“We provide the confidence that is culturally lacking in southern Europe with regard to deferred payment”

David Bäckström, CEO and founder of SeQura, is a serial entrepreneur. Educated at the Umeå University Business School (Sweden) and at the Massachusetts Institute of Technology (USA), he began his career by launching the digital broker SparaPengar.com in his home country. Later, he founded the remote medical imaging diagnostic provider European Telemedicine Clinic and the holiday resort Hölick Outdoor Resort. With two decades of experience behind him, Bäckström is now aiming to change the way we shop and pay in Southern Europe with his fourth company.

SeQura provides a flexible e-commerce payment solution that facilitates a simple and secure shopping experience for both consumers and merchants. What unique value does it offer compared to other alternatives in the market?

Our inspiration came from Scandinavian markets, where deferred payment has always been the ‘modus operandi’, which gave them an early advantage during the e-commerce boom. Deferred payment improves conversion, because you pay when you see the product. In Spain there is less trust [in this approach], and we could see that there was a gap to set up a deferred payment services company. We realised that if we could control the risk environment a little bit, we could offer flexibility to consumers while at the same time bringing significant value to the trade. The idea was to bring that trust that may be culturally lacking in the Spanish and Southern European markets.

What were seQura’s first steps like? What challenges did you face in the beginning?

In the beginning, we needed to adapt quickly to the market, as there were many established competitors. To bring value, we knew we had to do things differently, and what we did was maintain a very open system and accept almost all purchases, as it was the best way to learn. We started out simple and built a way to cross-reference different types of data from scratch. This allowed us to learn quickly and develop a risk management system that is now very solid.

We identified three key components: firstly, the contractual component, which involved protecting ourselves from overselling and misuse; secondly, using the consumer’s digital footprint and other data to analyse their profile; and thirdly, studying the merchant profile, as some businesses are more at risk than others, depending on how they acquire traffic and the type of products they sell. We have been profitable since 2017, always with the idea of doing things sustainably and sensibly.

How does seQura rely on technology to facilitate deferred or instalment payments for e-commerce users? Do you use artificial intelligence (AI)?

We analyse the information of each purchase. For example, if someone buys many of the same items or products with high resale value, that may indicate a higher risk of fraud. We also consider consumer data such as email type, time of purchase and location. In total, we have 120 checkpoints. All this allows us to accurately calculate the probability of accepting a purchase. Our focus is achieving the highest possible acceptance rate, not just minimising risk. Initially we used basic ‘decision tree’ technology to cross-reference the data. We now use a machine learning algorithm that considers numerous factors and generates more precise results.

How has seQura been received in the market? What customers do you have and what is your current level of business?

In our first few years we began with small clients, since we were relatively unknown. We didn’t want to spend a lot on marketing or take big risks; we wanted to do something sustainable. We didn’t have a marketing department until the third year. Little by little, we built our brand and presence, focusing on different verticals, each with its own solutions. Today, we have around 5,500 merchants, including major companies across various sectors, such as Carrefour, Iberia and AliExpress.

This year, we are expecting a revenue of 96 million euros, which represents a 50% increase compared to last year’s 62 million euros. We currently employ 350 people and operate in four major markets in Southern Europe [Spain, Italy, France and Portugal]. Moreover, we plan to expand into the English-speaking world, including the United States and the United Kingdom, with specific products.

What are the advantages of implementing seQura’s deferred and instalment payment solution for e-commerce companies?

We focus on creating value for the business by improving conversion. We develop highly specialised products that perform better than general platforms. Our sustainability and sensible approach have created an attractive culture for talent and provided stability for both businesses and funders.

I understand that the most important value you provide to your customers is recurrence. According to the data you provide, your customers’ recurring purchases are increasing by an average of 25%.

Sure, no doubt. When we choose sectors, we look at recurrence and the value we can bring to each customer. For example, optiQa, an all-inclusive eyewear and contact lens subscription service, has doubled its sales and increased the average ticket size by 3.5 times.

And regarding the end customers of these e-commerce platforms, how does the seQura app enhance the shopping experience for consumers?

Among other things, we deal very well with consumers with payment problems, offering personalised support. This has led us to have an NPS (net promoter score) of 87, the highest in the industry.

SeQura operates in the fintech sector, an area that has grown to become the third largest recipient of venture capital (VC), following the healthcare and enterprise software sectors. What are the main trends you see in the digital payments and consumer finance market? In this context, what challenges and opportunities does seQura face? What are your expansion plans?

From our perspective there is still a lot to do, because so far everything has been very generic, and each vertical has very specific needs. We have 12 verticals, some emerging and others more developed. For instance, we are moving forward with specific products for subscriptions in dental clinics, for training, opticians, retail, retail products over 500 euros…

The payment model we have implemented for optiQa has been extended to other verticals, tailored to each sector’s specific needs. The future of fintech lies in addressing the increasingly specific needs of each sector. Changes in the market are occurring at a very fast pace.

What has been seQura’s experience in preparing and executing financing rounds? What challenges and lessons learned would you highlight?

This is my fourth company, so I already have experience in this field. We have not resorted to venture capital; instead, we use our own capital and that of a few private investors. This has allowed us to maintain control and avoid depending on third parties who may have different deadlines and agendas. Our goal was sustainability.

What does collaboration with an entity such as BBVA Spark bring to seQura?

Our collaboration with BBVA and other credit lines has allowed us to expand without diluting our ownership. Debt products have given us stability.

What is your opinion on the level of maturity and competitiveness of the fintech ecosystem in Spain? How do you think it will evolve in the coming years?

The ecosystem has evolved a lot in the last 20 years. In the past, there were few success stories, but now there are many. For the past 8 to 10 years, cheap money had led to a lack of discipline in building sustainable businesses. However, in the last two years, there has been a return to the need to provide real value, which is positive.

What would you recommend to entrepreneurs who want to launch their project or scale their business in 2024?

Firstly, build a plan that you strongly believe in and focus on solving an important problem for someone. Don’t get sidetracked trying to please investors. Secondly, celebrate when the company can pay its own bills, not when you raise financing rounds.