"We were three guys and a dog! We weren't expecting this…" – says Nuno Sebastião regarding Feedzai's arrival in the Unicorn League. Although Feedzai is only the fourth Portuguese company with this status – and the very first unicorn supported by EDP –, its CEO knows, as he told Visão magazine, that it is crucial to keep everyone's feet on the ground: "There are two roads, up and down – but going down hurts a lot more and is faster! Being in Silicon Valley and seeing this happening every day makes you realize that you can be a hero today and a zero tomorrow. You must grow consistently and humbly. The difference between a visionary and a madman is very small."
From Cantanhede to Silicon Valley
The CEO of Feedzai was only 15 when he left his parents' home. He was studying in Cantanhede, where he was the best student, and a Maths teacher told his parents that he should pursue his studies in Coimbra. The father, a bricklayer, and the mother, a housemaid, heeded the teacher's advice and approved the move. Without knowing it, Nuno Sebastião was just starting his journey.
In 2001 he graduated in Computer Engineering from Coimbra University, and later he obtained two MBAs – in Entrepreneurship and Management – in England and the US. His first professional experience was as a consultant at Deloitte, fresh out of university. Three years later, in 2005, he created his first company, Oristeba, which specializes in software for the aeronautical industry.
And then, in 2006, he joined the European Space Agency via the Contacto program.
"I really wanted to go to Silicon Valley, but I got a position at the Agency through the Contacto program. I didn't even really know what ESA was. The difficult part was the journey there, where I stayed for seven years. It takes time to reach the upper echelons.
In 2006 I became the first Portuguese citizen to do this; I became the manager of the entire operations control software. It was a fabulous experience for three years, managing a huge budget and hundreds of people… But for an ambitious guy, being Portuguese didn't open any doors – the whole thing revolves around quotas for countries. The top managers are all German, Italian, French, and Spanish. Someone even suggested that I should marry a German woman to get [German] nationality. These are very ossified and unexciting organizations, with a lot of poorly managed funds, which generates a lot of frustration. In other words, I had to get out of there.
In 2007 I started my MBA at London Business School and decided that I wanted to build something in the engineering field," he told Visão magazine. It didn't take him long to become the techie who 'brought' Stephen Hawking to Lisbon's Web Summit.
A decade to become successful
In just ten years Feedzai climbed its way to the most exclusive group of global tech startups.
Feedzai was created in 2011 by Nuno Sebastião, Paulo Marques and Pedro Bizarro, and even though they all had an Engineering background, their careers and experiences were complementary.
They spent about two years trying to figure out what they were going to do with the company they were creating. They tried utilities, telecoms, and even health – until they came up with fraud detection.
But even after choosing the company's field of operation, success was not immediate. Nuno Sebastião recalls that Feedzai had no sales whatsoever for a whole year, but then a US$2 million loan changed everything.
"One day this guy, a partner at Foundation Capital Kraftwerk, listened to my pitch and liked it so much that he said he was going to help. Basically, he sent his friends an email to introduce me so that I could go there and make my pitch. That's worth gold in Silicon Valley. I spent 15 days running like crazy on Sand Hill, Palo Alto, the street where you would find all the venture capitalists. More than 20 of them. They all rejected my pitch, which was very discouraging; these things really destroy your self-confidence. But this is a numbers game; if you have a good product, you have to insist until someone realizes how good it is. You just need someone to say 'yes' and the others will follow. I got our first help after a ten-minute talk. Others joined in and we got the 2 million from Saphire Ventures, ES Ventures, EDP Ventures, and Novabase. It's a bit like Shark Tank, but in real life," he told Visão.
Keep innovating
Feedzai is considered one of the world's leading experts in combating financial services fraud.
With more than 500 employees, the company monitors over 5 billion banking transactions worldwide and provides anti-fraud systems to some of the world's top banks.
With cybercrime becoming more sophisticated (so far into 2021, financial fraud has increased by 159%, with 93% of these cases involving online transactions), Feedzai is a kind of detective specializing in fraud - one which can confirm in a few milliseconds if there's anything wrong with a digital transaction.
But this is a constantly evolving field: in 2021 Feedzai introduced a new technology aimed at fairness in Artificial Intelligence – Fairband – which was awarded at Fast Company's World-Changing Ideas Awards, Fintech's Breakthrough Awards, and the Asia FinTech Awards.
The importance of a partner like EDP
Feedzai and EDP first crossed their paths back in 2010. That's when EDP started paying attention to the evolution of this tech company, especially with regard to its data processing technology and how it could be applied to the energy industry.
It was also around this time that EDP Ventures started investing directly in future-looking companies: after a successful technological trial, Feedzai became EDP Ventures' second investment.
For Feedzai, being financed by EDP Ventures has helped the company gain credibility in the market. "It was very important to have our idea validated by a company like EDP Ventures." Furthermore, this partnership also involved some mentorship, which helped guide Feedzai on its evolution.
Proud to be Portuguese
Although Feedzai has offices in nine geographies, including London, New York, Atlanta, and Silicon Valley – after all, "those who want to win an Oscar go to Hollywood" –, the company's headquarters remains in Coimbra, "with great pride".
Leaving Portugal was never an option for Nuno Sebastião, although he was told that he would never go far in his career because of his nationality, and despite the fact that some US investors asked him to move Feedzai's headquarters to the US.
His 'stubbornness', however, had a price, and it took the company some extra time to reach certain levels. Such is the case of the investment round that turned Feedzai into a unicorn: "Very stubbornly, we wanted to do this from Portugal, and with a Portuguese team. We were signing the documents and everyone on our side was Portuguese – us, the legal team, the internal team. On the other side, people from San Francisco, New York, London, and the negotiations were held here. Trying to explain how this works is not easy," Nuno Sebastião told Eco.
The fourth Portuguese unicorn
"Cool!" That's how Nuno Sebastião described the end of the 200 million Series D financing round which turned Feedzai into the fourth Portuguese unicorn.
"I feel the same way. I mean, it doesn't change anything. I've had calls with the board, and the question is: "What's next?". A thing like this is not a goal, it's a consequence. Now we are a big, strong company. Whoever invested in you did it with the ambition that it could become even bigger. What I told my team yesterday was that now investors ask, "Where's the accelerator?". Because now we have to accelerate even more. That's the difference," he told Portuguese newspaper Eco.
The road to becoming a unicorn has its ups and downs, its good and bad moments. In some cases, it was Feedzai itself that refused some partnerships – to make sure that they retained control over the company.
A custard tart a day
Nuno Sebastião is always on the move. Sometimes he has breakfast in one city, lunch in another, and dinner on the other side of the world. He has a home in the US, Lisbon, and Coimbra. But according to the CEO of Feedzai, home is "a mental state, not a physical one." His suitcase is always packed. And for that very reason, he always buys the same jeans, the same t-shirts, and the same sneakers. To simplify the constant traveling.
In spite of everything, he is a creature of habit. And some of his habits are particularly important to him, like his custard tarts and his Sical coffee. Every single day. No matter where he is. He never switches off. And it's not because he feels he can't. He just won't. He so loves what he does that the difficult part is switching off. "I haven't taken a vacation in about ten years," he told Observador.
