As the economic climate continues to intensify, the environment for StartUps looking to evolve their business and flourish is becoming increasingly challenging. 

In the latest edition of StartUp Sessions we spoke to Mantvydas Štareika, CEO of CapitalBox, who described why this particular moment is unique because of the tough economic climate. 

Firstly, are you able to tell us more about your Startup and the role you play in the payments industry? 

I’m the CEO of CapitalBox, a pure fintech lender which provides underbanked SMEs and Micro SMEs throughout Europe with the financing they need to grow. We offer alt funding solutions specific to their needs, including business loans up to €2m . 

Thanks to the sophisticated automation of our application process, we can do this incredibly efficiently, dispensing funds in a single business day or even a matter of minutes. Our automated process currently allows up to 50% of all inquiries to be processed automatically without any human involvement. 

CapitalBox’s role in the payments industry is simple. We exist to service these underbanked SMEs directly. SMEs make up about 99 percent of all European companies and thus the backbone of the continental economy, but traditional finance institutions often consider them too risky. In other words, these businesses need real funding that these institutions won’t provide them, so we do. 

Together with Multitude Group we aim to expand our services to all corporations by providing them more everyday solutions. This includes credit cards, bank accounts, payments, currency exchange, financial reports and so on. We believe that small businesses shouldn’t have to use different provider solutions just to complete simple everyday tasks. Businessed want one-stop-shop platform-based services, and that’s where our company and this industry is heading. 

Can you detail some of the challenges in gaining funding and building momentum during a tough economic climate? 

This moment is unique because of the reasons behind the tough economic climate. Inflation is a force to be reckoned with, even as it eases up. Attracting and maintaining talent is only becoming more competitive.

 A lot of these businesses are in need of funding just to stay afloat amid rising costs, to say nothing of hiring the personnel they need to make it to the next stage of growth. From a traditional finance institution’s perspective, being in that situation can be an automatic strike against them. 

There’s almost always a high level of competition when it comes to attaining funding, but the realities of inflation and the post-pandemic business world have pushed more businesses into the arena than there might otherwise have been. There’s no denying the trickiness of this moment.

In terms of your roadmap, what are your goals for the future and how do you plan on reaching them? 

I know it’s a cliché to say “keep growing,” but that is the number one goal. We want to work with more SMEs in more European regions with higher lending payouts. The growth of our business is inextricably tied to the growth of the businesses we lend to. More than that, this mutual growth is the only way we can close the SME funding gap in the E.U., which is now about €400bn . 

We’ve expanded outside of Scandinavia and the Baltics for the first time by opening a Dutch branch earlier this year. We’ve also begun to offer loans in the low six figures. Our current goal is to reach a minimum of €100m financing portfolios in every market where we operate. 

Thanks to the support from Multitude Group, we’re able to broaden our service scope more easily by offering additional solutions to every corporation. Multitude is currently operating in 18 countries, making it easier for us to break into these markets as well. 

As you have grown your company, can you tell us some of the key challenges and how have you evolved to meet them? 

We’ve experienced the same challenges as any startup, which are the same challenges of so many of our customers. That includes appropriate funding. Securing enough capital to launch and sustain operations is a major hurdle. Usually this is the main challenge to launching and maintaining a business, regardless of the industry. 

With numerous startups being founded, standing out from the crowd is a constant challenge, especially if they’re  competing against giants like Amazon and other platforms. 

Hiring skilled employees who are willing to work for a startup is difficult. You need people willing to go the extra mile, put the time in, and invest themselves in the company’s mission. 

Scaling is always a challenge. Growing too quickly or too slowly is detrimental. We’ve been incredibly deliberate about how and when we expand, and that’s made an enormous difference.  We know what our customers are facing because we’ve faced – and overcome – the same challenges.

Can you tell us more about some of the challenges involved in hiring and acquisition as a startup? 

I don’t think the challenges CapitalBox faces with regards to hiring and acquisition are altogether different from the challenges faced by other alt finance companies. Our hiring team is well aware of the changing priorities of employees – take flexible hours and remote work, for instance – and has implemented programs to cater to those priorities. 

Fintech can sometimes feel like a small world, and companies absolutely compete for the best people. We’re upfront and deliberate with what we can offer potential employees and what we hope they can offer us. 

Of course being part of a large group with more than 700 employees provides a level of security to new employees. But it doesn’t change the fact that we need to keep pace with our competitors in the market by providing additional benefits like health insurance, extended paid vacations, recreational activities, and more. 

I think that’s the best method, and I’d still feel that way if the market wasn’t nearly as competitive as it is right now.