When Silicon Valley Bank collapsed in early March, some panicked entrepreneurs found refuge in Arvanaghi’s fledgling digital bank, Meow, which lets businesses earn interest through short-term U.S. Treasuries. “People were looking for lifeboats,” Arvanaghi says. By the end of the month, the then-12-person company saw $500 million in in-flows, bringing total assets under management to over $1 billion. Arvanaghi and cofounder Bryce Crawford—both of whom had worked as software engineers at cryptocurrency exchange Gemini— have since launched a high-interest business checking account, partnering with banks such as FirstBank to hold customer deposits. Like traditional banks, New York–based Meow makes money on the interest rate spread—paying a lower interest rate to depositors than it makes on loans. Founded in 2021, Meow now has more than 500 corporate customers. “We’re applying the Costco model,” Arvanaghi says, offering low-price products and surviving on volume. In mid-2022, the startup raised $22 million from investors including Tiger Global and QED at a $127 million valuation. Arvanaghi says all the money is in the bank. “We haven’t spent a penny of it.”
Category
🤖
TechTranscript
00:00 (upbeat music)
00:02 - Brandon, it's so great to be here with you today.
00:04 - It's a pleasure.
00:05 - So let's start off by talking to me
00:06 about exactly what Meow does.
00:08 - Meow is a high interest banking platform.
00:10 We beat down our banking partners on price,
00:12 and what we do is anyone who onboards to Meow
00:14 to get a business checking account,
00:16 they can feel like they're getting
00:17 a really good interest rate through the platform.
00:20 - And how exactly are you doing that?
00:22 - So there's only been a few companies
00:23 that have ever successfully attracted
00:25 business banking deposits as a fintech
00:28 facing the startup market.
00:29 And so we had a lot of social proof with us
00:31 when we went to these banking partners.
00:33 So we said, look guys,
00:34 if you guys give us a really good rate,
00:36 we'll attract more customers to use your platform.
00:38 And they said, okay, fine, let's see what you can do.
00:40 Thankfully, we crossed over a billion in assets
00:42 on the platform through that.
00:44 So that's why we had leverage here.
00:46 - Very cool.
00:47 Now take me back to the beginning.
00:49 I wanna hear all about your founding story.
00:51 - Yeah, so my co-founder and I,
00:53 we wanted to start a company our whole lives.
00:55 Thankfully, COVID came around
00:57 and it was a little bit easier to raise funding.
00:59 We didn't know any VCs.
01:00 He quit his job at Facebook.
01:01 He just moved into an apartment with me.
01:03 We just started coding nonstop, yeah.
01:06 Thankfully, we got our first check,
01:07 an investor who believed in us.
01:09 And one thing led to another, we built a great team
01:11 and we built a good company since then, thankfully.
01:13 - What was it like switching into entrepreneurship
01:17 and taking on that challenge for the first time?
01:19 - It was terrifying, yeah.
01:20 I mean, quitting our jobs and not having any kind of
01:24 fallback, any income, any plan really,
01:26 was kind of scary.
01:28 It was like the abyss.
01:29 It's like staring into the darkness
01:30 and not knowing what's there.
01:31 And we just kind of coded our way out of it.
01:33 And thankfully, we could see a light
01:34 at the end of the tunnel,
01:35 which was just our first customer.
01:36 - Tell me about how you came up with the name.
01:39 - You know, the investors who passed on us,
01:41 they said we would never see $1,000 come to me.
01:44 We'd never see 100,000 with the name, yeah.
01:46 Now we're over a billion on the platform.
01:47 I still get questions about the name.
01:49 Like, it's a happy, high ceiling,
01:51 there's dopamine in the name.
01:53 When you say it, it just makes you happy.
01:55 And if I was going for like a single or a double,
01:56 I would have named it something more boring, right?
01:58 But Bryce and I wanted to be a household name
02:00 with unlimited potential.
02:01 And why not just pick the happiest,
02:03 highest ceiling name you could think of?
02:04 - Do you love cats?
02:05 Is that why you chose--
02:06 - I'm a dog person.
02:07 - Wow. - It's a crazy thing, yeah.
02:08 I like cats, yeah, they're fine.
02:11 (upbeat music)
02:13 - What's been the most challenging part about running Meow?
02:18 - Challenging part is we're trying to do everything
02:20 with the leanest team possible.
02:22 So when we crossed a billion in assets on the platform,
02:24 Meow Technologies Inc., we were 12 people.
02:26 That leads to problems, but it leads to opportunities.
02:30 I mean, being so lean, every dollar we save,
02:32 we can feasibly pass back to our customers,
02:34 but that means we're constantly underwater.
02:36 So we have to figure out how to further automate,
02:39 make this like the most efficient platform possible.
02:41 That's really the challenge for us.
02:44 - I definitely wanna hear about your fundraising journey.
02:45 Walk me through that and where you're at today.
02:48 - Yeah, so we've raised 30 million to date about.
02:51 This is our first company,
02:51 and that's kind of a high number for a first-time founder.
02:53 I did that with my co-founder, Bryce.
02:54 So the hardest part was getting the first check,
02:57 'cause when you don't know any VCs,
02:59 every VC is basically looking for social proof.
03:01 Like who else has invested in you?
03:03 You don't have a good answer for that
03:04 when you're starting out.
03:05 So you have to find that one VC who believes in you
03:08 before anyone else does, and that's super rare.
03:11 That was a guy named Charlie Songhurst for us.
03:13 And one thing led to another.
03:14 When people saw Charlie invested,
03:16 then it's like, okay, maybe I can invest too.
03:18 And then it kept going and going,
03:19 and thankfully we raised some money
03:21 and we can do some big things with it, I think.
03:23 - Can you talk to me a bit about your competition?
03:25 Who are they and what sets you apart from them?
03:28 - It's a good question.
03:29 So my co-founder told me,
03:30 "Look, we should never focus on the competition."
03:32 Jeff Bezos says if you obsess over the customer,
03:35 you don't even need to think
03:35 about your competitors at that point.
03:37 So there are major banks that are competing with us.
03:39 There are major fintechs that are competing with us,
03:41 like ourselves, that have $14 billion valuations,
03:44 $100 billion valuations, thousands of people.
03:47 And we're sitting here at 15, going head-to-head with them.
03:50 But we just focus on the customers,
03:51 and they kind of guide us to the right path anyway.
03:54 So we try not to think about competitors that much.
03:56 - That makes sense.
03:57 Is there any advice you would give your younger self
04:00 the day before you started your company
04:02 that you wish you knew now?
04:04 - I would say there's a difference
04:06 between working hard and working smart.
04:08 I felt like the longer hours I worked on something,
04:10 the more it demonstrated my knowledge on it.
04:13 There's ways to work, be more efficient with your time
04:15 without kind of hurting yourself over it.
04:17 So I'd say time management's a big one,
04:19 something you have to learn as a founder ultimately.
04:22 - And what would you like your legacy to be?
04:24 - Honestly, if we at the company,
04:27 we just want to make an impact.
04:28 We just get excited when people use the product, right?
04:31 - Yeah.
04:31 - And there's 30 million, what, small businesses in America.
04:35 Having people use Meow to access bank accounts
04:39 through our platform, I mean, that would just light me up.
04:42 If every business was using Meow,
04:43 I mean, that's a great legacy to have.
04:45 (upbeat music)
04:48 (upbeat music)
04:50 (upbeat music)
04:53 (upbeat music)
04:55 (upbeat music)
04:58 [BLANK_AUDIO]