A $billion+ fintech unicorn nobody has ever heard of. This just reminds me that opportunities abound, especially to focus on particular workflows that are sometimes buried in the b2b world...
Not every tech company needs to be some obnoxious, loud weirdo pretending to be the second coming of Jesus Christ. Some people just want to make money.
Tech journalism really covers consumer tech. Its purpose is to generate clicks, not actually educate people about the tech industry. Unfortunately, no one clicks on articles about B2B success stories.
> nCino is a leading global provider of cloud-based software for financial institutions. We empower banks and credit unions with the technology they need to meet ever-changing client expectations and regulatory requirements, gain increased visibility into their operations and performance, replace legacy systems, and operate digitally and more competitively. Our solution, the nCino Bank Operating System, digitizes, automates and streamlines inefficient and complex processes and workflow, ...
It's built on Salesforce. They serve mostly mid-size regional banks. It's honestly super cheap for what it is -- its no wonder they're gaining as much traction as they are.
I’m curious to know how they deal with many of Salesforce’s governor limits or if they have a plan to scale. Salesforce is not a platform you can scale your business on. Unless this is some sort of Managed Package you install?
Having been part of the Wilmington, NC startup ecosystem for some time at Untappd [1], I'm fairly certain that nCino is a spinoff of Live Oak Bank [2][3]. Also, another spinoff from Live Oak was Apiture [3][4].
As a former resident of Wilmington, this is incredibly pleasing to hear. The community has been striving hard for the past decades to move away from the concept of "just another beach town". I used to use the phrase "You get to live at the beach, now earn it" to motivate my students.
While not as prominent, Wilmington, NC is also home to Castle Branch [1], which initially started as small background checking company; GigSalad [2], which allows you to book various performers; and Lapetus Solutions [3], which uses facial recognition for health insurance purposes.
I can imagine that intense financial client needs (not to mention working with the confines of SFDC) could easily give this type of company a much less positive culture. Are there specific things leadership have done culture-wise that have made it such a positive place?
There's some discussion in this thread about the less-sexy corners of the market that are getting eaten by software. What I'm wondering about is whether these corners yield the incredible levels of profitability that we've seen in the past from the tech industry. In other words, with something like Facebook, once the basic product was operational, every additional million of users came with negligible acquisition costs. With something like SAP, every new customer requires a gargantuan integration effort.
So what I'm curious about is this: It might be true that there is a long tail of industries that remains to be eaten by software, but do we expect the software in those industries to be as scalable as it has been in "tech"?
While subscription revenues almost double every year since 2018. This is also highlighted in their risk factors.
What this indicates is that the deployment of such software still needs significant human touch.
Based on the services revenues and the sales expenses, I am hazarding a guess that nCino is a high touch businesses requiring significant sales professionals.
Which is why, it is key to understand customer retention in such businesses. From what I see, they have a 147% subscription revenue retention rate. That might be a proxy to customer retention but I'll try to get their actual customer retention numbers to be on the safer side.
Overall, yes this is no Facebook or Google. The risk section of S1 is very good and the founders are pretty candid about what the investors are up for.
1) The growing divergence between the subscription and PS revenues strongly imply that a "land & expand" model is prevelant (2018 1.9x, 2019 2.3x, 2020 2.95x) where they are able to push subscriptions up 21-28% post-deployment.
2) PS margins were 9%-10% in 2018 and 2019, and then dropped to 5.4% in 2020. Good to know that management continues to view PS as a sales enabler that pays for itself (i.e. break even or at least single-digit margin) executing their primary mission to drive high-margin subscriptions.
I was dating someone who worked at nCino as a support engineer, they absolutely are keeping most of their customer base by just providing tech support help to the managers at the banks that have problems clicking shortcuts. It's not too unsimilar to a company like ESRI, except their product is built on Salesforce and not nearly as widely needed as Arc.
Also something to keep in mind is this is selling to large financial institutions, not small businesses. They have 290 customers, who each pay pay ~$480K/year on average in subscription revenue. nCino doesn't need millions of customers, so its sales and support model is built to attract and retain a relatively small number of customers. It's common with large enterprises to see a decent amount of professional services revenue because keeping your existing customers happy is paramount, since churn matters a lot more at these contract values and customer acquisition is a longer process that goes through procurement, bureaucratic red tape, longer implementation, etc.
It happens. Enterprise SaaS takes a lot of capital, there were probably ups and downs, and between all of that you can take a ton of dilution. Just the cost of the enterprise game with its highly predictable revenue streams.
Readit News
So yes, opportunities abound and not all pf them are discussed in HN.
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Remember that admin permission clearing command accidentally committed in Production last year that killed hundreds of SFDC orgs last year?
What I'd do to listen to that bridge call..
[1] http://www.wilmingtonbiz.com/technology/2020/06/19/whats_nex...
[2] https://www.forbes.com/sites/amyfeldman/2016/01/10/fast-grow...
[3] http://www.wilmingtonbiz.com/banking_and_finance/2020/06/22/...
[4] https://www.starnewsonline.com/news/20180502/tech-company-ap...
Within the local entrepreneurship community, they're recognized as being very successful, but most people who live here don't even know who they are.
They've done a nice job, and they deserve this. Congrats team!
While not as prominent, Wilmington, NC is also home to Castle Branch [1], which initially started as small background checking company; GigSalad [2], which allows you to book various performers; and Lapetus Solutions [3], which uses facial recognition for health insurance purposes.
Also, hi Sam, don't internet stalk me.
[1] https://discover.castlebranch.com/
[2] https://www.gigsalad.com/
[3] https://www.lapetussolutions.com/
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Also, how would you explain your company's business in a couple of sentences, without any marketing/PR fluff?
How much have you consistently lost with this strategy?
So what I'm curious about is this: It might be true that there is a long tail of industries that remains to be eaten by software, but do we expect the software in those industries to be as scalable as it has been in "tech"?
PS revenues: 2018 20,094 2019 27,076 ~35% 2020 34,915 ~27%
While subscription revenues almost double every year since 2018. This is also highlighted in their risk factors.
What this indicates is that the deployment of such software still needs significant human touch.
Based on the services revenues and the sales expenses, I am hazarding a guess that nCino is a high touch businesses requiring significant sales professionals.
Which is why, it is key to understand customer retention in such businesses. From what I see, they have a 147% subscription revenue retention rate. That might be a proxy to customer retention but I'll try to get their actual customer retention numbers to be on the safer side.
Overall, yes this is no Facebook or Google. The risk section of S1 is very good and the founders are pretty candid about what the investors are up for.
1) The growing divergence between the subscription and PS revenues strongly imply that a "land & expand" model is prevelant (2018 1.9x, 2019 2.3x, 2020 2.95x) where they are able to push subscriptions up 21-28% post-deployment.
2) PS margins were 9%-10% in 2018 and 2019, and then dropped to 5.4% in 2020. Good to know that management continues to view PS as a sales enabler that pays for itself (i.e. break even or at least single-digit margin) executing their primary mission to drive high-margin subscriptions.
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It's not flattering if retail investors prefer your stock over institutions.
Edit: The exception being Tesla. But Tesla's really different.