While Canada’s strict, slow-moving financial institutions can be a headache for nimble Canadian FinTechs looking work with these institutions, they also have a positive side. FinTech entrepreneurs have celebrated the fact that our regulations make our institutions among the safest in the world, and because there are less institutions compared to our US counterparts, there is more cohesion when it comes to banking standards.
For this reason, UK-based TruRating decided to enter the North American market through Canada. The company, which operates in Canada out of the DMZ and raised $16.6 million in August, helps retailers get consistent customer feedback. Currently, retailers try to invite customers to fill out online surveys through receipts, or ask customers to take time-consuming paper surveys in store. With TruRating, customers are asked to rate any aspect of their experience on a scale of 0-9 at the point of payment, which streamlines the process of both asking and receiving feedback.
BetaKit talked to TruRating CEO and founder Georgina Nelson about working in Canada, their North American expansion plan, and the vision for the company.
What’s your strategy for entering the North American market?
We work by partnering with other companies that make the payments software that basically sits on payments devices. So that could be Moneris, TMDS, Ingenico, et cetera.
We’ve had our heads down and we’re still very much in that process of getting these companies and retailers. They’ve been building and testing our applications and making that available to their merchants. Bit by bit, these partners come on board and that opens another part of the market for us.
Tender Retail is our first partner that we’ll go live with in Canada, and they’ve got the 65 percent of Canadian retailers, so that’s fantastic. This year will be about polishing that technology, and we’re bringing on other payment partners during this time as well. As soon as possible, we’ll bring TruRating to all merchants in North America because we’d have done hard work with partnering with payments partners in the background. In the UK, we’re working with 100 percent of UK acquirers, and in Australia we have 90 percent of payment partners. This is our go-to-market strategy.
So are you a traditional FinTech company?
There are various labels we use. We use payment companies as our enablement to our market. They take our tech and deploy it and provide it as a value-added service to merchants. But fundamentally, our value is around customer insights. Those who get our services are retailers and hospitality companies. The payments industry are our partners and give us access, but essentially our product is for merchants.
Why expand into Canada first to enter the North American market?
Canada is similar to the UK in terms of its established EMV; you have quite a consolidated market. There are big acquirers in the middleware space. You’re early adopters of innovation, and retailers are similar in that mentality as in the UK and Australia.
It’s a natural place for us to go, because we’re looking to merchants and payment partners. Our global payment partners have said ‘Canada would be a good next market for you’. I think things often start in Canada then go to North America.
In the payments space, America is more complicated. There are so many different players and so many different layers, and with EMV migration and where that’s going, it’s a lot more complex. So Canada has been a dream.
On the flip side of that, have there been any challenges to entering the Canadian market?
When you’re a tech startup, which essentially is innovating and disrupting markets, and you approach these huge banks and acquirers and you say ‘please take my technology,’ It’s not an easy ask for these guys.
They have a lot of red tape, and essentially you’re going into a very secure space on a payments terminal. So things don’t happen as quickly as you might hope.
It’s an industry that’s risk-averse and slow to change. You definitely see payments companies who are much more innovative, really ready to accept and partner with startups. Others need a bit more time to warm up and they will follow the crowd rather than lead.
When you’re a new company and slightly unproven, there are challenges in being adopted by the banks, but all of our conversations are really positive and we have fantastic movers, and over the course of the next few months, we have more people joining the ranks.
Have you found support in the Canadian startup community?
We are part of the DMZ, we started out in that space. We’ve had so many opportunities whether it be conferences, pitches, and introductions.
MaRS supported us with several award applications, they helped us with looking at office space, getting the fundamentals of getting the business up and running in a new city. They connected us to a lot of players and other tech companies we can connect with and build a sense of community, and they helped when it comes to legal advice. Along with the DMZ and MaRS, we’ve had amazing support from Invest Toronto and UKTI Canada.
What are you future plans following this funding round?
To date, we’ve had people manage the payment partnerships. We’re building up our sales team, account managers, building up our data wizards; so getting that part of the team on board who will then be managing and looking after all of our merchants.
Canada has so much potential and opportunity. We want to build an A+ team who are going to serve across every size of merchants, every type of merchant, and across the whole of Canada’s geography. That’s what we’re going be putting our investment into. We want every merchant to have the opportunity to get TruRating within the next year.
This interview has been edited for clarity and length