Reviving the Core — Investing in FLOWX.AI

Challengers vs. Incumbents

Digital challengers have been emerging over the past decade in almost all verticals, delivering innovative products and solutions, as well as best-in-class user experience to suit modern customers. These companies are focusing on digital solutions which enable them to operate more cost-efficiently by avoiding the high costs associated with running offline premises, and they can funnel that money into better services or even give back part of it to customers by lowering fees. Not surprisingly, these traits, coupled with extraordinary customer base growth and an excessive money supply, attracted billions of dollars in VC funding.

The competition is far from being over yet, however. Looking at financial services, e.g. millions of people have at least one challenger bank app on their phone, though most of them still use these as secondary accounts. Their primary accounts remained at traditional banks, and they still conduct most of their “heavy-weight” financial business there (the type of services which can be well monetized). This business has been filling up the war chests of incumbents for — in many cases — more than a century. So incumbents are not going anywhere. Their established market position and vast financial resources — which resources are incomparable even to the most well-funded start-ups — enable them to fight back, and they are fighting back hard.

A lucrative business opportunity with no perfect solution (until now!)

The modernisation/replacement of their legacy systems is certainly not an easy challenge, though. Financial institutions are running hundreds of disjointed systems — from different generations, different technologies, different versions. Data is fragmented but also redundant and inconsistent across their systems. These systems are unstable, unscalable, and employees and customers are feeling the pain.

Anyone who is helping financial institutes to tackle these modernisation challenges efficiently is addressing a pressing problem of a client base with deep pockets, and consequently is poised for success in our opinion. This has been recognized by many, and numerous successful companies have been built based on this simple thesis. When we look at the market, however, we see solutions which are only partially addressing the problem:

1.) Rip-and-replace solutions are lengthy, high risk and high cost.

2.) Modular solutions are merely patch-ups. They don’t liberate banks/enterprises from the captivity of their legacy stack, which consists of disjointed systems in a spiderweb of integrations and handcrafted workarounds.

Meet FLOWX.AI

FLOWX.AI’s solution addresses this problem in a way that:

1.) delivers quick digital journeys in an omnichannel, unified way on the front-end, with clear return on investment for its clients,

2.) while under the hoods, it also enables incumbents to upgrade and eventually replace their legacy system in a risk-free, step-by-step process which leaves systems and the business undisturbed.

1.) Delivering results in 10 weeks

FLOWX.AI developed an orchestration layer, which sits on top of legacy systems and consolidates them in a way that they become extensible and scalable. This layer allows enterprises with complex technology landscapes to build digital journeys for customers and employees, or back-end functionalities right away — unbounded from the constraints of the legacy stack.

2.) Reviving the core, the path towards real digital transformation

Keeping the status quo, adding things on top and pouring millions into half-decent results is not a new thing, however, and neither is it a good strategy. FLOWX.AI is far more than that. Once the engine is in place, not only the development of new back-end functionalities and integration of 3rd party plugins become super easy, but enterprises can begin replacing their legacy stack step-by-step while maintaining the business undisturbed. So customers or employees won’t experience downtimes or breakdowns in their day-to-day activities, and the incumbents’ reputation remains intact.

Added to this, FLOWX.AI’s ZeroDeploy™ architecture — which includes novel low-code/no-code capabilities — enables businesspeople to edit or add to a process and have the changes instantly deployed with a click of a button. Data models are generated dynamically, and UX/UI becomes consistent across all digital channels. This enables 100x efficiency vs. traditional development and 10x vs. the current generation of low-code/no-code tools.

To sum it up, FLOWX.AI’s solution enables enterprises to create, deploy and scale digital services in a highly scalable manner despite their legacy systems.

Financial services is only the beachhead

FLOWX.AI’s initial market entry focuses on financial institutions, given the banking and insurance industries’ imminent digitalisation needs, which is already a multi-billion-dollar market. This is only the beginning, however, as the company’s solution is perfectly capable of helping enterprises in any other industry (and this is showcased by OMV-Petrom, an early customer of the company — in addition to large banking logos such as Banca Transilvania).

So who’s behind all of this

The company has been recently spun out by one of the founders and the R&D team of a software development company, QUALITANCE. QUALITANCE was founded in 2007 and is developing digital solutions that leverage next generation technologies — AI, blockchain, machine learning, IoT, AR/VR etc. — for clients like Virgin, GE, IKEA, Deutsche Telekom, Johnson & Johnson and Ford. The company has offices in Bucharest, San Francisco and Sydney and employs ~150 employees.

Ioan, founder and CEO, accumulated vast experience during his time at QUALITANCE in company building and selling to large enterprises in a value-based manner. He is perfectly complemented by Serban’s, founder and CTO, technical skill set and US Navy Seal-inspired „slow is smooth, smooth is fast” philosophy, which enabled the development of FLOWX.AI’s platform, which had zero defects and zero downtime so far. Lastly, the team is very well embedded in their local IT market, which has already enabled them to hire some of the most talented professionals from the UiPath-success-fuelled Romanian startup ecosystem.

Today, we’re thrilled to lead FLOWX.AI’s $8.5m seed round. Our funds are in good company with participation from DayOne Capital and SeedBlink.