Companies are increasingly seeking to make their spending functions more transparent, flexible, and efficient. Based on research conducted by fintech start-up Moss, more than 90 percent of businesses plan to continue digitalizing their finance functions to meet operational, financial, and compliance targets. Moss has a clear mission: to support thousands of small and medium-size enterprises (SMEs) around Europe through this process and make the finance function a powerhouse. Moss has concentrated on building products that enable decentralized spending for employees, transform the day-to-day business for entire finance teams, and provide better transparency for finance leaders.
In a conversation with McKinsey partner Jerome Königsfeld, Moss CEO and cofounder Ante Spittler discusses the inspiration for the business, the essential elements for rapid scaling, and his aspirations for the future.
Jerome Königsfeld: What inspired you to build the all-in-one spending management platform that would become Moss?
Ante Spittler: Prior to founding Moss, I was an investor. All the companies I had seen were experiencing the same pain points around setting up their finance function—for example, which tools to use and, in some cases, how to set up the bank account for the money raised. As this specific pain point came back again and again, I decided to call entrepreneurs and CFOs of companies to hear their views and validate this need. The pain point was experienced consistently by start-ups across industries and geographies, making me realize there is a huge problem to solve and significant customer value to be generated.
Jerome Königsfeld: How did you validate the feasibility and business opportunity?
Ante Spittler: It was a multistep approach. In step one, we augmented our initial interviews, calling many more founders and CFOs to get a large base of insights.
Step two was ideating on a solution to solve these pain points. Which type of offering will be required? How broad or how narrow does it have to be to create value? And what should be the company’s purpose and business model?
In step three, we defined our vision: offering a full solution that can guide the customer throughout the entire journey for all types of spending. Based on this vision, we synthesized it into the product components that we had to understand in depth. How do payments work? How do card issuance and transactions work? And on the tech side: what tooling exists to support software suites? What are the different tech layers?
In step four, we started mapping the market for competition. Without building the profound market understanding before this, we could not have mapped the right players against the model.
In step five, we ran through a couple of go or no-go decisions, some sizing, and a high-level business case, all in a really simplified manner. The opportunity was massive, so we started hiring the team and getting the funding lined up to be able to jump-start the business.
Jerome Königsfeld: What was the initial product, and how did it expand?
Ante Spittler: It’s mission critical to have an MVP [minimum viable product] that is as narrow as possible while having a “golden feature,” as we call it. In our initial customer discussions, card transactions and their integration into the finance process was the stage with the highest friction during the spending journey. Accordingly, we scoped an MVP in which we would launch superior next-generation credit cards for SMEs, enabling them to quickly issue credit cards for employees and leverage standard expense functions. The cards were offered as virtual and physical versions and issued with one click on the platform.
At the same time, we knew we would solve the key pain point only if we integrated these cards into the corporate finance processes. So we built in our innovative, golden feature: expense management in which receipts can be mapped against transactions, categorized, and attached to VAT [value-added tax] rates. They can then be exported and uploaded into the key accounting tool. While we kept the MVP as narrow as possible, it was still fairly complex, given that it combined software and financial elements. Luckily, we had the funding and a sufficiently large team to pull it off.
From there, we focused on feedback. A key component was the feature request list from customers that was generated by sales agents. The product team would spend a lot of time creating concepts based on this list, from high-level to concrete products and UX [user experience] dummies and user flows, and then iterating with customers. The end goal was always to get to the essence of the customers’ needs and solve their biggest pain points.
Jerome Königsfeld: How quickly were you able to secure funding?
Ante Spittler: In our case, the journey was comparatively quick. We raised €3.7 million in the first round, and then an additional €5.5 million four months later. There had been no comparable offerings in the market, and investors were keen to get an early stake in the company. We took this opportunity to accelerate the speed of scaling, to ramp up the team, and to gain more runway and more bandwidth for experimentation. Roughly a year later, we raised the Series A with funding led by Valar Ventures, and only a few months later we raised the Series A extension with Valar again. We raised the Series B with Tiger Global shortly after, valuing us at €500 million.
Jerome Königsfeld: What are your lessons learned from raising nearly €150 million within two years? What do you look for in investors?
Ante Spittler: Ultimately, having a solid plan of what it takes in terms of costs to get to the milestones and then adding 50 percent on top is the only way to go. Otherwise, either you will have invested too much money or you will not have sufficient funds, and it will be a disaster. You do not need a detailed business case but a strong hypothesis to substantiate why it’s a ballpark figure. Assumptions are still up in the air. You need to add a buffer and be comfortable with the uncertainty.
Autonomy is key for ventures to succeed. Investors need to give founders the space to do the work. Ultimately, only they can crack it. Investors can try to help a company avoid mistakes by exerting control, but then they also take away all the upside.
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Jerome Königsfeld: What were your key performance indicators, and how did they change over time?
Ante Spittler: Our KPIs were about the early product-market validation. How do we acquire the first customers, and what are the basic conversion metrics? What are the basic economics while engaging with the platform, and how can we extend the engagement? Can we prove that Moss covers the customer’s full transaction base?
Next, we looked at how to capitalize each account: What are the customer lifetime values? What is the composition of the margin contribution? We had data for all of these KPIs, but only six to nine months’ worth. One of the changes from Series A to B was annual recurring revenue becoming the dominant metric.
Jerome Königsfeld: What are your current “North Star” KPIs?
Ante Spittler: We have one customer-value metric and one business-success metric. We express the customer-value metric through the total process volume via the Moss platform. We look into the euro value but also count the number of transactions. Currently, our total process volume has exceeded €1 billion in transaction value. Our business-success metric is the annual recurring revenue. It shows the portion of value generated for customers that we have been able to translate into our own business success.
Jerome Königsfeld: How did the change in scale affect operations, people, organization, and your role?
Ante Spittler: It’s a massive change and a big challenge. Initially, the founders were very hands-on: we knocked out our own packages, acted as role models, and were deeply involved in recruiting. The most important element to take care of is hiring the initial team. It’s so small that every individual counts and makes a big difference. For example, we had only one product designer for a long time—meaning the whole user interface of the platform depended on just one person.
With up to 60 to 80 employees, the start-up can be managed and organized fairly easily, with a low hierarchy. As the company starts to grow, you build small teams, consolidate responsibilities, and allocate ownership of certain metrics.
After this stage, a new organizational structure is required. Teams outgrow a size where they can effectively work together, which means you need to cut teams in a different way. The product team, for example, starts to divide into individual tribes. Decentralization takes off, and day-to-day responsibility moves away from the founders. The second-level leaders become highly engaged in recruiting and attracting the next wave of talent. They own a lot more of the work packages as well as leadership of the operational workforce. The cofounders and other executives must step out of the way as much as possible.
Jerome Königsfeld: How did you manage the governance in the transition beyond 80 employees?
Ante Spittler: Laying the foundation first enables you to hire specifically for the target organization. You will have a clear view of the roles and responsibilities. Otherwise, you start hiring and realize that you must come back and lay the foundation first.
Scaling beyond 300 to 400 employees is a totally different level of complexity. Here, we engaged an external coach who had spent substantial time building the European business of a leading, mature fintech company. This coach helped us go through the different options, define guiding principles, and execute on them in the specific departments. It is a time-consuming process that has a huge payback if done right.
If you do it wrong, you will lose nine to 15 months because you will search for people, hire them, and then realize it doesn’t work properly. I wouldn’t say we did everything right—on the contrary. But we also learned.
Jerome Königsfeld: How did you tackle the international expansion? What are the learnings from exploring different markets?
Ante Spittler: First, you need to ask why going international is part of the equity story. Will it create synergies? Will it increase the total addressable market because the home market is too small? The “why” is the most important.
For the “how,” there are probably millions of different ways. We interviewed quite a few companies to see how they did it. Then we decided to build a small, dedicated team responsible for internationalization to support market selection as well as the launch process. The market-selection process is closely focused on macroeconomic figures, customer interviews, and the validation of the opportunity. Once you decide where to go, it requires a strong PMO [project management office] to ensure process stability and a smooth, on-time launch.
We wanted to prove that we are a European player. This marked a validation point for the equity story and helped us understand where we can compete. We also wanted to capture additional growth potential and reduce the risk from operating in just one country.
Jerome Königsfeld: What is the next horizon for Moss?
Ante Spittler: What matters most for us right now is that we demonstrate that we can scale up massively but in an efficient way. This includes ensuring growth materializes and economics pick up in a viable and effective fashion. These are the overarching objectives, but there are a lot of goals underneath. Further, we want to grow into a leader within our existing markets.
For the organization, we want to foster and clarify what the culture was built on, add basic elements of performance management, and ensure this company remains a place where talent wants to spend their years—because ultimately that’s the biggest asset we have.
Finally, our product vision is to offer the complete spending stack for our customers. We want to build the Salesforce for spending, where customers process every euro they spend and ideally also use our payment instruments for those transactions. Running all transactions via Moss enables customers to capture the biggest value-add because it can massively reduce the time spent by their finance teams.
