“I quite like the chaos of startups” with Luke Mackey, CEO of Kota.

Luke Mackey: Foreign.

Greg Dilger: Welcome to the Renatus podcast. My name is Greg Dilger and I'm delighted to be joined today by Luke Mackey, co founder and CEO of Kota K O T A. Kota is a digital platform that makes employee benefits simple for both employers and employees. It's not a perfect analogy, but I'm thinking COTA is to employee benefits what Stripe is to payments. That is the infrastructure that connects all the messy parts behind the scenes so companies and employees get a clean and user friendly experience at the front end. In this podcast, Luke is going to tell us a bit about himself and his background, about why and how COTA was set up and their ambitious plans for the future. This is a proper entrepreneurial story. So Luke, what we want to do now, maybe a little bit of a chat about the early days of yourself. Like I've said in the intro, it's an entrepreneurial story. You were an entrepreneur from an early, early stage. But tell us a little bit about that time and your background before we talk about Kota specifically.

Luke Mackey: As a kid, I probably always had that initiative to just work and find ways to make money. Um, and that's probably because whenever I made money, I spent it as a, as a kid. But that would have been as some of the early origin stories of me going up the road to where there was Christmas trees for sale and basically saying to the guy, you need to give me a job because I would love to do this. Um, and over probably three or four or five Christmases, I was there every Christmas and hiring my friends. And I love that. That was, that was really hard work and I think that's something I've definitely shows you. If you listen to some of the other entrepreneurs that have even been on your podcast, if they went back, they would have tell you they would have done things like that. I know some of them have actually little Christmas trees. And then in secondary school actually I got into a pretty expensive sport, which is mountain biking. Um, mountain biking is a lot of travel. It's an expensive bike, a bike that breaks all the time. And to afford it you kind of need to have some sort of means, which I didn't have early, so I had to go find it myself. So I actually worked in the school canteen from first year to sixth year, every single lunch break. And that's how I was able to kind of afford to do those types of things. I don't know where the drive came from, but I actually wasn't trying to be an entrepreneur. I didn't really see it as an option. I wanted to Be an airline pilot, funny enough. So school was something where I was like, uh, it was more social than anything else. There was parts which I excelled in, those parts I definitely didn't enjoy. But I wanted to go and become an airline pilot. So at the end of school, I was the only way of me trying to get that training was through the Air Corps. So I had all these kind of experiences and patterns where I had all this entrepreneurialism. But I, for some reason didn't recognize it. And instead I wanted to become an airline pilot. Now I got to like the cadet. Went to the cadet ship for the airport corps. And I actually didn't get into it at the last four or five people. I didn't get in, thank God. And then I went off to study marketing.

Greg Dilger: It's really great.

Luke Mackey: All kind of stuff.

Greg Dilger: Okay. Yeah. So you did marketing and you. In terms of finishing that course and all that, what. What did you work at then? Was your first job or proper job?

Luke Mackey: Plenty of college jobs, whether that was selling phones or working in retail, uh, traditionally what you do when you're in college. But I did that ever since I could. Ever since I was 18. I think I had some means to work. And probably by first year or second year I started to get busier and busier in college and I started to see that. Well, actually, I really enjoy this. This is like something that came way more naturally to me than school. I was. Didn't have to study everything was more common sense and everything and to marketing. And I had a friend of mine in secondary school who was a designer, like a graphic designer and a product designer. And we just started kind of jamming and meeting up and talking about different things. And we decided that why don't we try and start a little marketing agency that served an area we thought was. Was interesting, which was restaurants and coffee shops, mainly because these are people that were really busy and didn't have really any good social or web presence. So they have no website and you Google them and their menus would be on these PDFs that you wouldn't be able to understand. And, um, they didn't know what Snapchat was. They didn't know what Instagram was back then, which was.

Greg Dilger: So remind. Remind us how old you are now. Just up for context.

Luke Mackey: About 19. Yeah.

Greg Dilger: No, but how old are you now?

Luke Mackey: Oh, I'm 31 now.

Greg Dilger: Yeah.

Luke Mackey: Yeah. Um, so I was 19 at the time. And we started a little agency, which is just the two of us, and we started pitching for business and going around to like, These types of businesses, we say, here's an opportunity, can we do this for you? We'll charge you a retainer. And people just kept saying yes. And we kept getting referrals, did that for about two years when we were both in college, making far more money than we ever thought we would make, working way harder. Working 20 hour days between college and then we kept getting referrals from all these people that didn't want the work. We kept getting seeing all these people that were like, oh, yeah, I don't want to do this part of the business. I want to do the higher margin stuff. You can take this. And I was like, great. And I just got to know a lot more entrepreneurs, a lot more kind of restaurant entrepreneurs. So people who were two years into starting a coffee shop on angel street and understanding what are the pains they had and things that were difficult and the peak times and the pit times, and I just started to see how they operate. And I realized they weren't operations people either. So they were artists. They were people who cared a lot more about making sure that the coffee went out in a certain way and that it was delivered in a certain way. And the customer interaction was good. And here I am seeing all these people standing queues and just going, looking at their watch and they're going. And I was like, I kind of get that, uh, understanding. And I got it myself. So I was. When I was in college, I obviously was working really hard and I starting getting into drinking coffee and I started, um, like, same dart I got every morning. So I started actually texting the barista that I knew behind the counter in the coffee shop I used to go to every morning and saying on the way up, can you order? Can you make me a flat white? And my coffee would be waiting there and I bring it, go straight to the diet. And then at the end of the week, I'd settle with him. And about a month or two into that, I started seeing coffee just sitting there on the counter when I'd go up, and I was like, which one's mine? I was like, hold on a second, are other people doing this too? And yeah, he told me, actually. Yeah, uh, when you order, other people ask, how did he do that? How did he. Was Harry able to skip the queue and order? And I was like, okay, maybe there's a product here. This is moving away from the marketing stuff and going, well, maybe this is a tech product. And what would this look like? Is this. I don't know anything about startups. Is this a startup So I started following what it would take to build a product and I wasn't technical and neither was the guy I was doing the marketing agency with. But I started getting uh, trying to understand what design looks like and what good design looks like. So I started demoing the tools and trying to understand it and effectively just basically built a prototype without any technical background and started showing it to people and going here's what I think might work. I think if you, you could be in your office or you could be on your way to your office or you could be on um, whatever it is. And I want to be able to order for in restaurant versus delivery. And at the same time in the US Starbucks were bringing out this type of functionality which is called mobile order and pay. And that intrigued me a lot. I was looking at what all the delivery guys were doing in that space and the same time as well. If you think back, data didn't used to be a thing that was free on phones. It used to be something you'd pay and you'd run out of. And um, that was changing too where people were using social more so on the go became a thing that was really hitting a few taps. And our whole thesis there was why don't we build a in person marketplace for local restaurants and kind of mainly more in the central business districts like your IFSC's and your baggot streets and your area wharfs in London. So I've actually met my co founder for that business while I was in college so using DIT and I was NCI and I saw him building a project that was similar and I said hey, what about this? How about we come together and we do this together. We thought about it, we stress tested for a while and he had an offer for a really good company after um, college he actually won the project fair and they bring all the people, they hire those people right after college and we both said, you know what, let's just do it. And I remember vividly just the story of him where he had to go in and collect this check which is like a signing on check for this company which no one has ever declined before. Declined the offer, go in, take the check and then check out and get a picture done and go, I'm actually not joining. Why are you not joining? I'm going to start a startup. And they all laughed and was like okay. And um, we went and did that. This is like summer 2017 or no, 2016. And we had no money, just our savings and we spent the summer trying to build A prototype and put it in some shops. And we built it, got like five shops, restaurant or coffee shop signed up and started to see use cases and put it inside of canteens and stuff. A long story short, it worked. And we found out kind of like what a viral element was and what people wanted. And we just sat in those coffee shops and looked at people ordering. And so the experience and that business from 2017 to 2016, probably to 2020, went from nothing to about. It was doing a couple of million a month in GMV. We had about 350 restaurants using it. But it was terrible business model. It was like you hit a slight cut of an average order size was €8. And, um, you didn't own the operation experience inside the restaurant, which is the opposite of what Starbucks.

Greg Dilger: You call that Bamboo?

Luke Mackey: That was called Bamboo, Yeah. Yeah. And that was great fun. Like, it was hard. It was something we found hard to raise 24. And, um, we were looking at competitors in the States. We'd raise hundreds of millions, and here we were like, oh, we've like, 20 grand in the bank account. How are we going to do this?

Greg Dilger: I think the main reason for. I want to talk about Cota, which is your main thing, but the main reason for talking about that is I'm pretty sure Cota wouldn't exist only for your experience in doing and learning a hell of a lot.

Luke Mackey: Everyone is a complete product of the past, and that was definitely something.

Greg Dilger: Yeah. And then following the Bamboo experience, you worked for a brief enough time with Bolt. Tell us briefly what you did there, and then we'll move on to Kota.

Luke Mackey: Yeah. So Bamboo probably ended not the way I wanted it to end, Stephanie. Things I look back at and go, jesus, I wish I was building that business throughout Covid, because that was a prime time to build it. And it was roots to market. I would have taken differently as well. It was probably shouldn't have been a marketplace, more of a services business for the restaurant. But they. Yeah, I went and I had a few choices, like, did I want to go into a big organization and kind of just be lost in the machine and just be in biz ops or be in kind of some of those roles that are traditionally like you come from a consulting role into. Into all those companies, or did I want to go and do something again with high accountability and high responsibility? And I had a few different options. And the one that still always excited me the most and was kind of putting yourself on the line again. Uh, was that Bolt experience.

Greg Dilger: Remind people what Bolt do at that

Luke Mackey: Point in time and even more so now was the largest mobility platform in Europe, uh, for things like taxis, ride sharing, ride hailing, scooters, E bikes and car rental. And they had just hit or about to hit a billion dollar valuation at that point in time. And they had no presence in Ireland, they had a presence in the UK and their presence probably UK was one of the more like Western established countries it was in at that point in time and was mainly kind of like Eastern Europe and the Baltics where it done really well and the Balkans and their whole model is we will just go in and do it as cheaper as possible, as cheap as possible. We can more like a ryanair model versus Uber which is let's spend ungodly amounts of money and let's just enter the market with complete like a two fingers regulator. And these guys took a different way, more of a European approach. And I saw that as like really obviously admirable, but also just the business model in the way they did it was, was, was very interesting. And I loved marketplaces. I love consumer, given my private business. So I joined there in 2020 just as Covid kicked off. I signed my contract and here I was thinking, hm, I've signed a contract with a company that is completely um, reliant on the movement of people and no one was able to move around. So I remember opening up our office, hiring our first members of the team, like doing our first supplies campaign, getting the employees, the drivers on board and thinking about how we're going to go to market and everything. We just couldn't do anything. We had, we were waiting for Esha to come out and say, well, what grade of, of lockdown are we going to be?

Greg Dilger: Yeah, I know, I know. Not like honestly we've all. My memory is very sketchy of all of that, thankfully.

Luke Mackey: It's kind of mad when you think about it. Like we were, we if we put out a Facebook ad or Instagram ad and during that point we get comments under like, can't be incentivizing people to move around, uh, during Coronavirus and everyone else is. There's only players in the market doing this. We're just a new player. But that was really interesting. We launched I think in December of 2020 and we had one of the stronger launches that's been in Bolt history. We did it in tandem with Revolu. Funny enough, there's a guy who worked in Revolu, Brian, he now works in Whoop. He was a user of Bamboo and when I reached out to him I was like, hey, I just started in Bolts. I would love to do something with Revolut to launch this thing. And you're like, you use your product.

Greg Dilger: Yeah.

Luke Mackey: So we hit it off and we talked about how we could launch together. And basically we said, if you use a Revolution card in bulk, you'll give. You. Will give you an extra two free trips. They did a push notification to all of their users in Dublin, and that worked really well. So we flying, we immediately didn't have enough supply. We had too much demand, and we now had to, like, quickly out supply the need of what was going on in the market. And at the same time, you had one competitive market which is free now, and they're like, well, what the hell are these guys doing in our busiest period of the year? So that was great. I learned a lot from that. I learned how they operate. I also had to set up a whole new market for them and deal with all the regulatory side of that, whether it was the ride sharing part, but also trying to bring in two wheels as well. So bikes and scooters. And.

Greg Dilger: And, uh. Do you think while you were working for Bolt, you were still in the back of your mind, you kind of had had an idea to do your own thing?

Luke Mackey: Well, I was still reeling from the first bit, like, annoyed at how that ended and what we could have done differently and kind, uh, of learning from what these guys did. And okay, these guys were like, just so meticulous at certain areas. The way in which they acquired customers was so focused. It was just like, we do it this way and we don't veer from that at all. But I want probably a year in, I realized, okay, like, I'm getting a bit tired of this type of. I really want to go.

Greg Dilger: What was your, um. What did you have a eureka moment?

Luke Mackey: Yeah, a few eureka moments. Like, I had to. When you're a gm because I was GM for the Irish market, you kind of have to do everything. So find, get the licenses, find an accountant, find an office. And our team all asked for benefits. So when we joined, even myself was like, I'm sure I'm getting access to a pension. And there was like, that's for you to settle. Because then, uh, when all the employees came in and said, getting healthcare, right? Yeah, we're gonna set that up. So I had to go and figure that market out. I, uh, came out from two sides. Me being the employee who wanted this myself and me being the employer who had to go manage it. So I reached out to a ton of insurance brokers no one wanted to deal with us because we were a team of five. They were like, it's too small. We'll charge you €10,000 to set up or €5,000 set up. And that's anything to go by. Bolt, Bolt would be like, no, find someone for free. They're getting commission. And over time I found someone. So I found someone on the pension side, God bless them. It was, was just paperwork. It was just like, okay, so here's everything you need to do to help us. Prsa which was the kind of a personal pension and we got a PDF sent to us. We had to download it, fill it out, scan it back. I did that for myself. I asked the team to do it. No one did it. I remember no one did it. Same going for health insurance. We signed up for a health insurance.

Greg Dilger: Why are people so bored?

Luke Mackey: And it's an interesting tensions.

Greg Dilger: Younger um, people are, have no interest in it or don't tend to have it anyway.

Luke Mackey: The attention span of my age group and younger than me even more so. Like I was talking to someone who's a teacher in primary school the other day and the things they have to do to keep kids attention is way worse than, than ours.

Greg Dilger: Is it a bit like talking about wills and stuff like that, but just nobody wants to talk about stuff like that. They know it's important.

Luke Mackey: Well the funny thing for someone is probably that probably you're talking to them way later in life as well. So even their attention span is really uh. If their attention span is battle win win wills. I think like if you look at the comparison. So one of the comparisons I have is when we went in, when I went into the driver hub, which is basically our office where the drivers come in and get support, I'd see the support team on their phones all the time when it was empty and they'd be open up revolut, they put up Reddit and they'd be looking at different stocks or cryptos that they were interested in. So they got really curious about stuff and they were interested in like, oh, this regulatory change is going to happen with Ripple. So I'm going to put some money on Ripple or this stock, the earnings thing, I was like, okay, Jesus Christ. These are obviously financially literate and they, they're interested. But when it came to this thing which is a financial product that follows them their whole and it's something that they're getting tax relief on. Bothered with it. Okay. Even when we offered in broker calls or we were always telling m them I'm doing this and you're going to get 5% match. So that was just like one of those things, like, wow, okay, that's.

Greg Dilger: How long did it take you to, to turn those sort of thoughts and feelings into a business?

Luke Mackey: Years. Um, but if it was, was it only took a few weeks or months for me to be like, I wonder what this would, what would engage them. And that's when I started opening up like figma, which is a design tool and sort of designing of like, what if an employee experience looked like this and they were able to see their funds in this way, or if they were to opt into their health insurance plan this way, or if they ever see their stock options, they can see their salary coming in and all these things, which I probably shouldn't have been doing while I was working. But bear in mind that we were going in lockdowns and stuff. So work was. You kind of, you went to work and then you went home and you just find time to do other things.

Greg Dilger: We're giving both a plug here too. Yeah.

Luke Mackey: I actually started sharing it with friends who were founders. They still had a really good founder network and people who were in, uh, who had built big companies and were scaling like crazy through Covid as well. That was one of those FOMO moments where Covid came in and there was no interest rate. There were really low interest rates and people were raising money and growing really quickly. Ah. And so people who, when I knew them, they had five person teams. When they were during COVID they had 100 person teams. I'm like, okay, how are you dealing with all this scale? How have you dealt with payroll? How have you dealt with international hiring? And when all of that, how do you think about insurance benefit? And they're like, I talked to our finance person, I talked to our HR person and they introduced me to all these people and they're like, yeah, it's a real problem, absolute mess. Um, we don't know. We're not, whatever we're doing, we're not doing it right. Employees don't care about it. And that's really what got me interested. I was super curious about what the world could look like and what it should look like versus what it looks like now, which is completely disconnected. It's run by insurance brokers at a distributor. Insurance brokers are not tech literate. They're completely fragmented. They all hate each other, really competitive. So they'll never use anything that they all have to use. And the insurance companies are being driven by the distributors. So they're being saying, okay, well this broker wants this and this broker wants that. So there's no homogeny. But basically they all live in email spreadsheets. And that is completely alien to how the HR department works or the, or the finance department works or how now employees engage with their money because they're all using far more consumer first finance tools, HR tools and payroll tools. So there's no interoperability at all. It's one of those things that's completely separate to everything else in the organization. So here I was thinking, right, well, it's obviously highly regulated to become regulated. So you have to become regular to do it. If you want to move money, you have to have those, those approvals too. And you want to move money because you want to be able to be a sink. To be a sink and you're going to want to have some sort of infrastructure to the carrier. So I was like, this is a very big business, very big problem. And this is something that's going to take a lot of capital and a lot of years.

Greg Dilger: I can see a lot of reasons why you'd say no.

Luke Mackey: And there was a lot of reasons why we said no. Um, and then we kept coming back to say yes because it was so hard and such a big problem.

Greg Dilger: Kota was born.

Luke Mackey: Very soon after that, Proto was born. My other two co founders had similar experiences. One was actually an engineer, engineering manager in a unicorn and he was trying to hire people and they didn't have anything. And they, they were in their 40s, they were hiring people in their 30s and 40s who had families and they were like, oh, I'm sure I'm getting health insurance. Like, no, I haven't set that up yet. We scale too quickly.

Greg Dilger: He's like, well, okay, so, so it's an interesting idea. Very. And um, clearly there's a problem there which is needs to be addressed and you're, you're all over this, but practically like, what, what do you do then? Like, what's the next stage where, how do you do you assemble a group of people who are going to attack this together? Do you, you obviously formed a company. Tell, tell us a little bit about that.

Luke Mackey: Yeah, so me and Patrick and Packer, my other two co founders, we talked every day about it. And I kind of went away before all of this and I did a ton of research so I would be actually built a pitch deck or if I was investing in the company myself. Okay, say, okay, well, what would this look like if I was going to invest in this business and what are the holes that I would put in

Greg Dilger: at that point, um, you were thinking we're going to need external investors to, to move this thing.

Luke Mackey: Yeah, this is. We're going to have to hire like, okay, a good chunk of people and become regulated and have those expertise which we didn't have.

Greg Dilger: But you'd need money for that.

Luke Mackey: Absolutely. And what I thought so coming back a little bit, I actually was trying to pitch myself and my co founders and my, and people close to me like, hey, I'm thinking about doing this business and here's what it looked like. And I would put it in front of people who are far smarter than me when it came to insurance and brokerage and um, benefits. And I'd get them to stress test it. And I was like, okay, yeah, there's holes, but I can think I can come overcome those holes. Maybe it was a little bit of delusion, but also it was just kind of ambition and knowing that a lot of this stuff is overcomeable. Some of the stuff is industry was industry sentiment. Some of it was the balance of very startup sentiment and trying to find that kind of limit. So finally all three of us decided, let's do this. Let's finish up what we were doing. And um, at the end of, end of 2021, we all finished up our jobs in 2022. We started in Coda and uh, we had this deck and we had all of this research that we'd done. We had about 60 to 70 calls recorded with h people about the, the thing and we had a ton of like citations around the market and where we thought the, the, the, the problems were and the opportunities and we tried to raise I think 600 grand.

Greg Dilger: Okay. A friends and family, friends and family

Luke Mackey: come around an angel round. And from uh, Bamboo I had kind of people that were close to that were already said they wanted to f back on this thing. And I went, I had this deck and I had all this thing and I just said hey, I'm doing this new thing. We love to love to chat to you. Yeah, send them the deck and all beforehand. And that kind of spiraled. So I was trying to raise 600k. I had a bit 600k committed from angels. In about a week or two, um, that deck went viral within VCs. So VC angel started sharing a VCs and going does this sound good to you? And they go, yeah. And they started booking time on my calendar just okay, uh, without my consent and saying, hey, we're this V, we're, we're this pre seed fund or this. We love what you're doing. Can I just ask you a few questions? We'd love to lead you around. That was happening within another week or two. So within about a month we had well over the money committed. We had about 2 million committed or more. Then we had VCs on top who were trying to give us another 2 million. So we could have raised like 4 or 5. We said, we're not doing that. We have to completely readjust our valuation and say, okay, Instead of raising 600k at 7 million or 8 million, whatever we're raising at, we said, um, we're going to raise 2 million at a 14 million valuation or 50 million valuation. So I think just under around 10% of the business, 11% of the business. And we had capital and dry powder to go. Okay. We actually be a little bit more ambitious than what we thought we could be here.

Greg Dilger: Okay.

Luke Mackey: We're not just going to try and build it to try and get to somewhere at the end of next year, we'll have three years of Runway to go and get to where we want to be and find some of them in the product market. Fit, uh, with a certain ICP or a certain icp, like a customer base that we thought would be suitable. So that's where we started. And then I don't know if I can go on a little bit about how, how that went, if you like.

Greg Dilger: Well, I think, I think would be. Again, want to talk more and more about COTA, but just about the VCs for a while. Like, uh, venture capital companies. We've got a fairly vibrant scene, uh, in Ireland and in Europe now. A lot of VCs are looking to invest in those types of businesses. How did you find your engagement with them? Did your early engagement actually, did they question your deck and suggest other things that, that you adopted or were they simply saying how we love it and

Luke Mackey: we're, we're in, uh, total. Obviously it was. Beat the crap out of me.

Greg Dilger: Okay.

Luke Mackey: On that stuff and, um, test us on these things. But the first investors, these that reached out to me were not Irish investors.

Greg Dilger: Okay.

Luke Mackey: German and British and Dutch.

Greg Dilger: Did they fight over valuation? No. Okay.

Luke Mackey: Particularly like most of these rounds are pretty, like they're, they're in and around a range.

Greg Dilger: Yeah.

Luke Mackey: And if you're outside that range, that's when they're like, oh, that's a spicy valuation. But if you're in the range of, like you're selling 10 to 15% of the business at this round, that's all pretty normal. But we, yeah, like there's an incredible ecosystem outside of Ireland for probably from pre seed to series A bit to series A money that are. They're far more connected sometimes than RVCs. Um, they've pattern matched what really great looks like as well. So when we came in we had probably five or six offers from funds. One being Frontline in Dublin who uh, are exceptional. Another one being um, North Town in the uk. Um, and Norton had done Personio, which is a big HR tech. They'd done True Layer which is a fintech. They'd done Klarna, which is a big fintech. We're m like okay, well these guys know a great look.

Greg Dilger: You're getting free consultancy here.

Luke Mackey: It's effective. It's like them going, okay, well you guys. Yeah, guys, that's, that's nice that you've done that and that's nice that you think that way. But like why do you think this is what we think? Great, good. Looks like here's a constant reorientation of what's happening.

Greg Dilger: They make you more ambitious, do you think?

Luke Mackey: 100%? Yeah, yeah, yeah, totally. That's what, that's definitely One thing that VCs have done at international VCs I would say have done that. And Frontline, I put in that bracket too.

Greg Dilger: And what did they see in Kota? What did they see? Obviously it'll be pretty like what you see. But presumably a scalable was really important to them and international.

Luke Mackey: And yeah, ultimately it's a really big business that's been services, LED and consulting and this is uh, sorry, really big market. And they're looking at this and going, here's a really big market that could be opened up to be m far more scalable, far more, far more international than it is at a way higher margin. M still with all the services part of it, the consulting part of it. But for those who need it. And there's plenty of examples of people who have done this before and they're saying we've actually done more. I remember one of the GPS of one of the funds jumping on one of the calls and then pitching me and going, listen Luke, here's why we're the best one for you. We have armies of people who have done analysts who've researched this industry. We spent the last three years trying to find a company that looks like you M and we haven't found it until today. M. We have invested in this business, this business and this business. We can bring this angel investor along and this angel investor along with you, this angel investor along too. We'll do it at whatever valuation we want. But honestly, here's a very fair view of the world and why we think we should be part of it together. And that helped a lot in the first couple of years and then we went on to raise again. So we've raised about 25 million in total. I can chat a bit more about how that journey went to and where we got to that point.

Greg Dilger: Well, we might go back on that one. But can I ask you, uh, Luke, the. You've got fairly significant money on board now, some great investors and people who are believing what you're doing. What about sort of pressure and stuff?

Luke Mackey: Don't necessarily need the investors put the pressure on us. Uh, I definitely put the pressure on myself. Yeah, myself. I sometimes do it just because for her reaction, I quite like the chaos.

Greg Dilger: Okay.

Luke Mackey: That's why I'm here doing it. Otherwise I would be doing something different. But yeah, I think. Well, first things first. It's. It's by building something love and is valuable to them. So as long as we're. That's where most of the pressure comes from. It's not from VCs or from any. That it's uh, product quality. It's product quality and it's a service experience. It's building something that is obviously extremely valuable to the employee, it's affordable to the employer and doing at scale and basically finding that area of the market, the aperture you can sell into. We've done that for the last two years and started with a very narrow subsection of customers which was just small businesses in the UK and Ireland. And we got license in both those markets. We've built a layer of infrastructure into the carriers, a small number of carriers and we built a good product on top, getting better and better and better. And we've actually got two products now, so we've got a product we sell to small businesses. So we go spouse directly to the HR people or finance people. And the reason they look at what we do and they go, uh, okay, well this. I no longer have to pass files back and forth to brokers or insurers. I no longer have to deal with errors, no longer have to manage invoices. I can see a bird's eye view of everything on my dashboard. It syncs to our workday or our HR tool thanks to our payroll. So basically just works in the background and I have full autonomy of.

Greg Dilger: How are you essentially selling to a company? You're selling to a company, obviously the employees are benefiting as well, but you're selling to a company and you're saying to them, we can make this a much more pleasant experience for you and we can make it cheaper for you as well. Is that essentially.

Luke Mackey: Yeah, they don't have, we don't charge the same fees that you typically see from other.

Greg Dilger: Ok, so there's a price thing. There's a price thing here.

Luke Mackey: There's a price thing and there's a value thing. Yeah.

Greg Dilger: Okay. And I can see why small companies, and particularly maybe with a tech, uh, bias might be first adopters for something like which they were. But have you, you been able to remove an existing provider from a situation where you've come in and taken them out and. Yeah, yeah.

Luke Mackey: And that's. You see that more as you go more into this, into the medium size. So our average company previously would have been sub 20. Now M. Our average company is over 40. Our biggest company is 1500 people and they're not tech. Our smallest companies or some of them are anything from like marketing agencies, you see kind of services businesses, you see factory work, you see mix, complete mix.

Greg Dilger: Is there any reluctance there to give their data and their very important stuff to a startup company?

Luke Mackey: Essentially when you say obviously we're regulated so we have to have our own controls in place, but we're also because we're tech first, we have to have a ton of, ton of scrutiny put on us anyway. So if we partner with HR provider, HR tech provider, we partner with an insurer, they want to see all of our controls, they want to see all of our policies. We are ISO 2712 and uh, one of the first people we actually hired within the first founding team was um, our head of compliance. Even before we regulated we were putting all these things in place. So yeah, you will see that. But I would say we've probably more scrutiny put on us than the offline guys because of that, because we're moving data and money around.

Greg Dilger: Luke, you, you were saying earlier you have two products here. Can you explain to me what two products are?

Luke Mackey: Yeah. So all sitting on our underlying licenses and our tech with what we sell to HR person and the finance person in this, in a SMB which is like our customers or anything from as I said like 50% companies to a thousand person companies and UK and Ireland is really where we are. And it's like a deep vertical of retirement products, health insurance, life insurance, income protection and everything from mastercards you can give your team to flexible benefit enrollment. So we do all that. That's sub 1000 companies there. But it's, it's. That has kind of that hockey stick growth then the other product is what we give to Hortex. So think of the most obvious one would be something like workday. But we have uh, integrated it and embedded into companies like remote.com, payfit. We've uh, done the likes of a company called Globally Slash Helios. There's a lot of that we've grown this year and that's kind of meeting the customer. They are and the customer is either going to be syncing to our tech or we're going to be inside of someone else's tech. So someone else's platform. That business has grown quite rapidly as well. And that's a really international business. So we serve um, we have policies in over 100 countries with that business.

Greg Dilger: Salespeople like you, you're in the market for salespeople like what, what does sales look like in, in your world?

Luke Mackey: I come from a background where um, I'm typically the salesperson.

Greg Dilger: But how are you selling you on the phone? Are you emailing?

Luke Mackey: We've moved on from founder led sales anyway, so I'm no longer the one.

Greg Dilger: I mean you, the company. Yeah. You got people who are very good at that.

Luke Mackey: So we've got on um, the S and P business. We've got Matthew who leads our sales there and we have Trevor who leads our insurance there. Um and that's just two parts. We're going to companies like we're selling a job or a tech product. Um, and that can be anything from outbound email, cold calling, just good marketing and retargeting. They'll we'll be able to capture our leads and could you gather a group

Greg Dilger: of them in a room and do a tutorial?

Luke Mackey: Very good. Yeah, we actually do that. So a lot of stuff we do is actually um, events. So there's breakfast or dinners. Like we had order enrollment coming into Ireland now and it's coming in and we've been doing roadshows around the country where we have breakfasts with HR people and we organize a breakfast whether it's in house in Dublin or then in core and we bring 10 to 20 HR leaders together in a room. And firstly it's kind of chance for them and checking out with them but then they're asking what do we do?

Greg Dilger: What do we do? Okay.

Luke Mackey: And uh, we talk about the product there and then we do things like dinners and that's just a nice way for these people to connect. And most of the time just like, please tell us what you do because we actually really intrigued. We have A really bad solution here.

Greg Dilger: And what about, like, quality salespeople? And, you know, you're in the business of hiring really good people. Like, how do you attract them in?

Luke Mackey: So everyone who joins CODA gets stock options in there, so they're going to have ownership.

Greg Dilger: Okay.

Luke Mackey: So they have the option to buy shares at a discounted price, basically. And some people have joined the company when we were 10 people, less than 10 people. And that stock price is sort of 5, 5, 6, 7x. And they all have discounts on that stock price too. So they're getting actual discount compared to what, uh, an investor would pay. So it's a really good deal for them. And then we do pay essentially market rate, so we know we're competing with in Dublin in particular.

Greg Dilger: What's an ideal salesperson? Age experience? What, Would you like to walk in the door there now? Okay.

Luke Mackey: Age. I think people who know they have something to prove, know, uh, they have to work hard, know they have to go and it's full cycle. Whether you're a BD or an ae, you're going to have to pick up the phone, you're going to have to go and book your own meetings. You'll have meetings booked for you sometimes, but some, most of it, like, you're going to have to fill your calendar.

Greg Dilger: Yeah.

Luke Mackey: So you don't have people who rest under laurels. You have people that have a really high ceiling. And that's what you're looking for more than anything. You're looking for someone who's ambitious, curious, wants to work really, really hard and has and is brave. We've hired people that are just out of college, gone into say, uh, a bank to do an internship. And they applied for a job with us. We saw something in them, we put them there. And they're some of our best BDRs now. And the trajectory we're seeing them on is great. So this is kind of what we're looking for.

Greg Dilger: And what about your international development in terms of. Would you be hiring salespeople from other geographies?

Luke Mackey: Presumably as well, a mix, yeah. So, um. Well, the company right now. So the company is 50 people. We started the year at 21 people. So we've grown quite a bit this year, grow again. We'll double next year. Probably over 100 people. And we have employees in 10 countries, two offices, one in Dublin and one in London. And that's where sales, marketing and ops would be. Engineers can be remote completely, and product can be remote.

Greg Dilger: Okay.

Luke Mackey: Um, but we like to have sales in the office because there's great energy. It's, uh, osmosis from what people are saying and solving problems in real time. It's building culture. And that has just worked really, really well for us, and we'll continue to do that. So in terms of sales, we're probably. We only right now sell into the UK and Ireland. But our, our embedded business, our kind of stripe, like business is quite global. We're selling to platforms who are usually American platforms.

Greg Dilger: And have you got, you know, the way you've got. You've got your regulatory clearance here in Ireland.

Luke Mackey: Passports. Right. The EU, and we have the U.K. uh, authorization there as well. So we have the U.K. and then we have broker partners outside of Ireland.

Greg Dilger: Okay, Luke, if I was to ask you what's, um, on your dashboard at the moment, as in you go in every day, what are the key things you're looking at in big priorities in

Luke Mackey: your business as well, I think one thing we're probably not good at is dashboards. We have data scattered everywhere. In terms of virtual dashboard, then what do you really. Yeah.

Greg Dilger: What scares you as well, in terms

Luke Mackey: of mps, like, it's the, uh, Net promoter score. Sorry. So it's a satisfaction of our customers. And we ask them when they onboard, we ask them at different cycles.

Greg Dilger: How's it going?

Luke Mackey: If you could rate coda to 10, or would you refer coda to a friend? We track that meticulously. And if someone says no, we'll reach out to them and go, how can we correct this? And we build our products around that.

Greg Dilger: What little breakthroughs do you love? Like, small things.

Luke Mackey: Some things that we've seen a lot is we've had customers that we spoke to a year ago that either didn't get us or we didn't meet their need a year ago that we're jumping on calls with now. And they're sitting back and they're like, they're laughing at just how exciting this is for them and that are now becoming customers. They're going, wow, okay. They didn't think this exists. Like, uh, we quoted like, I cannot believe this existed. I wish I knew about this earlier. That's been great.

Greg Dilger: Yeah.

Luke Mackey: When you're saying, okay, we're obviously. There's obviously evolution of the product, evolution of us. We're becoming better at what we do and our products meeting the need better. Or they're going, yeah, this is an obvious choice. Absolutely. Sign a contract. That is very, very exciting for us because we were. We weren't able to sell to those customers. That's us going more into the medium size.

Greg Dilger: Look, auto enrollment is a big thing. It's coming down the tracks of weeks away. I know. Maybe it's convenient that you're here a few weeks in advance because it's a reminder to people where's the opportunity for you guys, uh, in that auto enrollment?

Luke Mackey: Well firstly, if you're only thinking about it now, it might be, it's quite late. So this is something we've known about for a while. Like even when I was that initial pitch deck I told you about, when it was bolts, we knew autonomous coming, we knew there was a million people that are going to be put onto a pension. Um, and it's the best, honestly. Like it's essentially a national savings scheme. People who are um, not on pensions. And it's also forcing employers to contribute, which is we should have done a long time ago. But for us there's, there's two sides. There's like the public scheme which is really suited for maybe lower paid workers, workers who maybe be a bit more transitional, move out of move roles and also companies that just never consider it, never know how to approach the market. That's been working quite well for them. And then there's occupational pensions, which is a traditional kind of system in place for workplace pensions. That's what it's usually master trust, if you're probably aware of them. And none of them, none of them are reset up to meet the need or the requirements that uh, the government have put in place to make sure that you don't fall and your employees don't fall into that public scene. A lot of it is actually around things like auto enrollment, minimum contributions being in place and having the right data and we've rebuilt a lot of that. So we spent some time earlier this year really looking into the granularities of nirsa, which is the organization who sets those up and building the product to meet that need. So that when we spoke to customers we knew that well they're going to be. Employees will be enrolled in time, they'll be able to hit the minimum, minimum contributions we met the thresholds will be there and employers don't necessarily need to worry about oh, this employee didn't enroll in time and they broke it in all the time. And now they've got two pension schemes, they can't enroll the other one. And the employee's contract says this. But what they're contributing is this. And that can be a mess. We've built around that. We've obviously had a good bit of traction this year when it comes to

Greg Dilger: Order enrollment the investment options at the end of the line here on the employee signs up, they have some investment options. I imagine they are. It's going to be ultimately investing in equities or bonds or conceivably property and all the various asset classes. What investment options currently reside on your platform? Uh, and what, what do you expect it would look like going forward?

Luke Mackey: Yeah, it's a good question. So we've relationships with all the older pension providers now in Ireland. So whether it's an Irish Life or a Zurich, you as a uh, as an employer, you can bring that scheme with us to us and they can manage it inside of Coda or you can transfer over. And whether it's staying with your existing funds or you want to, want to, you want to look at other options, you can do that too. Typically what happens is you're putting a lifestyle fund. So if you're younger you'll be put into higher risk bucket. Maybe that's just more equities. But if you're older, when you say

Greg Dilger: you'll be put into who the employee? Yeah, ah, the employee will decide for

Luke Mackey: them as to by default they're usually put into.

Greg Dilger: But uh, what do the employees when they're getting in, do they need help to actually make that decision and who gives them that?

Luke Mackey: So you probably think about it sounds like we're just like this tech platform we don't get. We have like five or six consultants on the team that are all uh, that are APA or QFA'd and they're all been in insurance and benefits and retirement for a lot.

Greg Dilger: So you've got real people supporting you here.

Luke Mackey: Yeah. And they're part of the onboarding process with not only the company choosing what they want to do, but then with the employers, sorry the employees in a group level and then at a one to one level. So you can literally jump in to our app. Um, you can say you want to go with this route or I can talk to a consultant in real time and chat with them about a product and then you can change one type. Okay, that's going to get a lot deeper. So that would be a lot more able to change more readily as well.

Greg Dilger: Just getting close to the end, your business model really knows. How do you make money?

Luke Mackey: We don't charge high fees because everything is APIs which is just automatically passing data back and forth. Yeah, we don't have to, we don't have high level of operations or admin in the business so we don't have to go and cover those costs. Um, we're also venture backed so we can move really quickly and build really quickly. And so we charge a subscription fee typically which is like less than €9 per employee per month. And then we earn commission from various different jurors as well. As you would as a broker, say, it's just standard commissions give us so. But most of our revenue is made up by that. On, um, the enterprise business. We have larger license fees with our platforms we work with, but that's because we're obfuscating quite a large amount of administration and adding a whopper amount of scale the business that they didn't previously have.

Greg Dilger: Okay. So it's definitely going to be a cheaper solution than what they're currently using.

Luke Mackey: Charging per hour. We don't have that kind of business. It's very straightforward per seat. It's not like we're charging per hour. We don't have technology fees or consultancy fees in place either. That's worked quite well for us in

Greg Dilger: terms of customer traction and all that. What kind of momentum have you got going at the moment?

Luke Mackey: This has been a huge year for us. So I look at where we started, the year ended last year, we were sub 1 million of annualized revenue. If I look at where we're going to be probably by the start of next year, just by January or February will be eight figures of annualized revenue. Wow. So the business is growing really, really quickly. And that's just partly down to what I said. It's like focusing really deeply on the customer, focusing really deeply on the products. And then when you kind of open it up and start talking to the, to the customers, we think we feel where you suit them best, whether that be the medium size, whether that be the platforms you work with. It's just like speaking their language like this is, this is what we needed and evolve around that. So in the last, say second half of last year or this year, sorry, we probably added more logos than we did in the other the last two years of the business and that's not slowing down. So, uh, we're looking at our planning for 2026 and we're still planning on getting or quadrupling the business next year too.

Greg Dilger: Okay, Luke. We're trying to keep these things not going too long. I think it's a good time to um. Paul, it, it's been, uh, lovely to hear from you. It's really, really interesting. I'm glad I found you. Thank you, Bobby Kerr, for that. It's a really good story. Exciting story. We're mad into entrepreneurs here. In Renatus, and we certainly got one here, so best of luck to you going forward.

Luke Mackey: Thanks, Greg.