This Fintech founder explains why economic downturns are positive environments for startups and what 2023 will hold for the industry

Times are tough and businesses are bleeding. Not only is funding much lower than last year, but many companies are having to cut expenses and cut employees to stay afloat as profitability takes hold. However, it’s not all bad news. Economic downturns prove difficult for all businesses, but they can be positive environments for startups.

According to Martin Hegelund, economic downturns mean companies are forced to do the right things due to lack of funding. He also points out that there is less competition for customers and talent during tough times. The following questions answered by Martin Hegelund, co-founder and chief marketing officer of Ageras Group, deal with his entrepreneurial journey, startups during an economic downturn, and what he thinks the future holds for the industry.

Daily Grit: Tell us about your entrepreneurial journey. How did you get started as a founder?

Martin Hegelund: My journey as an entrepreneur started when I started a network of websites in 2005 at the age of 13. It started out just for fun with one site, but I got addicted to everything you can do with the internet. I believe the Internet is the most important invention since electricity, because it enables many new services and amplifies knowledge at a speed we have never seen before.

With this thesis in mind, a small team of freelancers and I continued to launch new digital websites and services, such as advertising-based websites, directories and online stores. I used the internet as a sandbox to continue learning from my many mistakes and worked hard to become exceptionally good at creating digital services, marketing them, and earning money through transactions or subscriptions.

Daily Grit: When did you get the idea for Ageras and how did the company start?

Martin Hegelund: I started my first projects while I was still in school. After doing this as a coach for five years, I met Rico Andersen, with whom I founded a household services marketplace. After working on this project for two years, we had spent all our savings and even taken out a loan to finance our investments. But our pure C2C business model proved unsustainable and we had to shut down.

However, now poor in money but rich in new learnings, we discovered that we were a good partner working together, we had become great at building markets (but wanted to do this B2B instead) and finally we thought about the fact that we as non-financially savvy entrepreneurs had nowhere to get an overview of our finances.

So we started by creating Ageras, a marketplace of accountants and business advisers, and expanded it to most of Europe and the United States. Later we added accounting software with the aim of having a solution where you could always be on top of your business whether you worked with an accountant or not.

Today, we are at a very different stage, now that we have a more comprehensive offering including business banking services in select markets – and have also served a million businesses globally.

Daily Grit: You used an aggressive M&A strategy last year. How does this work in tandem with your executive mindset?

Martin Hegelund: We want our software to be at the center of a business owner’s daily life. So while you can use our lightweight accounting product, Zervant, anywhere in the world to create real value for our customers, we need to have a very strong local focus.

It would take years to create software with all the customizations specific to each market. We have therefore selected a few key markets in which we have acquired a very solid accounting platform which we then use as our main product in this market. Additionally, we want to acquire more niche features that we integrate into our software across the world.

Of course, we create features and products ourselves, but to be truly global, we need to make acquisitions to expand our service offering at the pace we want.

Daily Grit: What are your top predictions for the fintech space over the next 6-12 months? What “trends” do you see falling apart?

Martin Hegelund: Slowdowns really cut bone fat and in a high growth area like fintech I think that will be even more evident. We will see customers cut spending and investors cut even more, meaning only the most value-creating products will survive.

When the money is no longer “free”, we will see highly speculative projects where they inherently do not create value, very risky to execute, or whose potential benefit is too far in the future fall to the ground.

The winners will be those who actually help their users – and I think fintech, in general, is poised to go from strength to strength on the other side of this downturn. Businesses and consumers around the world will be looking to optimize their spending, money management and revenue. There are some amazing fintech inventions that will now see a surge in demand – and more to come – to facilitate this.

Daily Grit: Where do you see the biggest opportunities within fintech, both from a founder and a tech POV?

Martin Hegelund: I think we’ve only seen the tip of the iceberg in B2B fintech. Some companies are already working to include traditionally “unbankable” segments in digital financial infrastructure. The cost of payments tends to zero. There are already countless financial planning and investment apps.

On the other hand, businesses around the world rely on multiple systems, manual processes, etc. to facilitate purchases, invoicing, payments, accounting and banking. This leads to a waste of resources and a huge risk of making mistakes.

B2B may not be as “sexy” as user numbers and brand recognition are often lower than in the B2C space. But the monetary benefit (to both customers and innovators) is so much greater.

That’s why I think our space is so much more interesting to work in. We can see that we are saving hours of work every week for small business owners. It makes a real difference and therefore they are extremely loyal customers.

Daily Grit: What would be your best advice for other fintech founders who are just finding their footing?

Martin Hegelund: Building a fintech business is difficult. You need to get started quickly, get early customer feedback, quickly experiment with your business model, and find your edge and product fit for the market. Disruption within fintech is fast, while time to market can be slow, and if you don’t have a real edge and a business model closely aligned with the value you create, your business could simply be “a feature” in another product tomorrow.

Daily Grit: Do you think periods of potential inflation/recession are positive for entrepreneurs to start their business? Why or why not, and if so, what fintech tools can help them succeed?

Martin Hegelund: Uber, Airbnb, Venmo, Square (Block) and Slack were all founded during the Great Financial Crisis. While I don’t think a tough market downturn is a positive environment for starting a business, some of the greatest companies in the world were started in times of distress.

It’s probably despite the macro environment that they’ve been successful, but growing as a company in a tough market with less access to investment forces you to focus on the right things. Meanwhile, if there are fewer businesses starting up in your space, there’s less competition for your potential customers and talent in the marketplace.

About Martin Hegelund

Martin Hegelund is co-founder and marketing director of Ageras Group. After founding his first internet venture at age 13, Martin became obsessed with building and scaling internet businesses. He is an award-winning serial entrepreneur with 15 years of experience working with digital media, SaaS and online marketplaces. Martin has co-founded several successful technology companies – Ageras Group being one of them, which to date has raised US$145 million to fuel its rapid international growth. It gives back to the ecosystem by investing in early stage startups.

Spencer Hulse is editor at Grit Daily News. It covers startups, affiliates, viral and marketing news.

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