Tipalti CEO: “Every day I get inquiries from struggling companies looking to be acquired”
Tipalti CEO: “Every day I get inquiries from struggling companies looking to be acquired”
Chen Amit, founder and CEO of Tipalti was speaking on a panel with Or Liban, Head of Israel and the Middle East at Airwallex, Keren Danziger, CEO of the Pagaya investment funds, Lilac Bar David, co-founder and CEO of Lili, and Limor Hassid Levenberg, Director of Data and Digital, Bank of Jerusalem
There are currently more than 500 Israeli fintech companies that have raised billions of dollars in the last five years to bring about a major technological revolution. They succeeded in many places, but have also come unstuck quite a bit.
Speaking on this topic in a panel at Calcalist's Economy of Tomorrow conference, were Chen Amit, founder and CEO of Tipalti, Keren Danziger, CEO of the Pagaya Investment Funds, Or Liban, Head of Israel and the Middle East at Airwallex, Lilach Bar David, co-founder and CEO of Lili and Limor Hassid Levenberg, Director of Data and Digital at Bank of Jerusalem.
Keren, at the beginning of the fintech industry there was euphoria that the technology would replace the traditional banks and this is not happening. How does the delicate relationship between banks and fintech companies work?
Danziger: "The banks will remain in the world and we, as a technology body, have no desire to be the Apple Pay of the world. We know how to improve our partner bank's ability to grant credit. We help the banks keep their customers. In the end we amass huge data and over a trillion dollars of credit requests a year. If, for example, the Bank of Jerusalem had the ability to see all the credit applications of all the banks, just imagine what a power multiplier that would be... and this is what we give the banks together with the technological improvements."
Chen, you are a startup, one of the biggest unicorns in Israel. What are your insights? Share your experience with us. How do you see the evolution of the fintech field since you started and what will happen in the future?
Amit: "Thanks to our payment system, today our abandonment percentages are near zero. The free money that existed in recent years is gone and investors are more hesitant and they are looking for the dominant player to follow. In Israel especially there will be a very big crisis. Those who raised a lot of money need to lower their rate of cash burning. There will be a big crisis and every day I get inquiries from companies looking to be acquired. There are more and more layoffs and a drop of growth. It will be difficult without the funds that were free a few years ago."
Or, what fintech companies in Israel have in common is that they do not operate in the local market but only develop the technology here. You took the opposite path and came to work in Israel. Why did you do that?
Liban: "Unlike the other companies here on the panel that focus on the American market, we are a global company from day one. We provide a global financial operating system. To date we have raised $900 million, so we look at the market as a global market and we care about places that have innovation, strong technology and companies that work globally. All these things are in Israel and we are looking at the long term both with Israeli clients who work globally and also with global clients who want to work in Israel. This is part of our strategy ahead of an IPO."
Limor, you represent the traditional industry. How would you like to see the cooperation between the fintech industry and banking?
Hassid Levenberg: "Already today we see that the power is moving to the customer and they can choose how to receive their services. We know how to provide a product to the customers of all banks. A customer of any of the banks can enter our website and purchase a deposit for themselves under attractive terms without opening an account with us and customers understand the power that they have in their hands. The Bank of Jerusalem offers a unique service to fintechs and non-banking companies can rely on our infrastructure. We provide a service that enables the operation of mortgages and more. We have created a flexible infrastructure that allows us to connect partners and provide them with banking services, which can develop further growth and encourage competition in the market."
You mention the Israeli fintech ecosystem. Does it help that there are many fintech companies in Israel?
Danziger: "There are many fintech companies, but in the end there are not many financial services in Israel. The US today has credit databases with decades of data and every technological entity needs the data to provide a service. That's why many of us end up turning to the big markets where there is data. Looking at Israel today, there is really no firm that provides financial services without human intervention."
Chen, you don't work with Israel either.
Amit: "We work with companies like Wix that work abroad. We are a type of financial institution and it took us two years to get a license abroad. If you have a license in Europe, you can also transfer it to Israel. This can allow us to start working with Israeli clients who don't go abroad."
