For years, B2C fintech companies captivated the public's attention. They raised lots of money, built consumer brands, onboarded customers, and it felt like they were on a mission to recreate financial services.
Today, it's B2B fintech firms that appear to be rocking and rolling. Marqeta is one of those businesses that's building generational impact but flies beneath the radar of mainstream press. The company bills itself as a modern card issuing platform and recently raised $250 million on a valuation close to $2 billion. It also has plans to go public. And to be honest, I knew little about the firm when I met up with founder and CEO Jason Gardner recently.
Back in 2010, Gardner was finishing up a stint at MoneyGram. He had sold his company PropertyBridge to the money transfer company and was thinking of what he'd do next. Daily deal site Groupon was on its ascendency and Gardner was eating sushi with a friend in San Francisco with a bunch of Groupon printouts in his pocket. He began wondering how he could load a card with these discounted dinner vouchers. There wasn't a way to do that at the time.
"I became fascinated with issuing," said Gardner. "It's really bow of the ship, engine room stuff. I love complex systems."
Gardner started studying how terminals work and saw an opportunity to build an issuing platform from scratch. History was littered with failed attempts to do this, but Gardner felt it was the right time in history to build an open issuing platform with modern API technologies. Concurrently, leading developer-lead firms, like Adyen, Stripe and Twilio, were being created.
And around three years ago, there was another inflection point for Marqeta. You started to see companies connecting to merchants, whether online or offline. New business models like on demand services, lending, and challenger banks needed to build card products and Marqeta began to take off.
"You needed to be in San Francisco, at ground zero to see that," said Gardner.
Marqeta is an infrastructure play. In the payments stack, you need a bank, a payments network like Mastercard and Visa, an acquirer like Stripe and Square, and an issuer. That's where Marqeta comes in.
A few years ago, if you were a tech company and wanted to issue a card, you'd first go to a bank and the financial institution would turn to FIS to develop a product. Now leading tech firms like Affirm, Doordash, Kabbage, and Instacart come to Marqeta first. "Instacart doesn't call Chase to build a card product for its drivers," said Gardner.
Marqeta focuses on eight industries but the biggest use case today is on-demand delivery. Drivers at Instacart and Doordash used to get loaded debit cards to make purchases for customers. But they frequently bought the wrong things and at times, misused the cards. Marqeta's technology changes that with its just in time technology. JIT authorizes driver spending in real time. It turns on when the driver arrives at Whole Foods and is tied to the order that the driver is there to purchase and deliver. Instacart and Doordash can ensure on their end that what the driver buys is indeed what their customers ordered. If there's a deviation, the transaction will be declined.
For fintechs, Marqeta powers a full-blown financial solution with the debit card at the center. The card can deliver direct deposit, bill pay, point of sale access, ATM access and FDIC Insurance for customers. As a technology company, Marqeta helps fintechs deliver current accounts that integrate with their existing systems.
The company's sales and marketing has evolved as it has grown. "In the early days, no one knew what issuing processing was and thought we competed with Mastercard and Visa," Gardner said. These sales are very complex and Gardner along with the company's chief revenue officer functioned as the sales team for a long time. Now, sales development reps call in on companies and pass those leads off to other reps. With an organic inbound lead, the company can set up a sandbox within a matter of minutes so the prospect can begin building things right away.
Marqeta operates in the US, Canada and recently entered the European market. It has plans to expand to Asia soon. Each market requires special planning, products and services because the U.S. playbook doesn't apply. The company has also been thinking a lot about getting into credit. "Think of Chase with the Amazon card," said Gardner.
Next year, Marqeta will turn 10 and Gardner reflects on his maturation as a manager. He's obsessed over his product, and growing the firm has pushed him out of his comfort zone to focus on people and culture.
He tells a story that an employee came to him asking about career progression and he was a little taken aback. "What career progression? We make stuff and ship stuff. That's what we do," he said.
"Now I understand that culture only gets you so far. You have to build out infrastructure so people can grow."