Wultra Turned from a Bootstrapped Company to a Venture-Backed Company in 2022, Introducing the Required Organizational Changes
In December 2021, Wultra raised its first external seed round from J&T Ventures. The year 2022 was mainly in the name of invisible internal changes. While we underestimated the complexity and timing of such changes, we remained healthy and are ready for 2023.
We want to tell you more about how we did in 2022 and what we plan for 2023. We had a good year, but we also have much work ahead.
Summary of Financials
As a bootstrapped company, we were always set on conservative spending and kept our company profitable. Despite all the efforts, we did not manage to change our operation in 2022 effectively and ended up profitable again.
We closed the fiscal year with 20.31M CZK of revenues (~US$ 914.91k, +14.88% YoY), and — despite all our effort to accelerate spending to support quicker growth — we accumulated 1.179M CZK profit before the tax (~US$ 53,110, -44.15% YoY).
Financially, we are healthy with over 33M CZK (~ US$ 1,49M) in cash or short-term deposits (as of March 11, 2023). Our monthly gross burn rate is around 2.2M CZK (~ US$ 99.1k), which gives us a long enough runway (we try to keep at least 12 months of runway, our optimal value is 18 months).
Why Didn’t We Grow Faster in 2022?
Long story short: We could not spend investor’s money efficiently in the first half of the year, and all the changes we had to make in the company blocked our existing resources.
The main struggle for us was hiring. While we started hiring at full throttle immediately after the investment, we underestimated naturally occurring delays. We solidified the organization chart in December 2021, published our first job descriptions in January 2022, got our first successful candidates in March and April 2022, and onboarded the first round of new hires in June and July 2022.
At the same time, the process of hiring, new hire onboarding, and introducing and documenting necessary processes took a toll on the existing team. As a result, we had to put a significant amount of energy into:
- Shifting away from CEO-based sales, meaning I was not building my sales pipeline as efficiently as I was in 2021, and
- Adjusting our regular day-to-day software development operation, as we had to introduce new technical people to the codebase and running initiatives.
This structural change in the company’s modus operandi naturally slowed us down, resulting in slower growth and lower profitability.
However, we eventually resolved most of the hiccups and made a reasonable effort in the successful transition. We grew from 8 people to 19 (in early 2023, we lost two people, ending up with the current 17 people). And hence we positioned ourselves much better for 2023.
Growing Through Further Global Diversification
Despite all the hassle, Wultra thrives and has references in 15 countries. We now work with customers from the United States, Brazil, France, the Isle of Man, Finland, countries in the CEE region (Czech Republic, Austria, Romania, Slovenia, Ukraine, Moldova, and Albania), Ghana, Hong Kong, and Indonesia. However, our global presence is still sparse, which gives us room for improvement.
The good news is that we closed several meaningful strategic partnerships abroad in 2022, broadening our portfolio of references we can use to penetrate the markets in which we are active. In 2023, we will continue to push our growth globally to broaden our international presence. To achieve this, sales and marketing will be critical success factors for us. Sales and marketing will be the main areas where we will spend money in 2023, in the second place, right next to people and their salaries.
Crisper Message in Refreshed Brand
Refreshing our brand and communication strategy will be one of the big strategic projects in 2023. The main change you will see will be a better focus on our core values and a crisper message to our prospects.
PowerAuth, our advanced authentication suite, makes up almost 60% of our revenues. We will focus on it much more than we do.
We make modern authentication for financial apps that is easy to deploy, extremely secure, user friendly, and compliant with legislation of financial markets.
But yet, people who visit our website cannot figure this out. We need to change this.
We also want to step back and adjust to whom we communicate primarily. Despite our excellent developer portal, we feel we neglected developers in the past year or two. To me, a technical founder, this subject is personal. We want to make developer-friendly systems, and we spent too much time communicating via a “happy life from the photo bank.”
We want to make Wultra for financial apps what Stripe is for payments or Twillio for messaging — an automatic and default choice. More love will go into our products and their packaging, cloud readiness, and technical documentation. Similarly, we will adjust our brand and communication assets to reflect that we have technology in our DNA.
Important Factors for 2023
To wrap this post up, I would also like to mention some crucial topics that will influence our operations in the upcoming year.
Losing Equa Bank Due to Merger with Raiffeisenbank
One of our significant customers was Equa Bank. It was one of our first customers, with cooperation dating back to 2017. We lost Equa bank due to a merger with Raiffeisenbank (also our customer), which will negatively affect our revenues in 2023.
While we managed to compensate for this loss by acquiring new customers, we made “two steps forward, one step back.” Our strategy for 2023 is global diversification — we want to get ourselves in the position that losing any customer due to reasons we cannot influence will not affect us too negatively.
Growing Global Economic Tension
Due to the current global situation, we need to manage our capital more conservatively. We can see that the world is still recovering from the COVID-19 pandemic, our region is less stable due to war caused by Russian aggression, and we see surging energy prices and record-breaking inflation. To combat the economic volatility, we diversified our finances, and we now keep funds in two separate banks:
- Raiffeisenbank, a.s. for day-to-day financial operations.
- J&T Bank a.s. for long-term money deposits with higher interest rates.
We keep at least six months of runway in each bank to recover from any complicated situation confidently.
To improve visibility in our financials, we also introduced a robust financial controlling mechanism in partnership with Proefo. Thanks to it, we can see all our financial data in PowerBI.
Hybrid Mode, Instead of Fully Remote
Most of our team members prefer remote work from home. Now and then, though, we get signals that they miss human contact. Be it an in-person technical sync meeting or an informal chit-chat over coffee. Some team members also raised issues of balancing work with their family life or having poor conditions for work at home. To make Wultra a good place for our employees and contractors, we will introduce a more flexible mode, with partial office allocations or the possibility to easily book coworking space.
