How Rain Grew To A $2B Company | Charles Yoo-Naut

I was looking on Twitter, someone said like 1% of US dollars are like now stablecoins. So that's like still like 100x growth is still possible from where we are now. And I would say there's probably in terms of actual users, even more, probably 1,000, 10,000x growth that is going to come from here. So more and more of the financial system is going to become tokenized. That's like inevitable to Farouk and I, and we're just here to help empower that.

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice, or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed.

All right, everyone, welcome back to Empire. Really excited about this one. We've got Charles Unnout, who's one of the co-founders, CTO of RAINN. You've probably heard about RAINN indirectly. Rob has been mentioning them a lot. A couple of weeks ago, Rob said, look, there's one of our portcos, they're growing like crazy. They've grown like 80x in the last 12 to 18 months.

Well, that is RAINN. So I wanted to—

I don't actually know that much about RAINN. I know you guys do stuff in the stablecoin space. You just raised $250 million at a $1.95 billion valuation. You started only 4, 4.5 years ago. Anyways, Charles, welcome to the show. I've got a million tough questions for you. I'm excited about this.

Yeah. Thank you for having me.

Yeah. Very excited. Okay. I think my first one, and I don't mean this in an offensive way at all, is you raised $250 million at a $1.95 billion valuation. And the headline for Rain is like stablecoin cards. Why is that a thing to go raise? Why is that such a big— why is that a $2 billion company? Why do you have to raise $250 million for that?

Yeah, I mean, if you think about Rain broadly, what we're building is stablecoin infrastructure to allow any company to allow stablecoin, um, embed stablecoin-based financial products inside of, of their, uh, application. So we partner and power over 200, uh, customers right now. So we power like EtherFi cards, Cast, Avalanche. We announced the Western Union partnership, um, and stablecoin-backed cards is probably one of our, uh, most popular products. But globally, we're seeing this transition where more volume is moving to stablecoin and digital assets and tokenized money broadly. Um, and it's really about the infrastructure that's going to power the future of payments. We feel like the blockchain is our best chance of upgrading the global financial rails, and we're helping to do that.

Nice.

So it's B2B?

Yeah. Okay. B2B2C, B2B2B. So we're empowering other customers to empower their end users.

Yeah. Okay. Who— how did you guys go about getting Well, maybe I want to hear about the founding story a little bit.

I think I had heard that you went through, um, uh, On Deck.

I know Eric Thornberg very well.

Yeah.

So, yeah.

Yeah. So, uh, I was On Deck 7.

Farouk was On Deck 2. Um, we met like—

On Deck, for people who don't know, it's like an accelerator.

Yeah. It's like basically like for— it's like a pre-accelerator.

Meet your founders.

Yeah.

It's for founders that are on deck, you know, you're waiting to do your next thing, trying to figure things out.

So it's a lot of people that are ambitious, entrepreneurial.

They're not, they're not quite sure what they're going to work on. but it's a great way to network, meet other founders, bounce ideas back and forth. Um, and we met, Fruit and I met like 5 years ago through the Slack and, and this was early 2021. So, you know, still pretty deep into COVID, a lot, not a lot of in-person stuff happening. And On Deck had this giant Slack community, you know, thousands of founders, people starting things. Um, and then Fruit just like slid into my DMs when I finished On Deck and he was winding down his last startup. Uh, and he liked that. My background, like I sold my last startup to Intuit and I worked at QuickBooks as a principal engineer. So he kind of liked that small business background. He was interested in ideas in the small business space.

Uh, and we just kind of jammed on, on different ideas.

He's a domain hoarder, so he has, you know, dozens of domains and, and we were, um, trying to do something with one of his domains, which is called signandwire.com. Um, and the idea was we both had been on both sides of the table as, as angel investors and as founders. And just the friction with sending, uh, you know, a check to an investor, uh, founder to fundraise for them. Um, and we just wanted to make a simple site that you could go as a founder, uh, generate all the documents that you need to, to, um, raise your seed round and also send one link to an investor where they can sign the documents and wire the money all in, in one single place. And then through that experience and trying to build on top of traditional rails, like we were building the initial MVP on top of ACH, and there was like a hop in the middle. So it could be 5+ days before the founder actually had the money in their bank account and could use it to grow the business. Uh, and then just getting access to ACH rails and, and being able to move money was really difficult. You'd have to find a banking partner, sign a big contract with them. It would take months to actually do it. Uh, so going through that process, beta testing it with our friends that were fundraising, we, uh, got really frustrated and felt like this is 2021, there should be like better options out there. And that's when we first started dabbling in, in stablecoins. Like, we had both played around with it a little bit, but this, this one use case of investing just seemed like a really perfect use case where you could invest in a founder anywhere in the world and have it settle in seconds for a fraction of a penny.

Um, and it's—

you don't have to worry about fat fingering the routing number or ACH. You can— it's traceable. You know, when it gets there, you can confirm it. So we introduced that, and that was like one of the aha moments that we had. Our first angel investor was actually Balaji, the ex-CTO of Coinbase. He was writing this article on mirror tables, so mirroring cap tables on-chain, and then he had seen what we had done with Sign and Wire. Yeah, so he like mentioned Sign and Wire in that paper, and part of his research, he wanted to invest in Sign and Wire and like use the product. So he DM'd me like Christmas Eve, and I think Christmas Eve 2021 was on like a Thursday or Friday, so like traditional banks were closed, then the weekend the banks were going to be closed, like Monday. So I— we wouldn't have gotten the funds if he used like ACH until like Wednesday or Thursday.

But instead he used Sign and Wire.

He sent us USDC. We had it in our wallet like just like few minutes after. Like, we—

did you pick him or did he come to you?

He just, he just slid. He also slid into— yeah, a lot of raises, just people sliding into my DMs and offering me opportunities. But yeah, he just slid in.

He's like, yeah, I heard about Sign and Wire. I'm writing this piece. Like, can I invest? Can I use the product?

Uh, So that was like another aha moment where we were like, okay, this is like actually 100x better experience than we've had before as founders.

Like, this is actually like a huge improvement to traditional Rails. And that just gave us conviction on going all in into building something in the space. Before, like, it was just a side project we were doing for fun as a benefit to, to, you know, the community.

Um, so that's when we really started focusing on, on that problem.

And one thing that became clear is Actually, as we talked to more founders who were raising in, in stablecoins or in crypto or had large amounts of crypto, was actually that part is easy. The hard part was that they couldn't really spend the assets that they had, especially in that time. Like, a lot of crypto-native businesses, whether you're a DAO or you're a chain or you're a fund, they were underbanked, especially they had to move offshore. Um, they had to deal with like off-ramping all of these complex operations of holding on-chain funds and off-chain funds. So it was just really difficult to spend their on-chain assets, and we realized, okay, that's a huge opportunity. That's one of the bottlenecks of actually adopting stablecoins, is the lack of utility and usability of it. If I send it to my mom, she's— it's just like a nice souvenir, right? There's not a lot of things she could actually do with it in her day-to-day life.

And that's when we decided to focus on that spending problem.

And it was clear to us, if we wanted to focus on spending, the best way to do that was to leverage the existing networks. Like, instead of going door-to-door and trying to get merchants to accept stablecoins, if we can figure out a way to make stablecoins spendable on a Visa card, you instantly unlock hundreds of millions of merchants globally and have them accept stablecoins without even noticing it.

So that was like the original, um, thing that we focused on with Rain.

Why did you— how did you figure out— okay, so once you, once you decided you want to build in stablecoins, how did you figure out which part of the stack to approach, right? Because you guys could have said, let's go build an issuing bank, maybe like a Crossriver. You could have said, let's go build— I forget what, how, what's it called, a program manager or something, like a, like a Bridge. You could have said, let's go take on USDC or Tether. Uh, let's build our own stablecoin. Let's maybe attack the payment networks. Um, how did you decide where to play there?

Yeah. So it's changed over time, right?

Initially you guys started as a card for DAOs.

Yeah. That was like the, you know, the DAO for me.

Yeah.

That was a quick pitch. Right.

And Um, we started as a B2B product just selling to crypto-native businesses, and like the, the pitch was like credit cards for DAOs.

Um, because those were the early adopters of stablecoins.

If you go back to 2021, there wasn't a ton of people using stablecoins. It was like DAOs, and there was like people in emerging markets that were starting to, to use stablecoins. And of course there was a lot of trading use cases, but we, we just built a pro— a product that solved a hair-on-fire problem for a very niche group of people. There weren't a lot of people in DAOs or in these funds, but to them, that problem was very severe. And when we told them, hey, we're building this ramp for crypto, or we're building this neobank on chain, they were like, I'll take that right away. And even if the product wasn't that good in the beginning, they just like loved it because it solved a really big problem.

Do you remember who your first couple customers were?

Uh, CabinDAO was like one of our first ones.

Like PartyDAO was very early on. Um, those were like two of our, our first customers that we were like super excited about.

Yeah.

We just found them on Twitter.

We like saw people complaining about this problem and like reached out to them. Hey, we're like, we're working.

It was that they had stablecoins, they couldn't spend the stablecoins.

Yeah, exactly. And like, it was difficult for them to open up a bank account. Um, in the US especially, if you had anything in crypto on your website, no bank would, would, would even open an account for you. So, um, those were like some of our earliest customers and they, um, gave us a lot of great feedback and we really iterated on that. Um, but through that process, we just went deeper and deeper down the stack where, um, a lot of our customers were outside the US. So we had to figure out, okay, how do you issue to people in like Cayman Islands and British Virgin Islands, all of these places that these DAOs, and, and because of the, the administration and the regulation around crypto in the US, had to move offshore. So we've had to figure out how do we issue to all of these different places pretty early on just to solve the problem our customers had. And through that, we had to figure out, okay, how do we settle with the networks on-chain using stablecoins? Because now we have all this stablecoins and they're expecting fiat. So how do we actually do that? We had to build our own on-chain settlement. We had to build our own smart contracts to, to actually be able to settle with. We had to build our own compliance program. Um, we had to get our own membership with Visa to actually do a lot of this stuff. So just by trying to solve that problem for that initial group of people, we ended up building a lot of infrastructure that became really valuable for other use cases as well.

Yeah. I heard, I forget if it was you or Farouk talking about On Deck.

Yeah.

And one of the things you guys mentioned was, yeah, we didn't even really want to build something that big. We were just kind of messing around. And then, you know, PartyDAO, like Cabot, these are not huge customers, right?

Yeah.

Was there a moment in time in the last 4, 'cause now fast forward today, you just raised this big Series C, raised $250 million. Was there a moment in time that you can think of where you're like, oh, this is, this is way bigger than we ever thought it could be. This is a company that will eventually go public and be tens of billions of dollars. Was there a moment in time?

Well, I think initially we definitely didn't set up to build a big company, but when we actually decided to start Rayn and raise our seed round, like we were, had conviction in the space that, hey, this is going to be a huge, this is going to be a huge space one day. Maybe it's really small right now and maybe there's just glimpses of it, but that's actually the perfect time to start, is when no one's paying attention to it, everyone's kind of underlooking it, or just sees all the risk.

We're like, this is actually great, let's just like build, uh, in this space and become the leaders, and then just slowly grow the TAM over time.

So really early on, we had hopes that it would be really big, um, but I would say 2 years ago is when we started making the transition to become more of like this infrastructure provider and powering other companies to launch programs on, on top of our infrastructure. And that's when things took off more. Like, we were always growing steadily month over month, but once we launched our infrastructure and our APIs is when we really started to see like rapid growth.

So I would say like 2 years ago is when that—

it was still small, like off of big numbers, but where we could see the growth, you know, we, we could see like no limits to the growth at that point.

Yeah. What's your— I, I'm not sure how much you can share, but what's your revenue roughly? Like, are you guys doing $100 million?

Around there, yeah.

100. Okay. And what is the revenue? Is it a— what's the revenue come from?

So a few things.

One is, is big portion of it is from interchange, which is basically the fee that merchants pay the networks for accepting a card on, on there. So like, if you're using Visa card, the merchant will pay Visa 2.5%, and then Visa shares most of that with the issuer, which is us, and then we share that with our, our partners as like a rev share for issuing cards through us.

So EtherFi, who does EtherFi? You guys?

Yeah.

Okay. So EtherFi has these cards. The merchant, somebody uses their EtherFi card, they spend $100. So $2.50 goes to Visa. Visa then passes a large portion of that back to you, to you guys. So let's say of the $250, it's like $240 gets passed to you and then you do a rev share with EtherFi. So maybe you take $120, they get $120.

I guess what a lot of people don't realize is interchange is actually like in reverse. Where the, the customer will pay, uh, us back $100.

Let's say there's a $100 purchase. Customer pays us back $100, then we take our share. So let's say we get like $2 of that. So then we give $98 to Visa.

Then Visa will give—

it will take their share, and then the merchant only gets back like $97.50.

Oh, I see.

Okay. Yeah, because we're get— we're in the settlement flow, so we're, we're the ones who are moving the money from like the customer to and then eventually it gets to the merchant. So, and then, so that, that comes to us.

So that's a big portion of our revenue. We charge SaaS fees for, for our customers to be on the platform for managing it.

And then there's a lot of SaaS fees, like big enterprise SaaS fees or like small scales.

Okay.

So we have like 3 tiers per card or per seed or something like that.

Um, yeah, depends. So there's like usage fees that are per KYC, per card, per transaction.

And then there's just monthly. Recurring fees. And we have 3 main tiers. So we support, you know, really small startups and then we support big enterprises and those contracts look very different based on their needs.

What is the— I like to, um, try to understand a business by trying to figure out what is the leverage point or the negotiating point that your sales team might use in a, in a contract, in a deal.

Yeah.

So when I think about like this EtherFi example, one negotiating point could be how much of, how much of the revenue do you actually share with them? Is that a point that Yeah, that's, that's definitely a point.

And then we usually, you know, we'll like raise like minimums.

It's like, okay, like we'll give you more, but you have to commit to more. You have to, you know, this is going to be like your minimum payment per month. So that's like definitely one leverage point.

Interesting. Yeah. Okay.

Let's—

a big part of your guys' story is this partnership with Visa. I asked a bunch of your investors for this. I was like, oh, should I talk to Charles about— and they're like, you got to talk to him about the Visa story. So what is this? What is it? You guys are a partner of Visa.

Uh, we're a principal member.

Okay. Principal member. So what I understand from this is, um, this is a very hard thing to get. We've got direct settlement, direct product development with them, a lot of direct control. And the thing that I didn't realize until prepping for this episode was that that's an extremely hard thing to get for a company that's 4 years old. So how did this, how did you get this?

Um, yeah, it's a lot of perseverance and luck and, and Just ingenuity, right?

Knowing—

I think sometimes, uh, one, we started a long time ago.

We started 4 years ago, so it took a long time to get it. We didn't have it 4 years ago. We, we've got it, you know, over like maybe a year and a half ago to close to 2 years ago. Um, so it took a lot of the company's life just to build the relationship to the point where we got it. Um, and then two is, you know, I would give credit to Visa that they've been pretty, uh, aggressive in their crypto partnerships, like, you know, working the Visa crypto team, being part of their stablecoin settlement pilot. Like, they have wanted to figure out what, what role does Visa play in this future world of, of digital assets and, and stablecoins. So they have been very supportive of us, um, but we've also been just, uh, really perseverant in, in figuring out how we, how we could, uh, get this and, you know, what regions we can get it, what licenses we needed. 'Cause Visa doesn't give you a guidebook of like, hey, here's what you have to do and like, go do it and you'll have it. You have to kind of drive the process yourself.

Yeah. What's the real story of how you got it? Like, did you, you know, get drinks with Kai or something? Like, what's the—

No, I mean, not with Kai. You have to figure out, it's really like networking.

Like Visa's a huge company, right? There's a lot of different parts of Visa. You know, Visa crypto team is one team, but there's like different regional teams. There's global teams.

There's like a fintech team.

So you have to really navigate the behemoth that is Visa and like pull the right, press the right buttons in the right order. Uh, so it's a lot of just like, you know, meeting people, Visa, understanding how Visa works, like getting advice from people who've gone through like similar processes before. And yeah, it took a, it took a while.

So, okay.

So you get this thing. Uh, when did you get it?

Uh, I think we got it in, uh, early 2024.

Got it.

Okay.

What, and what's it called? You're a principal member.

Okay.

So it's similar in the US, like banks, mostly just banks are like—

JP Morgan is a principal member.

Exactly. Yeah.

And then they'll, you know, if you look at the, the Chase card or like a lot of cards, um, will have a bank sponsoring, but it in, in our world, like we're basically equivalent of a bank, uh, as a principal member, but without being a bank. So a non-bank, um, principal member.

What is the unique thing that this gives you? It allows you to settle directly back to Visa?

Yeah, we settled directly with Visa, which allowed us to be part of the stablecoin pilot because we control the settlement.

Um, and then too, like, we are the—

we own the BINs, so these are our BINs. Like, we're on the hook for compliance, for AML, for sanction checks. Um, and, you know, we built the whole program from the ground up to be stablecoin native, and everything kind of works, uh, in unison with each other. The settlement, the compliance, everything kind of— it's like you can't have one piece without the other. You kind of needed all these pieces together. To really build a coherent product, uh, for customers. Like if you just had the principal membership but you didn't have the on-chain infrastructure, the principal membership is more limited, right? Because we're not a deposit-taking institution, you know, we don't have like access to banking rails. But since we have the principal membership and we have on-chain infrastructure and we have like this robust compliance program, like all these pieces together allows us to offer this product in a way that's resonating with, with our customers.

Got it.

Okay.

So you, huh. Okay. So you can directly settle to Visa. You've got the, you're like the lender of record. You've got the BIN sponsorship.

Yeah.

So you're basically collapsing the cart, the stablecoin, stablecoin, what do you call it? Issuance or infrastructure stack?

Just not even the regular fintech. It's like we, we think that—

I guess the existing cart.

Exactly.

We're, some of our customers, their end users don't even know stablecoins are powering the program.

Mm-hmm.

Uh, the stablecoins are doing all the settlement, but the end user is just paying with fiat to their, uh, to the card issuer. Um, and then we're dealing with the stablecoin settlement piece. So we feel like this is collapsing not just the stablecoin issuing stack, but just fintech card issuing stack in general.

Why, um, why doesn't someone just go to Visa for this? Or why doesn't Visa just have— I'm, I'm sure they do. Do they not have a product where EtherFi could just go to Visa?

No, I mean, Visa works with—

through principal members.

Oh, okay. So they don't issue, they don't issue directly. Okay. So they have principal member. Okay. Who are the biggest principal members pre-stablecoin world, pre, pre-crypto, who are the biggest principal members?

A lot of the big banks in the US.

So got it. Like the Bilt card, for example, Wells Fargo used to be the, the bank for that card. So Wells Fargo has membership with Visa, uh, with MasterCard in that case. Um, and then Bilt was issued on top of, of Wells Fargo. And then, you know, Chase is a, is a giant like bank, big principal member. They have the Chase Sapphire Reserve card, they have a bunch of products on Visa as well. And then there's, there's banks that are more, I would say fintech or crypto friendly. Like there's Lead Bank, Cross River Bank. These are, these are popular principal members for fintech startups and for crypto startups to work with because they understand how stablecoins work. They'll settle with you in stablecoins potentially. They understand your use case. They understand the risk. So they have catered to that market more.

Yeah. So if I think about the stack, there's like the program managers and then the issuing banks and then I guess payment networks at the top and then at the bottom it'd be like the card issuers.

Yeah.

You guys collapse the middle two things, right? The issue. So you are the issuing bank and the program manager and the program manager. So you, how do you think about competing with, I mean, it's a, it's like a hyper competitive, especially because I feel like, uh, the, the three things that boomed, it was like, all right, at least the two stablecoins and prediction markets, maybe the third, maybe perps. Those are like the three big narratives and themes of last year. Um, how do you compete in such a— yeah, you're competing with Bridge, but you're also competing with CrossRiver, and you're also competing against Gnosis Pay and Lead Bank. Like, how do you think about—

yeah, it's a fintech—

is a competitive space, but it's also a massive space, right? There's, there's room for a lot of players is, is how I, I like to think about it. There's hundreds of banks in the US that are all competing with each other, and there's hundreds of fintech apps. There's Millions, billions of people in the world. I don't think anyone's going to own the space completely. We're trying to be as successful as possible. I think there's some advantages we have against the people that are competing with us, especially, you know, the fact that we collapse the stack means that there's more for us to share with our customers. Like we have more leverage and we can give back to our customers and they can use that to incentivize their customers to spend and grow. So just the fact that we're more efficient, we have more control of the program. I think that's a big differentiator and advantage for us versus some of our competitors. But I mean, everyone, they also have their own advantages that we don't have.

Yeah. Can you tell me what's broken with the current system? Like, if I look at Visa, they can settle, what is it, 65,000 transactions a second?

Yeah.

What, what's, what's wrong with that? What's broken?

I mean, Visa's done a lot of things right.

I think people don't. Like people are always trying to figure out like how to, but there's a lot of things that people take for granted with the card networks, like disputes, chargebacks, like those, those are really beneficial things that you don't get with a wallet-to-wallet stablecoin payment. But I would say one thing that's common is like on the merchant side, merchants are really upset about how much they have to pay with interchange. There's constant litigation to bring that down. In certain countries and regions, there's like caps. Interchange limits. Um, so people always come after interchange that, you know, your, your margin is like my opportunity is a famous quote. So that's a big fat margin that, that people are trying to, trying to take out. Um, and then for us, like, what we're seeing a lot of adoption is a lot of emerging market use cases, um, where stablecoins are, are expanding, right?

And we're just, we're not doing anything different than Visa is.

We're just getting more Visa cards into more people's hands.

Yeah.

Um, but I would say like if you were to think about what the future would be is like, how do you, uh, probably I would say interchange is going to get compressed, uh, over time.

You think interchange fees will come down?

Yeah.

By how much?

I don't know.

It's, uh, it's hard to say.

Yeah. There's a, there's an argument to be made that it will stay the same, but merchants will just get paid faster. Like right now there's merchant cash advance. You actually, merchants will pay interest to get paid faster, right? Instead of getting paid, you know, T+1 or T+2, they want to get paid now. So they'll—

because they'll have cash flow, that will definitely go away.

That will go away, right?

And like, they might pay a premium for that because they're already paying so much money for that. So if you can just keep interchange the same, just tell merchants, hey, I'm gonna put money in your pocket faster so you can grow your business and have less capital constraints, like, they might be happier just paying that 3%, 2.7%. If you're—

if you're a company— so like Blockworks uses Ramp, Yeah. Right. Should we not be using Ramp and should we be like, eventually, are you competing with Ramp eventually?

Um, I think Ramp will eventually move to Stablecoin Rails.

I, and you will be the person that Ramp uses for Stablecoin Rails.

Yeah.

Yeah.

I think that the way we see it, I feel like there's very few existing money movement flows that wouldn't be faster, cheaper to happen in stablecoins. And so the end user, like you shouldn't have to change what you're used to.

You shouldn't have to. Switch to a new card, or like, you know, instead of, you know, tapping your, your phone, you have to like scan a QR code and download another app, right?

Yeah, it's a pain.

Yeah, it's a pain.

And, and changing consumer habits is so difficult. Like, we think that a lot of the upgrade, especially in the, the next few years, is going to happen under the surface. It's like, how do you actually upgrade things but keep everything the same? Yeah, especially for most consumers in the US, they'll tell you that, yeah, things are pretty good. Yeah, I can pay for my cup of coffee and just by just tapping my phone, I can Venmo, my friend money.

Like, there's an—

work pretty damn well in the US, work pretty damn well.

But under the hood, there's, you know, for every dollar you're sending, there's like $3 that are like pre-funded somewhere.

There's like, there's a lot of inefficiencies that you can, uh, improve with stablecoins.

And that just means that there's more savings, there's more, more rewards that you can offer. There's, you know, if we can just cut a lot of inefficiencies out, yeah, then consumers benefit.

Who's Ramp's principal member?

Ramp, uh, I actually forget who, who Ramp uses.

Um, I don't want to say that wrong, but it's, it's one of these like fintech-focused—

okay, like a CrossRiver or a Leap.

It's like a smaller—

can be like smaller bank in like the Midwest or something.

So if you go to Ramp, you're sitting down with Eric and, you know, you're like— have you met— have you had conversations with them?

I've had—

I, I talked to Eric before he started Stripe, uh, a long time, like when he was on Paribus.

Yeah, yeah, yeah. What's, what's your pitch to them?

Um, well, one, you can go, uh, expand Ramp in more markets.

So right now Ramp is mostly like a US-based, uh, you know, B2B card, but there's businesses all over the globe and, you know, we have more of a global footprint. You know, we can issue cards across a lot of Latin America. We're expanding to, to other regions pretty aggressively. So take your existing stack and we can help you issue cards globally. So that, that's a, the big benefit. Um, because with our infrastructure, the actual money movement scales globally. Like, we don't have to go and find a new bank in, like, another country to actually settle with, which is like a traditional card issuing model is, okay, you have your principal number in the US, but that only is going to allow you to issue into the US. Then for each other market, you're going to have to find, like, a similar bank partner to work with and settle in their local currency.

And, um, so it really makes it difficult to expand rapidly into other markets.

Versus with us, we can get you live in a lot of countries all at once.

Um, so going global.

Um, two is the cost of capital comes down. Like for us with stablecoin settlement, a traditional issuer has to hold like 4 days of reserve, uh, as collateral with the card network to handle long weekend settlement. So let's say if, you know, there was, uh, yesterday was Martin Luther King's Day. So banks were closed.

Um, so the traditional model, the Visa wouldn't settle until Tuesday with the card. So they want to make sure that come Tuesday, uh, you know, Rain has the money to settle with them.

They're not short 3 days worth of spending because they're authorizing transactions 24/7, even though settlement only happens during banking hours, right? So traditionally, we would have to park 4 days worth of spending as collateral in a bank. But since we settled with Visa, you know, we settled with Visa yesterday, we settled with them on Saturday, Sunday, we settled with them on Saturday, we just have to put 1 day's collateral. So the collateral requirements come down a lot with stablecoin settlement. So that's a huge, huge beneficiary. And then, you know, we can pass that savings back to Ramp and they can offer more rewards. Like, Ramp is all about getting more for their customers and having them save more. So they can offer instead of 1.5%, they can give them 1.6 or 1.7.

It's actually really— I, um, I didn't fully understand that until just now. It's, it's very interesting to think about, um, how this will change fintech.

Yeah.

Because most of the fintech companies are built on these like banking as a service providers, but the banking as a service providers are built on ACH, Fedwire, things like this. So there's actually, even though the UI is much sleeker and better and cleaner, The, um, yeah, the, the innovation hasn't really been what I think people thought would happen in fintech.

Yeah, a lot of it has just been layers on top of really 50-year-old banking cores that still move money through like mainframes, right?

It's still—

we haven't innovated so much at the core, which is what really excited Farouk and I when we first started Rain is like, hey, blockchains are actually this opportunity and the opportunity to do this at a global scale, not just you know, just in the US, or, you know, Argentina, you know, they have Pix, like, that's great, but then once you want to send money outside of Argentina, that's like, I mean, uh, Brazil has, has, has Pix. Once you want to send money outside of Brazil, like, to Argentina, you know, you have to figure out a whole new rail, but blockchain, blockchains in general, there is no geographic constraint. There is no geofence for it.

So, um, you can actually upgrade the whole system at once.

in like a trustless way, which is, is pretty exciting. And that's like the big unlock.

Yeah. Um, you mentioned emerging markets. Let's, let's talk about that. What are you guys seeing in, in with emerging markets?

Yeah. I mean, a lot of exciting use cases, um, from dollar savings.

So if, if you're in a country with volatile currencies, you, you want to have access to the US dollar, but you can't just walk into your local bank and say, hey, I want to, instead of, you know, saving in Bolivian pesos, I want to save in dollars. Like, the stablecoins are the best way to, to have access to that.

So my friend in Hungary said, I just got a dollar card. Yeah, he calls them dollar.

Exactly.

Like, for a lot of our customers, like, they don't see this as, as crypto or stablecoins. It's just dollars. And, and a lot of the apps that we work with and companies that we work with, the UI makes it also seem that way. It's, it's not USDC, it's just the dollar sign, right? And then underlying The customer doesn't care if it's, you know, Tether or USDC, if it's on Solana, if it's on Polygon. Um, just like with Venmo, you don't care what database Venmo using, if they're on Google Cloud or AWS. You, you just care that you can send money to your friend and your friend can get it and then they can use that to, to spend it.

So, um, that's, that's a big use case.

Like remittance use cases is pretty large. Instead of having to go through like a traditional remittance, uh, player and wait days for settlement and wait to pay, you know, huge fees to settle. Um, you just send someone a stablecoin, it's instant, it's cross-border. So a lot of remittance, a lot of cross-border like B2B use cases. If you're in, in one country doing a lot of business to a neighboring country, being able to use stablecoins to do that. Um, so that was like a lot of our growth is, is in the emerging market. And I think this next year is going to be more mainstream use cases. The Like, how do we actually take an existing fintech flow, an existing financial flow, and just upgrade it while actually providing the same experience to the end customer, but just make it a lot more efficient under the hood? I think that's like the next, like, unlock.

Do you do— does the customer have to have cards for you guys to be interesting to them?

No, we're starting to work with some non-card flows.

What's an example of like a non-card flow that you could, you could help with?

Yeah, we're, I mean, one, one thing that we haven't announced yet, but it's around like a settlement process for closing a home. So that's cool. Yeah. So being able to actually fund an escrow using stablecoins and then eventually like having that go into like escrow actually can be a smart contract where all the payments are automatically routed to like, hey, this part has to go for like insurance and this part has to go to the seller of the home and all of that can happen instantly instead of having this like really long complicated closing process that you can't do on, like, you know, outside of banking hours.

Yeah, yeah. So that's like, actually, with my, the, uh, couple years ago I got a mortgage, and I mean, obviously anyone who's been through it is such an archaic process. And I remember it was like 4:30, they're like, we got to get it by 5 PM.

It's like this rush to get things in. Like, if everything was on-chain, I think we're slowly—

now that dollars are tokenized, it solves one piece. Eventually, like, You'll have your, your title and the lease, like everything's going to be tokenized and everything can be done programmatically. I think we're still chipping away at those pieces of the financial stack. We're getting tokenized equities. That's pretty exciting. That unlocks a whole nother set of use cases. Yeah.

When you do the, when you do something like the, um, uh, home, you know, mortgages and funding and escrow and stuff like that, do you do that with a partner or do you, do you launch, do you, do you launch any consumer products yourself or will you partner with B2C.

Yeah, we're, I mean, we're not a direct-to-consumer.

Yeah.

Uh, that was like one decision we made pretty early on is like, we're just never going to be the best.

It's a great decision.

Yeah.

B2B is way better than B2C.

I mean, B2C is great. Like we, we have a lot of great partners that we work with and they're much better at us at selling like a B2C product.

And there's advantages to having a direct relationship with the end user.

Um, but you have to really understand the market you're going after.

You have to really understand your customer. And for us, we saw this as like a global opportunity and there's just so many exciting use cases. We can never be the best at all these use cases. We're never going to be the best home mortgage platform. We're never going to be the best like dollar app in this country and we're never going to be the ramp in, you know, Mexico. So much better for us to power the best in that, in that market. Um, we felt like that aligns with our skills and what we've built the best.

Yeah. Um, going back to the emerging market stuff. Do, uh, how much of your revenue and growth comes from emerging markets? Or let's call it just internet outside of the US, not just like international versus US.

I would say majority is, is outside the US right now.

Oh really?

Yeah.

Interesting.

Yeah.

And this is with, I forget, I forget like the Nubanks or the big, I don't know who your customers are, but like there's a, there's one or two like big ones in Brazil.

Yeah. There's a bunch. And a lot of our customers are focused on multiple countries.

Like they're focused on like Latin America broadly or like emerging markets broadly. Or like Africa broadly. So they're, they're not just— some of them are focused on one country, yeah, but a big thing, and one thing that we've seen, one of our customers, and, and is that they thought like one country was going to be really big, but they allowed, you know, they, they allowed all the countries we support to, to issue cards into, and they actually found that their product resonated in this other country that wasn't even on their radar. But because we had this more global issuing footprint they were able to issue in that country and they were able to see demand. And actually, like, now they're doubled down in that. They have started office in that country. They've, like, you know, working with local regulators in that country. So they've gone all in, and they wouldn't have been able to do that without this global issuing footprint.

Huh. Do you work with any of the big, um, remittance companies like the WISE or, um, well, Western Union? MoneyGram or— oh, Western Union. Okay.

We've announced, uh, our Western Union partnership, so we're pretty excited about it.

So what do you do for Western Union?

So we're going to be, um, powering, uh, uh, Western Union cards.

So Western Union announced, like, They're working with Solana. They're actually building this stablecoin movement flow. So you have the option of either going to a traditional Western Union location and accepting the payment or accepting it in stablecoins inside of an app. And it's very cool. You have the same problems you have with spending any stablecoin.

Yeah.

Yeah.

Do you think the Western Union fees come down?

I think Western Union becomes more efficient with this, right? They can now do the stablecoin sandwich where You know, you go in in the local currency, you can move stablecoins from there to wherever you want, and then you off-ramp in a local currency. So they actually turn this like cost center that they had before and then actually make that much more efficient. And they can decide what they do, what they want to do with that extra savings. Do they want to pass that on to their customers? Uh, I, I feel like over time probably that it compresses, but they also will get more customers because they'll have a better experience. Totally. Their customers get paid faster. and they'll have lower costs in doing that.

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Do you have a sense of who wins the card, the card wars or the card market right now? Um, just global, like all over or, uh, like in the crypto card market, there's like Coinbase, there's Gemini, but there's more on-chain people like EtherFi.

I think that it's going to be pretty similar to what we're seeing in, I think everything that's happening in crypto, crypto is just behind like the traditional financial markets.

Like we're always just speed running what's already happened in fintech.

So if you want to know what happens in crypto, just see what happened in fintech like 10, 15 years ago, or like what's happening now. And I think what we're seeing in the current fintech landscape is that cards are becoming more verticalized, almost like you have, you know, built for your rent and mortgage, and then you have— you might use, you know, Amex Gold card for your dining, and you might use—

is this is if you're—

card, Delta card, exactly.

There's— and then this is for a maximizer.

There might be people that they only use their Delta card for everything, um, but I think you're going to see more niche products come out and targeting more of a vertical. Um, and right now there's opportunity to just be the crypto everything card, but I think that opportunity over time, people are just going to be able to offer a better experience for a more niche customer. So right now Coinbase and Gemini are able to, being large exchanges, having large audiences, they're able to get a lot of cardholders. But once they face more competition from other crypto cards that are maybe focused on specific country or a specific, uh, spending, like, pain point or rewarding in a specific way, they, they probably will. I mean, I think they'll still grow because it's a giant market, but you're, you're going to see people be successful. I don't think it's— there's not really that many network effects in cards.

Totally.

Then it's a huge market, so I think there'll be many winners.

Um, that's good for you guys.

Yeah, customers. Yeah.

Um, what kind of new financial product— where my head is kind of going here is like, okay, if this all is on-chain and it's all happening on blockchains, you can actually start to build some interesting new financial products around this.

Yeah.

I'm, yeah, just curious if you guys have thought about that.

Yeah, I think we're, we're still in the early days.

Like right now, um, we're onboarding a ton of people to stablecoins. Yeah, but still most stablecoin flows with our cards, like they're eventually being off-ramped into fiat, um, because majority of people, vast majority of people don't have stablecoins, right, or don't want stablecoins, don't know, um. So I think there gets to a point where there is that tipping point where a majority of people start having stablecoins. Like any new technological shift, there is a transitionary period where transitionary products make sense. The— we talk a lot about previous technological shifts, whether that's moving from physical mail to email. And then there was a point in time where like the fax machine was like the most important gadget in an office. And like, you guys, I don't think have a fax machine here. I don't know the last time you—

but like, that was like a huge piece.

But that was because, like, people were still transitioning from a very physical world to a digital world. And I think the same thing is, is happening in stablecoins, where people are transitioning from paper money, or even like electronic money, but that's not tokenized, it's not digitized, to tokenized money. And while that transition is happening, there's like this window where certain products make sense. And then once there's a critical mass of people that have access to tokenized money, then things become very different, right? There's new products you can build, whether that's agentic commerce, just being really seamless. Like, all of your— everything you buy is handled through your agent, and it's all done through stablecoins. And like, you can actually— like, micropayments start making sense, where you're paying— instead of paying $20 a month for New York Times, you're paying 10 cents an article. And like, so I think there's a ton of, uh, unlock that happens once there is this critical mass. And like, stablecoins become the norm. I think— I'm not sure how long that's going to take. I think there's— you can make different bets, uh, being more aggressive on that timeline. It's like, oh, this is happening in the next 2 years, or it's happening in the next 10 years. But I think it's, it's coming. It's going to be program— like, just imagine you have cheap transactions, global transactions, like programmatic transactions. Like, the amount of new things that you can do is, is, is pretty incredible.

How do you think about agent-to-agent transactions?

Uh, I think it's, it's inevitable. It's probably, it's happening already in small pieces. Like the future is already here. It's just not equally distributed. And, um, to me it, it makes sense. Like you're gonna trust more and more of the daily things that you do to an agent. And every other counterparty is also gonna have their agent and they're gonna have to transact and bargain with each other.

Yeah.

Um, so it's, uh, I think it's inevitable. Yeah. It's, uh, it's gonna be interesting to see.

I now do my reservations.

Oh yeah.

Through, uh, through ChatGPT. So it knows like 50 restaurants I like in New York, but I don't, I don't know. I don't know if you live in New York or where you live.

Yeah.

Yeah. I live in Brooklyn.

It's so hard to get a reservation now. So now it knows the res— the spots I like. It has access to my OpenTable and Resy.

Nice.

And then I'll just be like, I need a reservation Friday night for 4 people. And it will just—

does it pick it?

You can watch it. You can watch it go on your Resy and it scrolls through every single thing. It takes a while. It takes like an hour. And then it'll be like, hey, I found 3 reservations.

Uh-huh.

'Cause you used to do that manually.

Which res— have you gone like Fort Charles?

I'm trying.

Well, have you?

No, no, no.

I mean, you still can't get Fort Charles, but you can get some good stuff. Stuff. Okay, you can get some good stuff.

Maybe I'll try that out.

Yeah, I just got, um, uh, fish cheeks, which is a good, good—

oh yeah, fish cheeks is good.

Yeah, it's hot. So anyways, um, I have to try that.

But there's a few of our customers that are doing stuff in the agent space that we're excited about.

That's great.

Um, I think that's going to become the norm probably in the next few years.

What about, uh, what about on-chain credit?

Yeah, that's huge for us.

So one piece that I, I didn't really talk about is the on-chain credit piece because we actually—

You do this already?

Yeah.

Okay.

We do this, but we're expanding how we do this.

Is this the thing with Credit Group?

Yeah, exactly. So we borrow from on-chain lenders. So through the Credit Group is a protocol we work with. They're a great team. They have a bunch of private credit lenders that we borrow from every day to settle with Visa. And then when we do our settlement with our customers, it actually goes into a smart contract. That pays off that loan that we have with Credit Group, and then it comes back to us, and then we can settle with Visa again. Um, and that's because there's like a, a day, basically a day liquidity gap between when we need to pay Visa and when we actually get paid back from our customers.

So you borrow on-chain for that?

Yeah, so we've tokenized our credit card receivables, borrow against those, and then, um, can settle and then get like programmatically repaid.

Um, and that—

borrow against future receivables with the smart contracts redirecting payments to the lenders.

Yeah, exactly. So all the payments go back to the lenders programmatically, repays a loan, we take out a new loan, uh, use that money to, to settle with Visa for the next day.

Huh, that's cool. It's, um, in 2021 or 2022, we didn't— we did a whole season on another one of the Blockworks podcasts called Bell Curve.

Okay.

It was the first season of the show. We did it all on on-chain credit.

Oh nice.

We said there's all these protocols who generate a bunch of on-chain cash flows.

Yeah.

But there's no way to borrow against it. Um, and now I think, I think, I actually think 2026 will be the year that, that we're a little too early, but that, that—

yeah, I think that we'll, we'll get there. I mean, that's, that's one use case.

And now, like, our customers also have credit needs, so we're, we're working with Credit Group to expand the borrowing to, like, our customers. And then I think eventually to the end users, they might want to also borrow against— yeah, whether it's their on-chain assets.

Um, I think undercollateralized on-chain lending is still an unsolved problem.

I don't know if it's solvable without—

you need the identity, right?

You need identity.

I think you need recourse. Otherwise, if it's like fully anonymous, you just— you're going to lose a lot of money. But I think there's potential to find solutions there, interesting things there. Yeah.

We haven't talked about crypto at all and the chains and the stablecoins. Are you guys completely agnostic to what chain you support and what stablecoin you support?

We support, uh, natively around 10, 10 chains, mostly EVM, but we also support Solana. We're working with Stellar.

Um, so those are the native ones.

We're starting to work with some privacy chains like Pay Network. We're, we're going to be supporting pretty soon.

Um, and then we support a lot of the major stablecoins, USDC, USDT.

We support custom stablecoins. Providers, like whether it's mZero or Braille or Bridge or Paxos or, uh, Agora. So being able to support custom stables as well, we just have an underwriting process where we decide what, um, stablecoins we feel comfortable with.

And then we've done like some experiments with supporting floating rate tokens.

So we power the Avalanche card, we support lending against the— against AVAX. So you can actually spend against your AVAX, but a lot of people don't want to spend their AVAX or floating—

one, there's like a—

every time you swipe, there's like a tax implication, which is not great. And they're usually holding those assets because they have— want to hold a lot.

I've never really thought that made much sense. Yeah, it's like spending— it's like spending your stock. That's—

well, that was like a lot of original—

that was a lot of crypto payments like 10 years ago, like the whole Bitcoin white paper.

Even 3 or 4 years ago, I feel like it was like when Coinbase rolled out their original debit card, it was like spend your Bitcoin.

Exactly. Yeah, well, that was like Bitcoin white paper, like this is going to be a payments Yeah, yeah, yeah. And I talked to a lot of early Bitcoin folks and they were like, yeah, I was using it for betting and for all this. And you know, I probably spent, you know, a billion dollars in Bitcoin on like gambling. Cause it, you know, you thought you were supposed to spend it. And I think now these are assets that people want to hold and, uh, for the long term. So we haven't seen a lot of people want to spend it, but there is use case where maybe you want to lend, like borrow against it and then pay it off in stables. Like, so take a longer term loan. 60/30.

What chains are— I'm assuming client demand drives the chain decision.

Yeah, we're always based on, you know, feedback from our customers, what customers are telling us.

That drives all the people want right now.

Um, we're seeing a lot of, uh, excitement for, I mean, Solana, um, Base, uh, Avalanche, like, because we're big partners with Avalanche, so we got a lot of interest in Avalanche. There's more interest in privacy now, especially from traditional institutions and fintechs who used to privacy being the base assumption. And then you tell them about stablecoins, like, yeah, there's no privacy. That's kind of like scary to them.

So what are the privacy chains that people like? Is it Canton or Starknet or Thay?

Those are two that we're hearing a lot. Um, uh, but yeah, I would say Polygon as well is, is a big, uh, chain. For us.

Polygon.

Yeah. Yeah.

Did you, did you see their two recent acquisitions?

Uh, I know they're getting really deep into payments at the top of the 50 states.

I think they're basically making a decision that we're not a general purpose chain anymore. We're a, yeah, I mean, we're a payments chain.

I mean, that's like a big use case. But for them, like Polymarket is such a big driver of volume. I wonder like how they're viewing that.

I would guess eventually Polymarket gets off.

Yeah, probably. They have, I think they have all the leverage. Yeah, exactly.

Um, any other like interesting like crypto-native things that folks would find like unique? You know, you have this unique viewpoint into a lot of different stablecoins and chains. Anything else that's relevant?

Um, we talked about chains, tokens, uh, lending.

Um, I mean, we, we're, we work with some like interesting DeFi protocols, which were whether it's EtherFi or, or Exa Protocol that are doing exciting, like Exa is pretty cool. Like you can actually break up a payment into like multiple installments, like borrow against like your ETH holdings. And so they're doing some really cool on-chain lending pieces on top of the Exa Protocol that we've been excited about. Yeah, it's been interesting because when we started Rayn in 2021, we had to operate under a very different assumptions. Like, back then, almost all the volume was on Ethereum mainnet, which was like very expensive to operate. So we had to like customize how we did settlement. Like, we were actually only settled like every 30 days, like a traditional like ramp card.

Oh, interesting.

So for our businesses, we would settle every 30 days because every settlement would be so expensive.

Yeah.

So that was one reason. It was like, hey, you— we actually will let you spend up to 30 days and then we'll settle with you like on the 8th of the month. Um, And then there was no L2s were launched yet, like we didn't even have Optimism or Base or Arbitrum. Um, there weren't even any, uh, like MPC wallets really that had any traction, or wallets as a service. So like setting up, getting a First Rain account, you had to get a MetaMask or set up like a Safe. So the onboarding process for like the first Rain cards was a lot more difficult. And now there's all this infrastructure that's been built up where payments are a lot cheaper, like you could— right now we do daily settlement, but we could do settlement like on each transaction if we wanted to. Um, and then, uh, there's like all these wallets, other service providers where you can give a wallet to someone without them actually having to figure out how to store their, their private keys and back it up. And I think that's like a big unlock as well. So all these, I think we're benefiting from all these advancements across the entire ecosystem that, that make this like a stronger product.

Yeah. Um, maybe shifting into like non-product stuff a little bit. Um, there's a couple things I want to hear about. Um, and one is the fundraise. So tell me about the fundraising journey. And there's a couple things that stand out to me. One is, um, you guys haven't— you guys have picked non-crypto native VCs as the leads. I think it was Latitude.

Uh, Sapphire was Sapphire.

Would be Northwest. Northwest, right. Um, who did Light Speed? Lightspeed led the seed.

Oh, okay.

Yeah.

All, I mean, all people who dabble in crypto, but do too much with crypto.

Yeah.

Um, especially Norwest. I don't see Norwest doing much with crypto.

Yeah. They're doing more, but yeah, not traditionally.

Yeah. Yeah. Um, tell me about the, just fundraising and yeah.

Um, well, we raised our seed round in 2022.

Market looked very different. Uh, you know, this was pre-FTX, pre-Terra Luna.

Um, we, we chose Lightspeed.

In part because we felt like they were very strong in both worlds of like fintech and crypto. Like they had a strong crypto portfolio. Um, now they have like Faction and more. So we, we had met with the Faction team before they actually like officially launched the fund and they were part of the due diligence process. And they, of course, they have a really great fintech portfolio. So it was one fund that had great experience in both worlds. So that was like, uh, one of the main reasons why we were excited about Lightspeed.

Um, and then for—

there was a period of time once FTX happened, once Terra Luna, like stablecoins were kind of in this no man's land where a lot of traditional VCs and even like fintech funds saw it as crypto and like didn't want to touch it at all. They were like, yeah, even people that we had talked to for a seed round, we would talk to them again. They're like, yeah, we don't do crypto anymore.

And then a lot of crypto funds weren't interested in stablecoins.

Like they saw it as boring. Most stablecoin businesses don't have a token attached to it. So like they didn't even know how to value equity properly. They're like, oh, there's no token with this, like, I'm not that interested. So like, there was a 2-year period where it felt like we were just kind of in no man's land and like no one really wanted to touch stablecoins or, or what we were building. Um, but Norwest actually had came into the seed round as like a small check, so they were actually like part of our journey the whole time, and they, they kind of built conviction over time. And it— they made a rare bet in our, in our Series A where things were starting to show that they were working, but it still wasn't fully—

What did that mean? Do you remember how much revenue there was around the Series A?

Um, like $4 or $5 million.

Yeah.

Yeah.

Um, so like things were starting to take off.

There was like big growth, but there was still a lot of unknowns and things unproven. Um, but they had seen the journey for the last 2 plus years and kind of seen how we operate and the perseverance that we had.

Uh, and we had tried to raise a Series A earlier that year, actually.

With less revenue, um, and then like probably talked to like 50+ VCs and no one really, really didn't work best.

Yeah, didn't work.

So we got some verbal offers, but their valuations were really low and we're like, yeah, we're not— we just felt like it wasn't a good right decision for the business. Like, we're just, we just have to like put our heads down and just grind through this next period without the additional capital.

What was the delay from failed Series A attempt to the next one?

Uh, about 6 months.

6 months.

Yeah.

Nice. And then the Series B?

Well, we hadn't launched any, we had signed customers.

Mm-hmm.

For the platform and we were getting a lot of interest.

We had this big, like, pipeline of customers, but no one had gone live yet. So that was like a big risk. It was like, hey, we have this principal membership, we've built all this infrastructure, we've proven out this B2B product that people like it and it works. We have, you know, millions and millions of demand in our pipeline. We've signed some of them already, some of them like a big exchange, a big bank. But no one was live. So that was, that was a big piece. And I think people didn't really value what we had built. So they were treating it almost as a, like a new seed opportunity versus us. Like we had felt like we built all this stuff out and like, you're like, you don't see what we have.

Yeah, exactly. No one saw that. Uh, which I mean, I don't blame a lot of those folks.

It's like, and some of it is esoteric and like there wasn't enough data points. Um, in those 6 months, you know, people started going live, the growth, uh, started to to improve. So there, Norwest preempted it and made that bet.

And then that was, and then what about Series B? Series B was like 6 months ago, right?

Series B was around summer. Yeah.

Around the summertime.

Summer of '25.

Uh, yeah, exactly. Yeah.

That at that point we ran a more full process.

Uh, we also were getting preempted by insiders who were seeing the growth start to take off.

So people were on your investor list. They were getting the monthly emails or quarterly emails.

Exactly. Yeah.

Uh, how, how often do you send investor emails?

We send it every month.

Every month. So you send the, the monthly email.

Yeah.

We send it on the first every month for the last like 4 years, like on the dot.

And so people would see that and say, all right.

Yeah.

I guess see, people were still reading it, which was good.

Yeah.

Uh, but people saw the growth, uh, and they were also just hearing more about us from, from their portfolios or from people they were talking to. Um, so we were starting to get people preempting us internally and, and then at that point we made the decision, let's Series A, we, you know, Norwest shown a lot of conviction in us, and we didn't really talk to anyone else. For this B, like, let's run a more full process, let's talk to more folks. And then, you know, Sapphire came in as like one that showed really strong conviction. Jay, who runs Sapphire, like flew out to New York to talk to us multiple times. And we really appreciated the conviction and they're not a traditional crypto investor. They've done very much of crypto at all. But they do know about scaling businesses. They do know about the inflection point that we were at. So they've been great partners. Nice.

And that was your Series C. Yeah. That was our Series B.

And that was also when—

That was what, $58 million?

Yeah, $58 million.

And that was when Dragonfly came in as well. So I think Dragonfly was like the second biggest check. Nice.

We got to show Rob some love.

Yeah, we have to show Rob some love. Rob had been talking to us Yeah.

Um, since like the, right before the Norwest round, like is when we started building more of a relationship with Rob and just the Norwest round came together really rapidly. So he didn't get to, to come in. Um, but you know, we really enjoyed getting to work with him and learn from him. So he invested first. That was the first round that the Dragonfly came into.

And then I've seen this more and more recently with these like rapid fire back to back rounds. You're talking about Ramp. Ramp did this. A lot of folks are doing this right now.

Why?

So did you, what's the story of this recent round? Did you get preempted again?

Yeah, we got, we got preempted again.

And then for, for every round, we just have to ask ourselves is like, is there more that we feel like we could do if we had more capital? Can we move faster? Does it unlock a new opportunity? And as long as we feel we're comfortable with the dilution we'll be taking with, with the new amounts, it usually makes sense to do it. So if you can get the valuation you want and keep dilution under control, and you feel like the new capital will unlock the next phase of growth for the business, then to us, that, that's like a good deal to make. So when we first started considering it, and we didn't go into 2025 thinking we're going to raise 3 rounds, we would be happy to raise—

you raised 3 in 2025?

Yeah.

Oh, because your A was at the beginning of '25.

Yeah, A was in the beginning.

And then C, like we announced this year, but we actually mostly closed last year.

Yeah.

But the opportunity and the growth was there to where it made sense. And right now, a big focus for us is just international expansion, getting additional licensing, being able to offer this really global financial, uh, enablement player, which hasn't existed traditionally because of just limitations in the underlying banking structure. So this is a unique opportunity to do this, and more capital just allows us to move faster. So that opportunity presented itself, and there was enough people around the table that we were excited to work with that we decided to to pursue it. We kept it more tight this time and only talked to several funds, and ICONIQ was one that we had started talking to in the B, but they were more of a traditional fund. They hadn't done a lot in stablecoins, so it took a lot of education and, and learning for them to get comfortable. But since we started the conversation of the B, by the time the C came around, they just took a little bit more time, but they were able to get there and, um, get enough conviction to write the check.

I heard you guys had like 7 or 8 term sheets.

Um, uh, for the B, yeah.

For the C, we kept it a lot smaller, so, so didn't have as many.

Got it. Uh, why Iconiq?

Why?

Well, I actually don't know too much about Iconiq. Yeah, I know they like manage money for Zuckerberg.

Yeah, they started as like, like kind of a Zuckerberg family office and have grown a lot since then and manage a lot of people in, in the Valley's money and, uh, started their fund maybe like 10, 15 years ago, um, to actually invest in, in be able to leverage a lot of the network, uh, and they have an incredible portfolio. But one, one reason is one, the partner there, Kamran, we really enjoyed learning. He was the COO of Adyen, so—

oh, that's very cool.

Yeah, so like having that experience coming from a traditional fintech, you know, global, uh, payments, uh, provider, I think that was like having his insight and, and being able to talk to him and, and bring him onto the board, that was a big unlock. And, and also Right now we're, we're trying to move, uh, to being mass market, mainstream, adopted by global players. And, and having a brand like ICONIQ, I think, is important to, to bring along and signal that this is like ready for mainstream adoption. Yeah.

Will you raise another round this year?

I will never— I can't say no.

It's not in the cards, not, not in the plans, but a lot can change. And, and we're always— it's the same, uh, formula and calculus we'll do before is like, if, if it comes, an opportunity comes and the valuation makes sense and we feel like there's something where we could spend it productively with, I think we would consider it, but it's, it's not, uh, not in our priorities right now.

Yeah.

Yeah. Um, tell me about the Rain culture and like maybe more specifically if, if I dropped into Rain, what are the things where I'd be like, oh, I'm surprised to see that they run this like this.

Yeah.

We're very lean.

Surprisingly very lean. A year ago, well, one year ago we were just 15 people, so we were super lean. Right now we're 80 people, so we went from 15 to 80, but it's still pretty flat and lean. Like, I have 20+ direct reports, um, so Farouk and I are still really involved in like a lot of the details, the day-to-day, like decisions, like architecture, and we want to maintain like a pretty flat, um, lean culture, uh, for the relative to the impact that we're having. Uh, but that's only possible if we hire, one, people with high agency, people that are, um, low ego, people that, uh, we feel like we can trust with a big project and then can go and deliver it. So I would say it's pretty— the talent density is pretty high.

Yeah.

And then we're 60% in New York City. We have a Puerto Rico hub that's about 10% of the company, DC So 5, and then the rest is mostly US, and then we have a growing international employee base. And as we expand to more markets, we'll probably create more hubs in other countries and just be able to attract the best of each region that we're in.

Nice. What percentage of the company is engineering, like engineering, product, data?

Uh, about like 40%.

Okay.

And then what percent is go-to-market?

That is about maybe 20%.

Okay.

Yeah.

Do you have enterprise, like, do you have like account executives or is a lot of it self-service or how do you run that team?

It's, uh, well, there's like 3 tiers. So on the lower end, on the, on the developer tier, we're trying to make that as self-service as possible. Um, but launching a card program is, is a very complicated thing. You can't really be self-service and you shouldn't because you want to actually know who your customer is and make sure that they're legitimate and they're credible. So We, we still have like, you know, uh, account executive, but our account executives are handling like dozens of, of customers each, like, like probably 40 customers each. So we have a really small, small team there. And then on the enterprise side, it's a little bit more white glove.

Yeah.

Um, like a named person on each account. Um, so it's, uh, it's still pretty lean. Like these, these teams are not that big. Like each team is our go-to-market team is maybe. 10, 15 people. Platform account management team is maybe 10 people total.

Yeah.

Yeah.

Is, um, is the revenue driven mostly by inbound or outbound?

So we've done very little outbound. Yeah, almost everything is inbound. Um, we're now transitioning so that we can do more targeted outbound.

Yeah.

Um, but we just had so much demand and the team was so small, like, we just had to only focus on inbound.

That's great.

And then now we're trying to actually like, hey, here's the people that we want to go to that we feel like we could offer an exciting new product with.

Yeah.

So we're doing a much more outbound now.

You run product and engineering and Farouk runs sales, marketing, the rest of stuff.

Exactly. Yeah.

Okay. What do you, how do you run product and engineering that is maybe unique than how others run it? Or do you just run the traditional playbook and the 2-week sprints and a little bit?

So we have about 7 different pods in the engineering side.

Yeah.

So from like infrastructure to blockchain to card issuing, uh, to like money movement. So we have like these different pods. Each one has its own tech lead. Uh, and each of them have like OKRs that they're responsible for and pieces of the codebase, uh, that they're responsible for. So they run as like micro teams.

Uh, each pod has just engineers or people across design, engineering, product right now?

Just, just, just engineers.

But over time, like our product team is 2 people.

So they're split across everyone, but over time they'll be a little bit more self-contained. but almost like 2-piece of team size pods.

Yeah.

And then, and it's really flexible though.

Multiple engineers, uh, are in multiple pods and then based on like our priorities, we'll shift people around. So let's say we have something we're really trying to get out. We'll move people from one pod into the other pod and they'll help and work on that.

Nice.

And based on skills, priorities. So we have like a pro— a cross-pod prioritization that happens and then each pod is responsible for getting the things done that. That we've laid out.

What's the biggest pain point you guys are feeling?

Just scaling, growing the team. Things that worked when we were 15 didn't work at 30 and definitely don't work at 80.

Yeah. Yeah.

And so just constantly trying to reinvent different processes. Like the pod structure came about because we were trying to be really lean, but I just couldn't delegate to 50 different people, right? I needed to have people who could delegate on my behalf.

Yeah.

So that's when we created pods and then pods will probably break at some point. Yeah. Figure out. A new thing. So this constantly figuring out what's— yeah, like people stuff, like how do you actually make the team function as a whole in a very, uh, like a well-oiled machine. And that machine is like going 90 miles per hour and you're still trying to reconfigure things. That's been the challenge.

Yeah, yeah. When we hit, I think it was around 50 people, yeah, pretty much everything broke.

Yeah, exactly.

We got like stuck at 50 for a little bit because we're like, it was, um, But it wasn't, it wasn't actually growth or sales or marketing or eng related. It was all people and yeah, where do you put people?

And you guys were all in New York, right? Or at that point you started to be in—

At that point we were remote because it was COVID. We went, we started COVID at like, I think it was 9 or 10 employees. We quote unquote ended COVID whenever that was around 60. So we grew from, yeah, 10 to 60.

All remote.

It was all remote.

Yeah.

So that's a different pain point.

That's a different pain point.

Yeah.

What do you and Farouk disagree on?

We surprisingly don't disagree on that much. I think we've, we complement each other very well, and I think we've segregated the labor of the business pretty, pretty well. So there's like a few things that, a few things that we disagree on, and, and usually like we'll come to an agreement or we'll disagree and commit. We'll say, okay, like you own this piece of the business. Like maybe I don't agree with that, but like I trust you to make the right decision and you have more experience or you're better, or you're like, you understand that piece better than I do. Like, I'll give you my input and then you'll take that into account and we'll, I'll trust that you'll do that. So there might be things that we disagree with, but it's never actually causes like a lot of friction or pain. I think we've, yeah. And like very few times that we actually end up disagreeing. Yeah.

That's great. Cause you guys didn't know each other, right?

Yeah. We didn't know each other. We founder dated.

Yeah.

We founder dated for like 8 months through the Sign and Wire project.

Yeah.

Before we committed to working on Rain. So I, I think that experience allowed us to know how each other works and feel comfortable committing. Yeah. Um, but yeah, we didn't know each other, and it's been 5 years, and, and things are still, still working. Yeah.

Um, what did you learn? You, you started another company, sold it to QuickBooks, or Intuit. Yeah. What did, um, how do you— what did you learn? Not, not from that experience, but like, how do you run the company differently? What's it like being a second-time founder?

Well, that was a very different startup. Like we bootstrapped that business the whole way. And I learned to not do that.

It's just different. You have to, startups are hard.

Yeah.

You just have to pick your poison. Yeah.

Yeah.

People, I think the grass is always greener. Like people that are doing consumer startups will be like, oh, you know, B2B, either people that are doing fintech or like—

You bootstrap, you want to go raise a lot, you raise a lot, you want to bootstrap.

Exactly. Yeah. So grass is always greener.

Startups are just inherently hard. I think the biggest thing that I learned was more like the mental aspects of, of founding something. I think that first startup I started when I was like 23, 24, uh, I, I had worked at Microsoft for a little bit and then started it. So I was a lot younger. I was just like brute forcing a lot of things. I was like not sleeping well. I wasn't really taking care of myself and burned out like very quickly. And, um, a lot like just got a lot of things in my head and, and I feel like Now my— I'm able to control my emotions a lot more. I'm able to just roll with the punches and understand that startups are going to be ups and downs. And it's, it's really, it's a long game. Like, you're not gonna solve, cure cancer in a year. You have to like grind for a long time. And if you can survive, like, the people who can survive are the successful people. Yeah. So that, that experience really just made me ready for like the mental battle that is startups. And like mental, like, okay, this is going to be a grind and I just have to go into it understanding that and never let myself get too high or get too low. Because whenever you get high, there's something is around the corner about to humble you. And then whenever you get low, there's some light at the end of the tunnel that comes unexpectedly and, and makes you see like, okay, this is actually going to be fine.

Yeah, I love that. I think that's right. Um, maybe just as closing question here, is there any— you guys have such an interesting viewpoint into the entire pay— many different, uh, sectors of kind of the economy, honestly, like crypto and payments and fintech. Is there anything that looks really, really obvious to you and for— that you think others are not seeing yet?

Um, I think that this is still like the stuff that we're working on right now is still not ob— it's maybe obvious to, to you because, yeah, yeah, like this, this, uh, company and you talk to a lot of people all the time, but I think we're still in the minority of— I was looking on Twitter, someone said like 1% of US dollars are like now stablecoins. So that's like still like 100x growth is, uh, still possible from, from where we are now. And I would say there's probably, in terms of actual users, even more, probably 1,000, 10,000x growth that is going to come from here. So I, I just feel like more and more of the financial system is going to become tokenized. That's like inevitable to Farouk and I. And, um, we're just here to, to help empower that.

Yeah. Love it. Charles, congrats, man. Congrats on everything. And yeah, rooting for you.

Thank you.

Cheers, folks.