This Fintech Founder Shares Why Economic Downturns Are Positive Environments For Startups, And What 2023 Will Bring For The Industry

Times are tough, and companies are bleeding. Not only is funding far less than last year, but many businesses are having to cut expenses and staff to stay afloat as profitability becomes king. It’s not all bad news, though. Economic downturns prove difficult for all businesses, but they can be positive environments for startups.

According to Martin Hegelund, economic downturns mean that companies are forced to do the right things due to a lack of funding. He also points out that there is less competition for customers and talent in tough times. The following questions answered by Martin Hegelund, co-founder and Chief Marketing Officer of Ageras Group, address his entrepreneurial journey, startups during economic downturns, and what he thinks the future holds for the industry.

Grit Daily: Tell us about your entrepreneurial journey. How did you start as an entrepreneur?

Martin Hegelund: My journey as an entrepreneur started when I launched a network of websites back in 2005 at the age of 13. It started just for fun with just one website, but I got hooked on everything you can do with the internet. I believe the internet is the most important invention since electricity as it enables so many new services and amplifies knowledge at a rate we have never seen before.

With this task in mind, a small team of freelancers and I continued to launch new websites and digital services, such as ad-based websites, catalogs and online stores. I used the internet as a sandbox to continue learning from my many mistakes and worked hard to become exceptionally good at building digital services, bringing them to market and monetizing them through transactions or subscriptions.

Grit Daily: When did you come up with the idea for Ageras, and how was the company started?

Martin Hegelund: I started my first projects while I was still in school. After doing it as a side hustle for five years, I met Rico Andersen, with whom I founded a marketplace for household services. After working on that project for two years, we had used all our savings and even taken out a loan to finance our investments. But our pure C2C business model proved unsustainable and we had to shut down.

But now poor in cash but rich in new learnings, we found that we were a good match to work together, we had become good at building marketplaces (but wanted to do this B2B instead) and most recently we reflected that we as non-financially savvy entrepreneurs had nowhere to get an overview of our finances.

So we started by building Ageras, a marketplace for accountants and business advisors, and scaled it to most of Europe and the US. Later, we added accounting software with the aim of having a solution where you can always be on top of your business – whether you work with an accountant or not.

Today, we are in a completely different phase, now that we have a more comprehensive offer including commercial banking in certain markets – and have also served a million businesses globally.

Grit Daily: You have used an aggressive M&A strategy over the past year. How does it work in tandem with your executive mindset?

Martin Hegelund: We want our software to be at the center of a business owner’s everyday life. So while you can use our lightweight accounting product, Zervant, worldwide, to create real value for our customers, we need to have a very strong local focus.

It will take years to build software that has all the specific customizations for each market, so we have selected a few core markets where we have acquired a very strong accounting platform which we then use as our main product in that market. In addition, we want to acquire more niche functions that we build into our software worldwide.

Of course, we build features and products ourselves, but to have true global scale, we need to make acquisitions to expand our service offering at the pace we want.

Grit Daily: What are your best predictions for the fintech field in the next 6-12 months? What “trends” do you see falling by the wayside?

Martin Hegelund: Recessions really cut fat off the bone and in a high-growth area like fintech, I think this will be even more evident. We will see customers cutting back on spending and investors cutting back even more, meaning that only the most value-creating products will survive.

When money is no longer “free”, we will see highly speculative projects where they either inherently do not create value, are very risky to implement or the potential upside is too far into the future falling to the ground.

The winners will be the ones that actually help their users – and I think fintech in general is poised to come out stronger on the other side of this downturn. Businesses and consumers alike around the world will be looking at how to optimize their spending, money management and income, and there are amazing fintech inventions that will now see an increase in demand – and more to come – to facilitate that.

Grit Daily: Where do you see the biggest opportunities in fintech going forward, from both a founder and technology POV?

Martin Hegelund: I think we have only seen the tip of the iceberg in B2B fintech. There are already companies working to include traditionally “unbankable” segments in the digital financial infrastructure. The costs of payments are heading towards zero. There are already countless apps for financial planning and investing.

On the other hand, businesses worldwide rely on multiple systems, manual processes, etc. to facilitate procurement, invoicing, payments, accounting and banking. It leads to wasted resources and a high risk of making mistakes.

B2B may not be as “sexy” as the number of users and brand recognition is often less than in the B2C space. But the financial upside (both for customers and innovators) is so much greater.

That’s why I think our place is so much more interesting to work in. We can see that we save hours of work every week for small business owners. It makes a difference, which is why they are extremely loyal customers.

Grit Daily: What would your top tips be for other fintech entrepreneurs just finding their footing?

Martin Hegelund: Building a fintech company is tough. You need to launch quickly, get feedback from early customers, experiment quickly with your business model and find the benefit and product market fit. Disruption in fintech is fast, while time to market can be slow, and if you don’t have a true advantage and a business model closely aligned with the value you create, your company may just be “a feature” in some other product tomorrow .

Grit Daily: Do you think times of inflation/potential recession are positive for entrepreneurs to get their business off the ground? Why or why not, and if so, what fintech tools can help set them up for success?

Martin Hegelund: Uber, Airbnb, Venmo, Square (Block) and Slack were all founded during the Great Financial Crisis. While I don’t believe that a tough market downturn is a positive environment in which to build a business, some of the world’s greatest companies have been built in times of need.

It was probably despite the macro environment that they became successful, but growing up as a company in a tough market with less access to investment makes you focus on doing the right things. Meanwhile, if there are fewer startups in your area, there is less competition for your potential customers and talent in the market.

About Martin Hegelund

Martin Hegelund is co-founder and marketing manager of Ageras Group. After founding his first Internet project at the age of 13, Martin became obsessed with building and scaling Internet businesses. He is an award-winning serial entrepreneur with 15 years of experience working with digital media, SaaS and online marketplaces. Martin co-founded several successful technology companies – Ageras Group being one of them, which to date has raised $145M USD to fuel its rapid international growth. He gives back to the ecosystem by investing in early-stage startups.