‘Give us the rules. Whatever the rules are on Brexit, we will deal with it’
The Gocardless founders tell James Cook how learning from mistakes was key to their success
They may only be in their early 30s but they are already the closest thing London’s technology scene has to rock stars. The three Oxford graduates behind Gocardless, the Farringdon-based online direct debit business which processes more than £5bn worth of transactions a year, are among Britain’s most successful tech entrepreneurs.
Hiroki Takeuchi, 32, remains chief executive of the company but cofounder Tom Blomfield, 33, has gone on to start banking app Monzo, and Matt Robinson, 30, is chief executive of property start-up Nested.
Between them, the three men have raised almost £200m in funding, inviting inevitable comparisons to Silicon Valley’s so-called Paypal mafia, a group of former Paypal founders and employees who went on to create businesses including Tesla, Linkedin, Youtube and Yelp.
Six of them, including Elon Musk, are now ranked as billionaires. Gocardless’s founders may be Britain’s closest equivalent but it hasn’t all been plain sailing.
“I just don’t think we knew what ... we were doing when we started,” admits Robinson, recalling the early days after they launched Gocardless in 2010 – just two years after graduating from Oxford University and a brief spell working as management consultants in the City.
The first version of the business was Grouppay, a way to split household and sports team expenses. Gradually, this evolved into Gocardless, an online direct debit provider which lets businesses and freelancers easily set up recurring or one-off payments without the need for credit or debit cards. At first, success was elusive, admits Takeuchi. “We made a lot of mistakes,” he says.
One challenge for Gocardless was making its branding too complicated. “In the very early days the strapline on the website was ‘next generation payments’. We refused to put direct debit on the home page,” Blomfield says. “It turns out not many people search for ‘next generation payments’.”
Perhaps the most significant point in the company’s early history came in 2011, when the three co-founders travelled to Silicon Valley to take part in Y Combinator, a respected technology “incubator” programme which invests in start-ups and provides them with mentoring, as well as a taste of Silicon Valley life.
Start-ups that take part in the programme are coached by technology industry heavyweights including Paul Graham and Sam Altman, before a “demo day” where the young companies pitch their businesses to a room full of investors.
“The sessions with Paul Graham were infuriating, and demo day itself was quite a rough experience. I got really frustrated because they talked in mantras and heuristics and you were like ‘I just want you to give me the answer’,” Blomfield recalls.
“They just had these super highlevel things like ‘write code’ and ‘talk to users’ or ‘you should be growing 10pc every week’. Like, we’re not! Well, go fix it. [Graham] could be brutal.”
Blomfield says it was life-changing: “At the time, it was what we needed, but it just felt uncomfortable.”
Eventually, the three men came back to London and continued building the business in the UK. Gocardless had raised some seed funding, but it needed more money to grow the business. One east London technology fund, Passion Capital, has funded Gocardless as well as both Monzo and Nested.
Eileen Burbidge, partner at Passion Capital, said that she met Gocardless’s founders when they moved into Passion’s office in Farringdon.
“We had a meeting with them and heard their pitch, but embarrassingly we didn’t go for it. However, in the months to come, we would see their progression plotted on monitors and whiteboards they’d set up by their desks.
“Eventually, [Passion Capital partner] Robert [Dighero] couldn’t resist any more and asked to sit down with them and chat again to find out how they were pulling off these great charts. After that session and a further follow-up with all three of us, we decided to invest after all.”
Gocardless was growing its business and had picked up enough investment to hire more staff. But Blomfield wasn’t happy.
“The company was going OK but not great and none of us had titles. We were all just ‘co-founder’ so any decision required a three-way debate, which was sometimes very fun and sometimes very painful.”
A meeting was called to figure out who would be the company’s chief executive. Blomfield, however, had other ideas.
“We had the agenda set out, everyone sitting around the table, and I was like ‘I’d like to add another item to the agenda. I don’t know where we put it, but I think I’m going to have to step down’,” he recalls.
“The three of us just went and drank a load of gin. I actually didn’t know what I was going to do next.”
Blomfield left the company and briefly worked for a dating business in New York before setting up Monzo, the London-headquartered banking start-up which has become one of the UK’S leading fintech companies.
Robinson also left the company several years later. “We sat down a fair bit before I left and just said ‘look, I don’t want to be doing this for the next five or 10 years’,” he said.
While Gocardless has been a glittering business success, the story has also been marked by personal misfortune.
Two years ago, in September 2016, Takeuchi was paralysed from the waist down after a cycling accident in Regent’s Park, forcing him to undergo months of rehabilitation, and prompting Robinson to temporarily rejoin the company. “I started thinking of myself as the harbinger of doom,” Robinson said. “Every time I went back in to announce anything to the company it was like ‘oh God, what’s happened now?’”
Takeuchi returned to Gocardless four months after the accident that has left him in a wheelchair, and continues as the start-up’s CEO.
The three men are now running three of London’s most promising start-ups and also happen to operate in three highly regulated industries. However, uncertainty from Brexit isn’t a major concern, they say.
“There’s these other 15 things that are much more likely to kill us first,” Blomfield says.
“Politicians, go and figure it out and then give us the rules. Whatever the rules are, we will deal with it.”
Gocardless’s founders aren’t directly investing in a new generation of start-ups in London, but see their success as a way to help founders who follow in their footsteps.
“The best way that we can contribute is by creating the most successful company possible and then seeing those people go on to do bigger and hopefully better things,” Takeuchi says.
Despite that pressure, he is still modest about the three men’s success. “The biggest problem we’re solving is not being management consultants,” he jokes.
‘We refused to put direct debit on the home page. It turns out not many people search for next generation payments’
Hiroki Takeuchi, Tom Blomfield and Matt Robinson (left to right) have raised £200m of funding between them since starting the online direct debit business Gocardless eight years ago