs Actually Want from Stablecoin Rails (Velocity, $10M Pre-Seed)

Eric, what's up, man? Thanks for joining. Thanks for having me. Good to see you guys. Awesome. So we we we were talking earlier, and it's just we I said, man, you don't leave nine years at a company like Worldplay without some some serious conviction in where this payment space are going. So maybe for the people that haven't heard, I know it's it sounds like it's been a busy last six to eight months at Velocity, a few fundraisers.

So bring us kind of into where you were at, what you did at Worldpay, and, what what built up your conviction to to go and exit stealth and launch Velocity? Yeah. It's a good question. Nine years was a long time. Never thought I would stay nine years at the company. Now I hope I make it nine years at Velocity, but, yeah, it's, it's funny. I think over that nine years, there was, like, multiple phases of of the evolution of payments. When I joined, the company was actually called Vantiv.

It was like the sleepy little Cincinnati, Ohio based payments company who had very quietly become the largest merchant acquirer in the world. Within a year, we bought Worldpay. We combined the businesses. We renamed the company Worldpay, and we were kind of immediately thrust into, you know, what was the largest the the seat is the largest acquirer in the world. And so I'd say Worldpay was kind of on top.

You know, the likes of of Stripe and Adyen were, you know, well on their way to building phenomenal businesses, but the world hadn't, I think, kind of recognized the trajectory that those companies would be on and and kind of a threat that some of the the more legacy players might experience over time.

As for the kind of the end of that ten year, which ended in in us selling the business to, or spinning it off to a private equity firm in a in a take private transaction, which for me, I think, was was you know, it was kinda difficult to see. Right? Like, you you you're part of this company. You'd, like, pour your your life into it for a long period of time.

And, you know, the ending of it well was a good outcome for the financial sponsor and the private equity firm was a little bit of of kind of falling off this this stage of what was, you know, once the biggest and, you know, kind of known as is the the the best payments company in the market. I think that moment in time was really a sign of that. Eric? How long ago was that? That wasn't long ago. Right?

So, you know, Worldpay sold to FIS in 2019, and it was a difficult couple of years coupled with COVID and some of the impact of just kind of what was happening in my career in the market. And the spin off was announced in twenty third or, excuse me, 2023 and then took place in 2024. And by 2024, you know, close to 25,000,000,000 of value had been destroyed from that acquisition from when FIS bought Worldpay in 2019.

The business transacted for $43,000,000,000, in in 2019, and there was, you know, obviously, this long period of time where the market dynamics changed so much and really investor confidence and what the value of the asset was changed. And I think for me, what that underpin was, like, the payments world was changing. And I think what you saw is, you know, players like Stripe and Toast and, you know, even Square to an extent really taking huge amounts of market share and and outperforming some of the legacy players.

And so my thought very much went to, like, well, what's the next evolution of this? Like, where do we go next? And it it really came at a time that stablecoins were becoming recognized and trusted. Certainly, you know, the early success of of folks like Bridge really started to build momentum in the market that, hey. There's really something here. But for me, it was an opportunity that I saw to actually redefine the back end of payments.

I saw all this capital flow into the front end and gorgeous APIs and fraud and risk tooling and all these things that you see and hear about, which are really at the heart of consumer experiences. But no one was talking about what happens on the back end. And, you know, having lived it from the inside, what I realized is incredibly complicated, tons of issues, lots of mistakes, very costly, and no one had rewired that world.

And I think everyone just realized the banking infrastructure that existed was too complicated to to make it any better. So no one built any purpose built tech. Then you enter stable coins into the conversation, and what you realize is you now have this entire new medium or platform to build off and enhance everything that's happening on the back end.

And so what I got really excited about was probably less of what was gonna happen on the front end of payments and what consumers would experience and much more on the back end. Talk about a little bit more about, like, purpose built tech. Because, you know, we're obviously in the media space. We're we're knee we're niche media. You call it, like, we're purpose built media. I mean, mean, honestly, though, that that's where we're seeing all these breadth of entrepreneurial

entrepreneurship mouthful. Start to go where it's like, hey. Don't, you know, go deep and narrow versus, you know, wide and shallow. We're even seeing this with blockchains and, you know, canceling and picking, you know, maybe privacy and institutional lane, and then you see the tempos and the staples of the world. You're very clear. Like, you you go on your website, says built for CFOs.

What what does it mean for you to be purpose built, and how does that influence maybe, like, your product road map, go to market motion, and and the people you try to speak to and reach? Yeah. It's a great it's a great question. Coming from an organization of, you know, one of the time at the peak with FIS with 75,000

people to starting an organization, you know, with a handful of summer room, you realize very quickly you can't be everything to all people, and you really have to be thoughtful about where you think you can gain early traction, and certainly how you wanna differentiate the market. I think for us, what we realized was nobody had yet thought about what a CFO or treasurer would really care about if they did decide to come on chain.

And what we learned from talking to we had phenomenal group of advisers, you know, including the former treasurer of of Stripe and folks who really, really have seen this from lots of different angles, but also have peer groups around the world who kind of, you know, been talking about this for years in terms of, hey. What's the stablecoin thing? Is it really a treasury play? How do we think about it? And what we learned from that was there was there was at least three things that just didn't exist.

Number one was nobody actually understood when a treasurer or a CFO decides to change the way they they manage payables and receivables or the way they manage their liquidity. All of this lives in a system today. It's not just happening in spreadsheets. Like, these are big organizations who sometimes have tens of thousands of bank accounts, and just introducing stable coins in the environment without thinking about the operational complexity that that would pose is just a massive miss.

And I think we're so early still in figuring out how does that world move into and and support or interact with the way they they they manage their Fiat operations today. But, like, that's a huge mess and still kind of nonexistent, and we've been very focused on that. So I think that's number one. I think number two is, you know, the question for CFOs has always been, okay. I bank with a g sip today or I bank with a super regional bank. I get what I think is decent FX pricing. Yes.

The money moves slow, you you know, know, average kind of cross border movements are two to three days. Like, can you beat that? Right? Do you have a solution? Clearly, you could beat that from a timing perspective. But, you know, when I look at it end to end, is the solution actually better? And I think in order to get there, you have to do a bunch of things differently differently than the tech that was built to serve trading platforms as an example. Right?

Like, you need a ton of local currencies, which means you need both bank accounts that interact with the local payment rails. You also then need the ability to access liquidity. So I need lots of sources of liquidity. I need to be able to split orders across multiple venues. I need to be able to do off chain FX or synthetic swaps if needed in order to find that depth of liquidity. Because we're not talking about, you know, tens of thousands or a couple million bucks. Right?

Like, the volumes here become very quickly very quick and very meaningful. And so that's like the second is, can you do it at scale? And can you do it for a business who is today banking with, you know, someone who's who's, you know, got effectively unlimited access to to capital? And then I think the I think the third piece was, like, how do you make it easy? Right?

Because everybody would love to, I think, get the gains of stable coins, but nobody wants to go, like, procure a wallet vendor and source their own liquidity and figure out the risk and compliance complexity. And so, like, what is the easy button that looks like for a CFO in the same way that you'd effectively sell them kind of a consulting package that says, like, hey. Look. Here's what it looks like to come on chain. Here's the five easy steps.

Here's, you know, here's how you can get up and running in a couple of days, and then eventually build in the APIs and integrate the back end. And so, like, those three things just didn't exist in the world. It was all too complicated. And so what we're trying to do, you know, no pun intended, is bridge those worlds, right, between

a boring kind of trad five business or, you know, someone who really likes the idea of using stablecoins, but just has no clue how to get started. Yeah. As sorry, Drew. I'm dominating the questions here. So Oh, we're good. Take the we're good. Let's take the next one. I'm thinking about, like, total like, say this respectfully, like, total total boomer, like, has been a CFO for, you know, thirty years. Right? And has and you go think back to being a CFO in the nineties.

Like, how drastically different you went through this this Internet boom. Have you ever have you got to sit down with anybody like that and, like, you let them go hands on with Velocity and they're just like, woah. Like, this is what I've been missing out on? People like us love to adopt new software, I think. That's like the their their

thing to do. New things, new systems of doing things. Yeah. What's happened like that? I mean, every conversation starts with, you know, the guy sitting back with, you know, he's got he's got his pull on for me. I'm so tired to have to have this conversation. Yeah. It's like, son, I've been the CFO here longer than you've been alive. And it's like, look, I don't understand how you could do any better than what we're doing today. Right? Because everybody thinks they built the best fly trap. Right?

And so what I typically start with is just a series of questions. Say, look, let me help you understand. You're probably right. There's probably nothing here, but let's just appease me for a second. Let me ask you a couple questions. Number one, when you guys are thinking about capital management, are there any instances in your business today where you do any sort of prefunding? Maybe you take a short time credit line from a local bank. Just for any reason, is there any? No. I manage my capital so efficiently.

Actually, there's this one use case where I really struggle to get out of Filipino peso, and so I actually preposition $6,000,000 a day. And so, like, the series of questions just start to unravel all of these things that actually they've known about, but they've realized are really tough to solve in kind of the fiat world. And so they've kinda given up on them, but they're always in the back of their mind. And every single one of those conversations has has left with a, hey, there might be one use case.

Maybe we go try this one thing, and if you could really prove out this one little use case, then, you know, maybe there's more we could do together. It inevitably always turns from it. I'm not interested. I've built the perfect fly trap to, hey, maybe there's something here. And, oh, by the way, I never get to champion cool things, so I'm gonna be the champion in the face of this, and they there's almost like a turning point of excitement. Right?

Because they've never brought anything to the org recently that's, like, interesting. Like, oh, I just refinanced the debt. Awesome. Cool. Well, I just I just implemented a new TMS. Sounds interesting. Like, there's nothing they've done in their tenure, typically, that's really, like, gotten the organization excited. And this is, like, really kind of, you know, forward leaning and interesting. Right? Yeah. Yeah.

It's I was I'm looking at your background here, and I personally just as someone on growth, go to market, like, that's how I think about things. I love that approach of just, like, find the simplest,

most straightforward. Something I struggle with, I think, is I probably over like, I get too far ahead of myself sometimes of, like, what is possible and what could be done. And I love how you just you find one thing and you just keep it simple and get on base. What has that been like? Just in your background, it looks like you've you've had a lot of, you know, growth focused roles, head of strategy, go to market.

Maybe speak a little bit about your your go to market hat, like, your go to market hat on and maybe some of the key playbooks that you're bringing into velocity from a a go to market standpoint for getting on base with with some of these some of these types of people, and what you're what you're seeing maybe you're doing differently than others that Yeah. Is working. Yeah. I mean, think as a whole, like, the superpower of our organization is we understand the way payments

work today at a level of detail that I think very few do in the world. Very quickly, we're able to triangulate, like, where the issues could be and go very deep on the way the flow works, the system it connects to, the the likely way they're receiving FX rates, and kind of start to poke holes in and and understand the current situation. And so I think that's played a huge role in our go to market. I think second is, for me, I love the you know, my team, you know, often jokes that a bit like a a truffle pig.

Like, I just love, you know, getting in front of someone who, you know, tells me there's no opportunity and just, you know, keep peeling that onion and figuring out, like, where where where is that they're there. So I think, you know, what I learned very early in my tenure at McKinsey is, like, you're putting the situations at companies that you know nothing about other than the 10 k you read.

And by the way, AI didn't exist, and so, like, it was it was a lot of, like, heavy lifting to try to figure out what a company was doing. But if you ask really good questions, you could gain credibility super quickly. And so it was not about what you knew. It was about the questions you were asking. And so I think we try to employ that in our go to market, which is it's all about the types of questions you ask to understand how you can deliver better payments and treasury experiences for for these businesses.

And, you know, I think we've honed that we've honed that really well. Like, we rarely ever walk into a I don't know if ever. Right? We walk into a conversation and say, well, let's pull up the deck and let me tell you what we can do for you. It's very much about, like, look, we're we're trying to solve problems for charging CFOs. These are typically the problems we have. Like, help us understand the problems you have and what you're facing today.

And so it's a very consultative, experience to the extent where, you know, some of our large investors have even said, look, you're spending so much time with these large companies. You should be charging them consulting fees. Have you you need to go tell this company that, like, the twelve hours you spent last month with them is actually gonna be billable, and you're gonna send them a bill because you're teaching them how to come on chain. Right? And so You guys got it. Like, this is enterprise sales.

Like, what are you talking about? Yeah. Exactly. Exactly. So we we've tested that. We've tested the waters on that a little bit, and you'd be surprised actually People really do value

what what what we have to say. So maybe we'll get a we'll slip a few of those contracts in at some point. Yeah. I wanted to so you mentioned prefunding. So, like, we're on on this topic of, like, that specific question you already shared around positioning the problem or pain around prefunding. What other core discovery questions do you ask, and what are some of these other pain points that you kinda have in your back pocket as you approach maybe these discovery calls? Yeah.

I think there's three there's generally kind of three big buckets. I think number one is prefunding. Why are prefunding? Why? And and where is an opportunity to eliminate

or or tighten settlement timelines in order to eliminate that that prefunding need? I think number two is just challenging the way FX works today in their current environment. And I think, you know, there's a great great line that a gentleman on our team says, which is where there's mystery, there's margin. And I think FX for most businesses, even some of the most sophisticated I'm talking like top 10 biggest companies in the world are paying hundreds of millions of dollars a year in FX fees.

And they really think they understand them, but what you realize is like from the time the transaction's authorized till it's settled, the rates moving up and down in in in all different ways, and actually tracking back to what a true baseline is is really complicated.

And so I think a lot of it is once once you get somebody thinking about and working on it and you bring the expertise that we have from the traditional world around FX, and you're able to provide a a baseline or a comp that is challenging the way they've always thought about their FX today, it opens up opportunities. So, like, just complex FX situations are often, you know, a a really great starting point. And I think the third is is just general internal cash management.

What what what I didn't appreciate until I spent time at Worldpay was a lot of companies have thousands or tens of thousands of bank accounts around the world. And getting cash into the right entity to meet your operational needs is actually a lot harder than you realize. Right? And that's why there's a ton of systems and there's a ton of of of cash that's sitting out there idle in the world. There's all sorts of crazy stats on this. Excuse me.

Just in The UK alone, there's a $180,000,000,000 sitting in business banking accounts earning 0% interest or yield. Some of that's because, like, the the businesses aren't sophisticated enough to know how to source that. But a lot of that is just idle cash because they haven't been able to preposition it or get it in the right places at the right time. And so those three kind of core questions are generally what unlocks our ability to to figure out where we can add value on chain.

Can you speak a little bit to what we're seeing here on the screen, this intelligent treasury and and how some of this works while we're looking at this? Yeah. Absolutely. So, you know, the way our platform is built, you know, I would say from a core capability perspective is exactly what you'd expect. Right? We've got all of our own fiat integrations and and networks around the world with banks where we do real time collections.

So, you know, we have the saying internally, if we have to swift the payment, we're not doing it. And I think when you look at the market today, most people are prefunding or swifting a lot of payments that eventually end up on chain. And I think it kind of is prohibited to or counterintuitive to what stablecoins are meant to be, which is real time money movement. You also see people launch platforms and say, oh, we can move money from point a to point b in in less than ten seconds.

Well, yeah, it's it's after you've prefunded the account. So real time money moving on the front end with the bank account, then the actual ability to issue regulated custodial wallets in each market. And we think that lots of businesses who don't have and will never build this wallet infrastructure just want somebody to manage that for them. And so we've been very thoughtful about how we bring the wall of infrastructure into to our business.

And then off the back of that, we've built what we think is a is a pretty incredible piece of technology that allows us to route transactions to different liquidity partners around the world, and to do so in a way that allows us to source liquidity from multiple partners, split transactions, as well as price transactions end to end. So you can tell me any amount you wanna move from one currency to another, and I can guarantee you that rate.

And I can guarantee you that the amount of money that will that I that I told you will will actually land in that account. And that's actually more novel and unique than you would think in the market today.

And it's it's part of how we thought about building the liquidity network that allows us to do that. Really interesting. Zach, I I wanted to before we have to part, my main curiosity at this point is just to better understand some of the infrastructure stack or partners that Velocity might be using for the some of the things you just mentioned. We've spent a lot of our time, Eric, historically in that layer, like, covering a lot of those businesses and and how they work.

It'd be really interesting to hear, like, what pieces of those puzzles you've you've connected on the back end to make some of this work. I think a lot of people that we interview and people who listen to the show are often in the position that you're in, where they're they're maybe thinking through how these things work together. So, yeah, I'd love to hear more around how you've stitched it together. What are some things that you've built in house versus,

you know, partnered? What does that look like? Yeah. Yeah. So the things that that that we partner on, so we partner for walled infrastructure. We're a great relationship with the team at Fireblocks and and a close partner there, but also working with regulated custodians around the world. We partner with a best in class compliance partner. So whether that's AML, KYC, KYC, checks upfront, along with, obviously, on chain, transaction monitoring and travel compliance.

We partner with lots of liquidity partners around the world. So both with issuers for direct minting. I see Agora flashing across the screen here. I give a shout out to Nick and and the team there. We think what Agora is doing is very interesting and very closely aligned to how a treasurer will think about holding value, on chain. There's no world where you could go to a corporate today who's earning the federal funds rate and say, hey.

By the way, you guys wanna move money into this stable coin, which is gonna pay 0% interest or yield. And I know the Clarity Act is creating a lot of ruckus about, you know, that will work in the future, but that's gonna be a nonstarter for for most businesses. And I I think, you know, Agora's approach to, you know, effectively looking and feeling like an asset manager is is the right approach. And so we're we're partnered with them and working closely with them as well as other Mhmm. Other stable coin issuers.

And then I think from a network perspective, you know, we're pretty agnostic today. I think what we're finding is we don't have like, there's there's no one who understands what an l one or l two is well enough to know whether or not they should be requesting that we route their transactions on on one, you know, one network or another. And I think we kinda have this view that, you know, as value comes on chain, there's not enough kinda web three or crypto experience in the world to staff all these companies.

So you're gonna need providers like Velocity who provide it off the shelf and make those decisions on their behalf. And so we think a lot of the power, particularly the economics, could live with players like us in choosing what networks are gonna see volume because these customers aren't gonna be able to do these deals themselves. You do see, obviously, several chains out there doing direct deals with big customers.

But I think, like, you know, Spotify doing a direct deal with Tempo or or someone else is is, you know, probably not the way the world would work. And and you see this as well as card inquiring. Like, Visa and Match Card don't go around the world and do a direct deal with every merchant in the world. They have direct deals with some of the biggest, most important customers in the world, but that makes them a very small percentage of the overall volume that hits their network.

Yeah. It's interesting. We were just reporting on the Lightspark News principal membership that they just got, like, a good example of that, like, bringing those types of things to unlock companies like Rain or Lightspark or others to then bring Visa into their network, but they don't have to go work with all of those teams directly. It's really interesting. I see you guys are gonna be in Miami next week. We'll be there as well. Are you gonna be there on the ground? We'll be there on the ground. Yeah.

We've a party with our friends at Worldpay on Wednesday night, and a bunch of the team will be Right. Will be cruising around. So hopefully, we'll we'll see you guys there. Yeah. I'll shoot you a message. We have some opportunities for, like, interviews, sit down stuff. I'll be there Wednesday actually doing some one on one interviews for our podcast. Maybe we can have you guys on that. That'd be fun. Would love to dive into Nice. More of the the history. That'd be fun. Yeah. Deep dive. Found founder origin story.

Let's do it. Well, cool, man. Love it. Well, thanks for the time. Really, really fun. Thanks for having me. Heard or really done the the research of Velocity, and I'm I'm really excited for what you're building. I I think the perspective you have, the approach you've taken, how you've built it, the background of of you personally, really optimistic for where this could go. So thanks for taking the time. Thanks, guys. See in Miami. Cheers.