Idiosyncratic Phenomenon #3: Glide
As an early stage seed investor, it’s really hard to approach identifying promising startups just by applying general patterns based on fundamental assessment frameworks typically deployed in business. In an effort to demystify the art of identifying outlier companies at 186 Ventures, we decided to put together an internal framework that focuses on two key components that every breakout startup ends up exhibiting — idiosyncrasy and a clear market phenomenon.
Last year we published our thoughts surrounding the idiosyncratic phenomenon. This is our attempt at 186 Ventures to deconstruct an important part of our assessment approach. It’s important to note that we still apply fundamentals to each startup assessment (e.g. team, market size, differentiation, business model/economics, etc). Down below you can find prior editions we have published on other portfolio companies of ours.
In this series, we will focus mainly on what we find to be both idiosyncratic and a phenomenon. This third article is based on Glide. We were Glide’s second largest VC partner in their Fall 2021 seed round and have had the privilege of developing a close relationship with the founders in what has been the quintessential startup roller coaster over the last three years. The idiosyncratic phenomenon was and in some ways continues to be incredibly non-obvious. The founders, Gautam Ajjarapu, Vishnu Chakroborty, and Sameer Kapur are not the operators you would expect to bring world class, unparalleled enterprise grade infrastructure to the much overlooked market of credit unions (CUs) and community banks (CBs). After seeing how they build the product, develop relationships with customers, utilize creativity to break down barriers, and the intensity at which they approach building the business, it has become unequivocally obvious why they are behind one of the fastest growing, under the radar FinTechs in the U.S. As of today, the company is on pace to continue to grow well into seven digit revenue, to continue to beat out much better capitalized competition, and cannot handle the current level of demand for their technology. All of this is being done through founder led sales!
The Idiosyncrasy:
With Gautam, Vishnu, and Sameer, there are truly too many idiosyncrasies to count. When we first met the team in the Fall of 2021, two of the three co-founders were considering dropping out of their undergrad at the University of Illinois, and the trio had already been building products together for the younger generations (Gen Z) that achieved meaningful scale in the years prior. Their products helped students and new grads land jobs and they surpassed millions of views on TikTok. They built online Python learning classes that more than 750,000 students benefited from, and they launched a platform to help younger demographics rethink their monetary decisions and become more sophisticated in taking control of their financial future.
It was clear that these three were extremely unique builders who had fallen in love with the problem of helping future generations become more financially sound through the products and financial services offered to them. In 2021, they decided to go full-time on building infrastructure that would help all generations more seamlessly onboard to the financial services that could help them most.
Over the next two years, they would iterate on building onboarding infrastructure for both digital assets and traditional financial services products and ultimately landed on the beachhead market of CUs and CBs. The team found that although modern neobanks had revolutionized digital first user experiences, mainstream financial institutions, like CUs, couldn’t keep up and compete. This is a big societal and economic problem because CUs and CBs have the longest lasting relationships with their respective communities and oftentimes have access to the most competitive products and rates for everyday consumers. It is much better than what is available via digital first, modern neobanks that younger generations typically flock to because of their ease of use.
Over the last two years, the team has built world class software and infrastructure to finally bridge the gap between modern FinTech and these financial institutions that should serve as the primary access point of how future generations access the most cost-effective, highest performing financial services products. Glide makes it easy for anyone to open an account, digitally, within two minutes, for any CU and CB — regardless of what major core system they are on. They’ve built integrations with nearly 100 FinTech APIs, and offer best-in-class compliance/fraud protection.
One may think — how are these three young individuals best positioned to service such an institutional, legacy market like CUs and CBs? It goes back to their unwavering obsession with the problem set and helping future generations across a wide spectrum of communities. To give you an idea of how far this team is willing to go to offer the best-in-class products to this market; one of the co-founders went as far as to join the board of a CU in pursuit of giving back to the community all the while helping them understand how they can offer the best service to the next generation of consumers.
In an idiosyncratic fashion, the company plans on rolling out additional financial services capability for their partnering financial institutions in the coming months and years to help this market onboard the next generation of consumers.
The market phenomenon:
Over the last several years, a multitude of challenger banks, also referred to as neobanks, like Chime, Sofi, and Revolut, have come to market to target digitally native audiences. Oftentimes, these neobanks are leveraging the banking licenses of others and are built on unsustainable unit economics. When taking a step back and comparing the product offerings of said neobanks and their CU and CB counterparts, it is pretty clear that CUs and CBs offer the most competitive rates and general cost effectiveness on average. The reason why neobanks are usually the preferred choice of younger generations is because of their ease of use and low friction onboarding that are usually digital and mobile first — offering a much more native experience to those who grew up on smartphones.
In tandem with this recent market occurrence of a new class of digitally native bank offerings hitting the market, many CUs and CBs are now facing the knife’s edge as they scramble to try and attract the next generation of consumers. Unfortunately, most CUs and CBs today do not have the infrastructure to offer digital and mobile first experiences as it relates to simple product features like account opening and loan applications, among many others.
Glide’s mission and traction to date hinges on the validated premise that CUs and CBs are better for young consumers as they embark on their financial journeys to accrue savings, build credit, apply for a mortgage, and so on. There are 10,000 CUs and small banks alone that spend millions of dollars a year today on antiquated infrastructure that are holding them back. Now that we are beyond the zero interest rate period (ZIRP) era in which fees and loan rates were never an issue, there has never been a more important time to help onboard the next generation of consumers in the most consumer friendly banking relationships possible.
The results so far:
Despite the massive market opportunity at hand, there still continues to be little aggregate effort at helping CUs and CBs upgrade their infrastructure to be more digitally connected. Since publicly launching their product in Q4 2023, the results behind Glide’s launch truly speak for themselves.
The likes of First Financial FCU, University Credit Union, USC Credit Union, and others have joined as early adopters of this very powerful software infrastructure.
The revenue growth, by month, has been astronomical and continues to exceed all expectations and projections to date.
It takes time to build incredible product and technology; the Glide story is a classic example of this startup proverb, in almost every regard.
Conclusion
To say it has been an exhilarating experience to be working with Gautam, Sameer, and Vishnu on their journey to build Glide to date is a complete understatement. Their perseverance and tenacity as founders are second-to-none — having gracefully navigated seemingly insurmountable turbulence through the 2022 and 2023 “downturn”. This is one of the clearest stories of why falling in love with the problem, and not the solution, is absolutely essential to building a successful startup. If it were not for their undeniable passion for helping younger generations achieve the best possible financial future, it is unclear whether Glide would be where it is today.
The perfect coupling of an idiosyncratic obsession with financial literacy and financial independence, with an approach to building infrastructure for an outdated industry is occurring at a time when the entire banking industry finds itself in the midst of yet another paradigm shift — our best and most reliable financial institutions upgrading their infrastructure to be more digitally native at a time when young consumers need it the most.
The Glide team is still at the very beginning, but we could not be any prouder of their progress to date with such relatively little resourcing raised to date (relative to the traction generated!).
If you are a CU or CB professional who wants to learn more about Glide’s enterprise grade infrastructure offering that many have been signing up to use, please do not hesitate to reach out directly to the Glide team.
Check out our last two editions on Wingspan and Integrated Projects below:
