Sparados - from transaction to posting in the accounting system

How quickly did the startup manage to start selling a fintech product and what had to happen in the company up to this stage - says Michał Stachera - CEO and founder of Sparados.

Sparados helps you manage your company's finances. This is often how you present the company. What does such help mean in practice for your customers?

Michał Stachera: The product offered by Sparados is a platform for managing company expenses. It consists of a virtual card for online and contactless payments and applications connected to the company's accounting system. These are virtual Mastercard cards, which we are able to issue within 5 seconds for employees of a given customer from the administration panel. They are then able to add the card to Apple Pay and Google Pay, pay contactless with it, and download scans of invoices to the accounting system. 

Thus, Sparados makes it easier and more efficient to manage the company's budget, from the costs associated with running an office to business trips and other large expenses. It is also a tool for looking for cost optimization.

You entered the market with the product very quickly. How did it happen that you can talk about a rapid beginning?

MS: We are an example of a startup that went through a rapid path first between the idea and the start of the business, and then between the establishment of the company and the sale of the product. In general, the idea for the business was born in mid-2022, and we had our first sale as early as April 2023. 

What certainly helped us was the fact that our service is strongly integrated with Verestro (under which the idea for Sparados was born) and Quicko (together with it we issue virtual Mastercard cards). Very quickly, we also had a group of investors - already in September 2022, they included: the WP2 Investments fund, Cezary Smorszczewski - Business Angel and the already mentioned Verestro and Quicko companies.

The funds we received at that time were certainly conducive to the rapid creation of the product and the very fast building of the company. By this I mean the development of a mobile application, the introduction of Apple and Google wallet to the application and the creation of an interface where the employer can generate cards for their employees.

These circumstances meant that our path was certainly not the path of a typical startup.

Only 9 months passed from the establishment of the company to the first customers. Exactly in April 2023, we started selling the Sparados service. At that time, we already had an application for Android, for iOS and a working portal, which was used to issue payment cards and send files with invoices from the mobile application to the portal.

At the beginning, of course, we had a lot of bugs both in the application itself and on the entire platform. We would like to thank our customers that despite these imperfections, they did not withdraw from our service at that time.

This is a difficult moment for a startup - there is a product, sales have started that reveal its imperfections, customers start to show dissatisfaction. How to stop them? How did you deal with it?

MS: It was crucial to contact the customer at every stage of solving the problem. It was not the client who asked us if anything had changed in a given case, but we kept him informed about the status of his case. Time played a huge role in this process. 

Of course, this involved constantly writing emails and explaining why a given functionality did not work, and focusing on solving the problem was just another activity. The most important thing for us at that time was that the customer felt that we were working on their problem. 

We have set up a 24-hour service so that the customer can contact us at any time. Now we have a support line, mailing - we have an SLA assuming that a given support request should be answered within 15 minutes and we have a 24-hour phone number where we respond to customer requests. I would like to emphasize that at the beginning we handled all this individually, manually.

Where are you today with product development and customer service?

MS: We started our business with one product - a system for managing expenses in the company, which allows you to manage cards and transactions.

We have added additional functionalities to this product, such as a request to increase the limit on the card, file exchange between the employer and the employee, and analytics that allows you to check the expenses of a given user or group of users.

The expense management system was our first product sold globally.

At the moment, we are already selling three products. The second one has an interesting story that explains its appearance in our offer. At the turn of 2023 and 2024, a client came to us who said that he would like to show his brand on the card. It inspired us a lot and we quickly came to the conclusion that it is easy to rework our web application taking into account the visual of this client's brand. In this case, he can send both his employees and customers a card with the company image in a personalized, branded card collection application. Thanks to this, it makes your brand visible and even more strong, fosters the employee's identification with the brand and facilitates it. It also shows that the service is partly owned by him.

In such a case, we actually issue business cards branded like other materials of a given client. We have already sold this type of service to 10 customers within a few months.

And the third product - which was clarified a few months ago - is the lunch menu. What distinguishes it as a product are MCC codes (it allows payment only in defined catering establishments), and besides, it does not differ from a regular payment card). And so we created the business model in which we now sell Sparados lunch cards - an innovative benefit for employees.

What distinguishes your solutions on the market?

What we build our competitiveness on, entering the B2B market, is primarily based on a low monthly fee from the customer. Our users pay not per card, but per system user and we charge one standard monthly fee for the bill. It is the cheapest solution of this type among those available on the market. So we are really playing with the price. 

What makes you able to afford such a distinguishing feature?

MS: We have very low costs related to card maintenance thanks to the partnership with Quicko and Verestro. So we already have savings at the level of card generation as well as additional benefits from transaction processing. We have the advantage of our customers paying with the Sparados card, but not directly from them. The business model is based on commissions that Mastercard charges its merchants. When paying by card in Poland, the merchant pays about 0.3-0.4 percent of the transaction value, Mastercard transfers part of this amount to Quicko and they share it with us. So we can afford to compete with a low price. 

We have a relatively small team that is sufficient to handle the entire solution, because most of the IT development work is outsourced to Verestro. Thus, the integration of our service into other companies in the entire structure allows us to offer customers a competitive price. 

Thanks to the fact that we issue cards in Poland, and we are currently focusing on foreign customers, all transactions that are carried out outside the Polish state have a much higher interchange, which is the fee that Mastercard collects from merchants. In Poland, it is 0.2 per cent for business cards, and abroad it is 1-1.5 per cent, depending on whether in the European Union or outside it. 

IT costs are lower than in European countries thanks to operating from the Polish market.

Our competitors are mainly companies from Western Europe or the United States.

Competitors - importantly - usually do not offer the second model of the solution from our list of services, including the promotion of the client's brand.

We also have an unusual solution for one client, which works in such a way that when there is a fundraiser for a given charity, our cards are used so that the funds that have been collected for the person in need are spent in the right way. This means that the recipient receives a Sparados card and can only pay with it in pharmacies and medical facilities. This is an unbeatable solution.

The fact that we are a relatively small company allows us to adapt to the needs of customers in a very flexible way. And sometimes they are really non-standard, such as additional columns on the transaction history or an additional service that is designed to alert them about a low balance.  

This way of working is, in a way, a strong listening to the market, defining what customers really need. And on this basis, we implement new functionalities of our products, we do not invent them, they come to us in this way.

Who are your customers and how do you reach them?

MS: We already have over 50 customers from different market areas. Our service is so universal and important for every company,  regardless of the industry. It is useful in any company that has more than 10-15 people.

In every company there are business expenses and it is helpful to have a system to manage these expenses - everywhere employees are hired who need to settle business trips, in every company there is a need to pay for an office or even buy cleaning products.

The Sparados solution saves a lot of time - there is no need for the employer to go to the bank with each employee, fill in forms, etc. when it is necessary to issue a card - as it happens in traditional solutions. Here, everything is done digitally in a few minutes.

Currently, we focus on running marketing and sales campaigns, changing their target every month. Throughout the month, all activities are aimed at customers from one market segment. Now, for example, on transport companies from Lithuania. We noticed that a lot of transport companies have their headquarters there, so we decided to try our hand at this market. 

In general, our service is directed to the whole of Europe, because we offer cards in euro and PLN. We look for the value we can provide to our customers and to what extent our solutions can meet their needs, and we build communication around these values.

Then we create a Google Ads campaign, send cold emails using our business emails. For now, we are doing this without automation, because we believe that thanks to such an individual path, emails have a higher response rate, which has been confirmed by us. When we used automation, recipients often treated messages as if they were sent by bots and didn't respond. That's why we do it manually. We have a procedure for searching for companies, identifying beneficial owners or board members, but we ship it ourselves and it is maximally tailored to a given customer. We try to adapt the value of our offer to the specifics of the clients we write to. We don't send messages according to one template – we first analyze the website of a potential customer to catch nuances that will allow us to best match the content of the offer. We create it based on the values that are key to a given customer.

We communicate with about 200 potential customers per month, of course through various channels, but most of them are cold emailing. Response rate, i.e. the number of people willing to demo something more - about 3 percent, i.e. 4-6 customers from 200 contacts.

What is the ideal Sparados client?

MS: One that registers into the system without any interaction with us. What does his path look like? New customers through google ads or thanks to existing customers, find out about the existence of Sparados, check what we offer on the website and contact us themselves through the registration form on our website. Of course, thanks to the cooperation with Quicko, we have a full KYC procedure (procedures related to customer identification) -

Each client must scan their photo, passport, provide all information about the company necessary to pass the verification.

Our sales strength is in partners such as Verestro, WP2 Investments or Spinaker, who help us to actively promote Sparados' services. Which certainly helps a lot to develop the company and gain customers, considering that our team is very intimate.

We have a finished product, we have one developer - "for special tasks" - he solves customer problems, we do not have to rely only on the services of partners.

Where do you look for motivation to work? What inspires you? How do you stack up as a manager?

MS: I often start my day with support requests when something doesn't work with the system or there are some technical problems. So I usually start my day with troubleshooting. 

I am most motivated by financial results. Our company is in a moment of very rapid development. In 2024, we are recording an average increase in the company's revenues of 17% month-on-month. When I see that our customers are growing, that they pay more and more often with our cards, that they are satisfied with the service, my satisfaction and motivation definitely grow. 

I have noticed that people who have achieved a lot devote a lot of time and commitment to the company and their own development. These are not people who give orders, but who work the most, regardless of their position in the company or seniority. Striving for intensive work brings results - and certainly such an attitude of people who surround me, such as Krzysztof Drzyzga - inspires me a lot. I try to imitate them, translate it into the approach to my duties, to my organization. This is also how I build experience, which results in the growth and development of my competences.