Aen's Growth: Revolutionizing Payment Processing and Financial Technology

Aen revolutionizes payment processing by leveraging innovative technology to outperform traditional banks and enhance customer value.

### The Rise of Aen: Revolutionizing Payment Processing and Financial Technology
* 💳 Aen has emerged as a significant player in financial services, transforming the perception of payment processing from **mundane to exciting**.
* 📈 In 2023, Aen processed **nearly a trillion Euros** in payment volume, achieving a net revenue of **1.6 billion Euros** and an impressive EBITDA margin of **46%**.
* 🌍 The company, founded in the Netherlands in 2006, has expanded its operations internationally, with **over 800 employees in the US**, which now accounts for **a third of its total revenues**.
* 🚀 Aen's co-CEO, Ingo, emphasizes the importance of investing in technology to compete against traditional banks, stating, "**We build everything from the ground up**."
* 🌐 The company is also entering the Indian market, having established **local data centers and obtained necessary licenses**, showcasing its **long-term commitment to global expansion**.
* 🤖 Aen is leveraging AI to optimize transaction routing, resulting in **over 20% lower costs for merchants**, while also focusing on automation to maintain efficiency.
* 🌟 As Aen navigates the complexities of operating as a European company, it aims to **comply with local regulations** while maintaining a **global perspective**, adapting to **market demands**.
* 🤝 The partnership dynamics between co-CEOs Peter and Ingo highlight a **successful balance of leadership roles**, focusing on both **company culture** and **operational management**.

and this has been one of the hottest growing areas of financial services. Adan is not just a normal payment provider. While payments usually is a very unsexy piece of our industry, you guys made it sexy. Growth in our Ona platform has been very significant. We're investing for the future. If you work with newer technology, you get to better quality. We completely rebuilt the infrastructure that typically is run by banks, and by doing that, we come to much better conversion rates for our customers. Ladies and gentlemen, the co-CEO of Aen, hi, good to see you. Let me give just a little brief overview for a second. So Ingo has been with Aen since 2011, first as the CFO and now as co-CEO since May of 2023. Aen is based in the Netherlands, founded in 2006, and is one of the largest payment processors in the world today. In 2023, Adan processed nearly a trillion Euro in payment volume.

uh they had net revenue of 1.6 billion EOS and an EIT of 743 million EUR, a 46% EA margin. Incredible. Um, it's a capitalist conference. We applaud for Eva. Oh my God, can you just say it one more time? The company reported a 24% year-on-year revenue growth in H124. They just expanded into India, which is really interesting. We want to talk to you about that. Um, your market cap is today actually, I just checked, about 45 billion American dollars. Um, so it's one of the most successful, not just European tech companies of all time, but frankly, tech companies of all time. So welcome, Mingo. Thank you. Thank you for having me today. Um, you're former CFO. Yeah, I'm going to put you on the spot. Um, you're no longer the CFO nor the co-CEO of Aden. You're an analyst at an investment bank. Yeah, and J.C., your managing director, says put together a spread trade. You can be long or short one of Aden and

stripe how do we construct the business case? That's a really good question. Just the parameters of how we construct the case. I would say if you look at this industry, um, for ourselves and stripe, there is a lot to win because I think we are the only two companies globally that are investing in technology, in financial technology. And if you look at where most of the business currently is, it is with the traditional players, it's the banks, it's incumbent players. So I would certainly go for long for both of us because I believe that we together going to change this industry. Uh, that's how I look at aen versus tripe. We come from different angles, uh, but what I really appreciate about them is the fact that they also innovate and, uh, competition is good. We're a company of a lot of athletes, we like to compete, and competition is good. So when you do compete in the marketplace, are you competing then with stripe or you competing more with incumbents where traditional players are looking for payments? And then, yeah, I would say like

Of course, there are areas where we compete with Stripe, but if you see where we win most of our business, it's with the traditional businesses, so indeed the incumbents, the banks. That's where volume comes from. So, that's, and what do they find? They find both the cost is too high, and then they find the technology is too brittle for what you need to do today. Exactly. I think if you look at this industry, Banks incumbents haven't invested for ages. We build everything from the ground up, so we have a single platform globally. And what we can do is we can basically lower the total cost of payments and increase your authorization rates, and that combination is very powerful. And the reason why we can do that is because we have lots of data in a single platform. Now, at the end of the day, you guys still sit on top of these fundamental rails, right? Like, meaning, is there a way where we are in a world where the traditional payment infrastructure and then, you know, the

traditional credit card rails. Is there a world soon where all of that disappears, or will there be enough, like specifically the networks like Swift, the banks themselves? What role do these people, why exist? Well, it's a good question. I think indeed what we try to replace is the fundamental infrastructure. So, in the US, we have our own access to the Fed. We have a banking license in the US, so we don't need commercial banks to be successful. And I think that's very crucial in our development. If you take long-term, also on the platform side, a lot of small businesses, they struggle to work with banks. And a lot of the software service providers, they of course build banking as a service, and there are only a few companies globally that can offer this. And we want to be that player, that partner for these types of companies to help them sell financial products. So, that's also why we have expanded from payments to broader financial technology. Do you

Have you ever had a conversation internally which said something along the following lines: Ah, 46% DEA, that's a lot. We don't need that. You know how much of that 743 million would grow the business if we just took it to zero to our investors for the next few years? Like, could I grow twice as fast? Is that better in the long run? How? Why? Why be this profitable? I guess maybe, yeah. I think profit is for me the same as value. So, if we deliver value and also have premium pricing, Merchants are willing to pay a premium and pay the B basically for the value that we bring. And I would be afraid that if we would just go for the lowest price because I think we potentially could, we run at the lowest cost as an infrastructure. You would basically destroy a lot of value that's in still in there. And I'm not sure if you would just go for price that you have the right conversations about the value that you bring. So, that's the reason why we haven't done that. So

far um but it's, of course, a question that you should always ask yourself, like, can you invest more in the business to accelerate growth, and that's still the trade of the making every day. Our main focus is on revenue growth. If we can invest, if we see an opportunity, we will, but we have a long-term view there. What's it like building a company based in the Netherlands? What is it like hiring people? Where do you hire people? Do you make them come to the office? Yeah, how the culture changed? Yeah, so building a company in the Netherlands or starting in the Netherlands at least makes you aware that you need to go international from day one. The Netherlands is a super small country. You can never build a very successful business just based on population there. So, we immediately went international, but in the beginning, we hired mostly into Amsterdam. So, we had a very strongly focused Amsterdam operation, and that shifted like 10 years ago. So, 10 years ago, we went to the US. We

started to build our team here. Uh, there's a very significant base here now in the US. We have more than 800 people uh working in the US. Uh, so it's our um largest market outside of Europe. Uh, growing fastest is already one-third of our total revenues, the US. And I find that um very interesting to see also how that has changed our company. We have a different perspective on how we should serve um merchants. I think not being local uh in the beginning did not help to solve the real problem. So, you need to have product and engineering very close to where customers are. And I think when we made that shift um we got more traction. And with the current setup with like over a third of our revenues already in the US uh we see that we win a lot of domestic brands um and I think we're also proving that payments is not a commodity. Because do you do you find it um is there differences in employee issues, employee quality between America and Europe? I think there are very talented people in both markets um I

think the honestly the technology market, of course, in the US is way more competitive than Europe. I think we benefit from the fact that in Europe we are one of the few companies, um, so yeah, it's relatively easy. Our brand awareness in Europe is higher than in the US. That's one of the things that we're working on right now to make sure that more people get to know us. In the end, we're a business-to-business brand, uh, so that requires additional um push to uh show what we do. But we work for the largest companies globally, whether that's online with we work for Google, Meta, Microsoft, for retail, H&M, Nike, Gap. So there we work for the best brands, and by also having them as referral customers, it is better to get into a country like the US. If we were sitting here, sorry, some of the like challenges with being based in Europe, maybe not on the commercial side, but just on the shareholder side uh, American investors, kind of public investors, private investors are mostly investing mostly in private American and public.

American companies is it hard to attract a shareholder base. Does that affect the valuation because it's challenging to do so. And if you look at the valuation difference in the private market for Stripe versus your public valuation, there's a gap. There's a difference in the multiples. Your, it's a 2X gap on numbers that look very similar. And your numbers are similar. Some of your metrics are much better. Maybe, I don't know if you want to explain the valuation gap difference or maybe just talk about the challenges of building a shareholder base and shareholder interest as a European company. Yeah, that's a good question. Like when we, our biggest private round was in 2014. And then we realized that we want to have a global investor base. That's when Iconic, General Atlantic, but also TASC from Singapore came on board. There's still, they have been very supportive in the years up until the listing. We listed in 2018. And when I worked on the listing, we were quite convinced that we would list in the US, given the fact that most

of Technology stock list here, but when we looked at valuation and also index inclusion, etc., we realized that listing in Europe was as easy as the US or even easier. From a valuation perspective, also, if we benchmarked it to other IPOs at that time, we even got a premium for listing in Europe because we had a fully US, almost like 60-65% at the listing US investor base. So, it was almost like a US IPO, and we got a premium for being a scarce tax stock in Europe. I think that combination worked really well for us. There is a difference, I think, between public and private markets, and I think that explains for me a bit the difference in valuation. You think that'll get rationalized over time? I think so. Ultimately, if we're both public, you're going to compare the same numbers, and it's a combination of growth rates and profitability. You ever do a deal? Would you list in the US as well? If I would.

list in the US. Like, if there would be no liquidity in Europe, I would list in the US, but there's sufficient liquidity in Europe. So, um, you need to have a certain size, but we have the size, there is liquid liquidity, so it's not. Yeah, these valuations will merge at some point when the people who are betting on promise versus performance, you know, one more the public market is performance, priv Mark, these EIT margins are bananas. Yeah, it's fantastic. So, if we were sitting here 10 years ago, this entire conference um would be, you know, uh centered around crypto and this amazing impact and how your business would absolutely be destroyed by crypto and there would be no need for banks or for countries or for nation states. Everything was going to be blockchain. Yeah, it was just everything's going to be solved by blockchain and everything goes away um and that obviously none of that has happened but one thing that has happened that's really promising um or interesting is stable coins. You have Circle in the United States doing really

well, going public. Um, I believe they're still on track to do that. Then you have Tether, obviously banned in a bunch of countries, a bunch of problems, um, and being used for a lot of um, illegal activity. I'm curious what your thoughts are though on the concept of stablecoins and, you know, their impact on the industry and the business because it does seem to be working, especially internationally. We don't see it here in the United States, but in other countries, Tether and Circle, these things are being used for lots of transactions, and people believe they'll ultimately be used for business transactions in a major way. What are your thoughts on stablecoins? Yeah, so I think the question is like, are you looking at indeed domestic payment flows? And then, of course, I don't think that there is a high need for stablecoins in well-developed markets. And ultimately, we are processing well-developed markets at the moment. Um, if it's about inde cross-border type of transactions, we still work with relatively old systems like Swift, um, with all their challenges. They try to

innovate like that's the area where I would see there is a future for stable coins. Indeed, if you need to, would you ever consider launching one? No, I think we would consider working with stable coins. So, you might partner with a ex. Yeah, that's always been our model. Like, we want to bring financial technology to our customers, but also working together with the partners that we have because they are ultimately also making a lot of success, and that's where we want to help them. Ingo, one of the things that we talk a lot about is censorship, but beyond idea censorship, there's an even more probably corrupting thing, which is financial censorship and deplatforming. And the way that I think it came on our radar was there were these truckers in Canada that were protesting a few years ago, and they effectively got deplatformed from financial services. How do you balance that as a company that becomes this critical artery to send money back and forth and process money for millions and millions of people?

I think one of the ways how we want to do this is work with a lot of platforms that basically have these truckers as an example as a customer. And I think the unique thing of these platforms, they have a lot of knowledge about these people. And I think combining that knowledge with providing financial technology is a very good outcome because they have their knowledge about the industry, about the business data of these people, combined with what we know is needed in the financial industry, everything around money laundering prevention, terrorism financing. If you combine that, I think you have a very strong proposition. And I think that that's the answer to the more traditional players like the banks that also don't always have the knowledge to do this at scale. I think that's what we have been estimating from the start, like everything around AML machine learning. We've invested highly in that to build something very scalable, and that's what we want to offer to our companies. Is it complicated being a European company more than an American company in

that context where there's a lot of points of view that Europe has and do they try to exert that pressure or not. No, I think we have really shifted from being a European company to a global company. And we need to comply with local regulations everywhere. We see ourselves as much as a US company as a European company. If you look at the operations that we've built here, we want to make sure that we can compete with each and every competitor here in the US on the same level. So, it's needed as you that you comply with. Tell us, you're moving to India. I mean, not you personally, but the company. Yeah, the exposure in India is incredibly dynamic, as you know. Lots of varying regulations, as you also have probably dealt with. Tell us about the journey in India. Yeah, it's a long journey. I think we started to work on this in 2018, 2019. And one of the most difficult things is all the data localization rules in India. So, if you have a

global platform. We have a distributed database around the world, and then you need to realize that you can't store data of Indian people outside of India. So, we had to really re-platform the data infrastructure that we have, but we did that. We have local data centers now in India. We got all the licenses, and we're one of the few international companies, maybe the only one right now, that can offer this to international companies that want to go domestic or international companies that want to go cross-border. And of course, this is a relatively niche play in India today, but it's a high need of our biggest customers totally, and that's what we've always focused on. We follow our customers. If they want to go into a new country, we make sure that we're ready for it. And this is a long-term investment, so this is already six years going on. I mean, to me, India is like China circa 2005. So, if you just closed your eyes and just bought the entire country index in 2005, you'd

look back in 200 even now, and you'd be way, way ahead. And I think India's on the verge of that multi-decade kind of Renaissance with less regulatory risk on the back end. Yeah, well, at least the regulatory rules are very clear from the start, and I think that's what we appreciate. Like, ultimately, our company is a combination of technology, regulatory knowledge, and the right banking licenses. And if we play that out well, we are in such a unique position. So, everybody is, you know, bling, oh, sorry, go, go, Jason. No, no, finish, go there. Everybody's talking about AI, and you have to have an AI answer, but what's the real on-the-ground experience of trying to build stuff with machine learning and AI? Is there anything in production that really matters? And absolutely, how do you think about the future? So, one of the things, so there, I think, two angles to this. The first one is how we optimize transaction routing. We just also launched a new way of US debit.

uh routing in the US. uh where AI helps us to make the best tradeoff for merchants to lower the cost. so you get 20% plus lower cost. uh if you route that well. and at the same time. higher is intelligently figuring out these rails are cheaper in this moment. process over here. and it's a yeah. and it's of course a trade-off with the authorization rate. right. and yeah. we work with uh eBay. Microsoft. Etc. to uh to launch this um and very good results. so. and that's in production. that's in production. that runs W. the other part. the other angle is of course what we do internal for our support functions. that's more on gen um. we are uh. We've always built a company around open source. also here. we're open sourcing um. the uh. the models uh. but we have a lot of uh. data of course internally that we can use for that. have you. have you found enough motivation to displace or. Reason to displace the humans that do the equivalent work. or has that not happened.

yet or will it happen, do you think, or does the business just grow and everybody is growing? And we've always had such a high focus on automation. If you ask where does the EBITDA margin come from, that's because if you look at our volumes and the number of people that we employ, it's a really low number relatively. And we will continue to do that. So, AI is going to help us to further scale. And I don't think that we are... come on, okay, Engle, I have to push you. Yeah, I mean, do you look at these American companies burning this kind of money to do a business that's smaller than yours, and like, do you scratch your head thinking, How do they... what is going on over there? Do you think that these are huge investments, and we are closely following it, like, Where can we benefit from it? But we're always a bit of a smart follower. I think that's always been our strategy. Yeah, like, What can we use, and what can we...

actually apply in production. We are so much focused on execution. I think that's also the only way to prove to, uh, like we started the company with Enterprise Merchants. The only way to prove to the biggest Merchants out there is to show that you can do it and just talking about it. It's also not really European just to talk about it. We are doers. We like to build things, and that's how we've created it. Ino, I'm wondering, um, how you look at um authoritarian countries, dictatorships, monarchies, whatever, um, and providing Services inside of those. This has been a very polarizing issue, obviously. Um, some companies have chosen to not operate, for example, in China because of Human Rights issues and having to, you know, hand over dissidents in the case of a social network, let's say, or they're outright banned in them. Um, and then you have this Alliance starting, uh, the BRICS has expanded and added a bunch of countries, and there's talk about, Hey, maybe SWIFT, we're going to get off of.

Swift, and we're going to create our own BRICS version of Swift. Are you operating in those countries? How do you think about that? And there's a lot of hand-wringing about, Oh, we're going to be off the US dollar and off of Swift. What are your thoughts on that entire space? Take it where you'd like. So, the way how we approach this, that we ultimately look at, like, what are the markets that we want to be active in. China, as an example, I think the Chinese domestic market is a super difficult market to be active. But we have a huge team in China selling basically to Chinese merchants that want to go here in the US, and that's a very successful route. So, we try to be pragmatic here. Ultimately, if we can comply with the local rules, we will. And it's a trade-off, like, can you do business somewhere? There are countries where we have chosen not to go so far, also because the demand is

limited also maybe it's an unstable country. Um, we do it on a country-by-country basis at the moment. Now, what about this sort of anti-Swift movement? America has too much influence; the West has too much influence over the movement of money. They can do things like sanctions, as David's talked about on the podcast a couple of times. Is that real? Is there really going to be an alternative to Swift? I think there is a likelihood there will be alternatives, yeah. And Al, I think to your example on stable coins, like that could be an alternative longer term. Also, if there are issues with Swift, it just may not be a legislative alternative; it may be more technological, like yours and others. Yeah, yeah. But I think there are companies that also try to solve this, like to have less dependence on Swift, even in this Western world. Yeah, um, do you guys run sentiment inside of all these payment flows or getting a sense of like the economic health of certain countries and

um, has there been any thought to sort of sharing those so that um, you know, like in America we go through these things and Europe too, unemployment rate comes out, you revise it, uh, GDP numbers come out, you revise it, and nobody can actually act on these things until you're looking back 6 months, which is a ridiculous way to run an efficient. But I'm sure companies like yours or Stripe, Shopify, yeah, have you guys ever thought of working together to create a more Dynamic view of economies? It's certainly something that we want to do with the data. I think currently what our challenge is that most of our growth comes from um, share of wallet winds, so it's very hard to um, separate this from the underlying growth. Yeah, the moment we become a more stable company, and that's years away, then I think that's more possible. But it's like the data set that we sit on, like we have, I think, over a billion unique Shoppers in our platform, so it's a billion humans. Yeah, that's a in that's yeah so.

there's certainly more to tell um and and and that's absolutely interesting topic. Do you ever see PayPal in the market? I'm just curious what ever happened to it. Yeah, well, PayPal is an important partner of us, so uh we work closely with them, also offering um. We just did a press release on their new Express checkout that we do together with them. So, we see them more as a partner than a competitor. I think that's how we see them, yeah um. Last question, you we've made a lot of fun of this whole thing this past week, founder mode, manager mode, whatever um. But precisely for you, you work as a co-CEO, yeah, which is a bit of a unique setup um. But when it works, it can really work. And can you just describe us to us how you guys have built such a great business and how you divide and share and conflict resolve and what does it mean, founder mode versus manager mode, yeah. I think the way how we built the company together. So, Peter is the founder um, he focuses

currently more on the culture of the company, um, and is doing a lot of founder conferences, meeting our, uh, Merchants. We all meet our Merchants quite often. I see a couple of merchants on Thursday in San Francisco, so that's an important part. I think that's how we, uh, do this, but it's a partnership already, like, for 13, 14 years, like, that's the time that I know Peter, so it's a very natural way of doing things. And we have both our strengths, and we have both our weaknesses, and we know it from each other, and I think that makes it a successful combination. Thank you, you guys. Please join me in thanking Ino for joining App. Thanks.

Ingo Uytdehaage, Adyen | All-In Summit 2024

Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg cover all things economic, tech, political, social & poker.

Follow the besties: 
https://twitter.com/chamath
https://twitter.com/Jason
https://twitter.com/DavidSacks
https://twitter.com/friedberg

Follow the pod: 
https://twitter.com/theallinpod
https://www.instagram.com/theallinpod
https://www.tiktok.com/@all_in_tok
https://www.linkedin.com/company/allinpod

Subscribe to our clips channel for the best of the besties:
https://www.youtube.com/@allinpod?sub_confirmation=1


All-In Podcast

Aen's Impact on the Financial Services Industry

Aen, founded in 2006 and based in the Netherlands, has grown to become one of the largest payment processors in the world, processing nearly a trillion Euros in payment volume in 2023.

The company's significant growth is driven by its investment in new technology and a complete rebuild of the traditional banking infrastructure, resulting in better conversion rates for customers.

Aen's co-CEO, Ingo, emphasizes the company's competition with traditional players and its goal to lower payment costs and increase authorization rates through a global, data-driven platform.

The company aims to replace traditional banking infrastructure, having its own access to the Fed and a banking license in the US.

They focus on partnering with small businesses and software providers to offer banking as a service and expand into broader financial technology.

The company's international expansion from the Netherlands to the US has been crucial for growth, with the US now accounting for a third of their total revenues.

The Competitive Landscape of Technology Companies

The technology market in the US is more competitive than in Europe, where the company's brand awareness is higher.

The company works with major global brands like Google, Meta, and Nike, using them as referral customers to expand into the US.

Attracting a shareholder base in Europe has been challenging, but the company successfully listed in Europe and gained a premium for being a scarce tech stock.

Stablecoins are gaining traction internationally, with companies like Circle and Tether playing significant roles, despite Tether's legal issues.

The need for stablecoins in well-developed markets is low, but they may have a future in cross-border transactions.

The speaker's company is focused on partnering with stablecoin providers rather than launching their own, aiming to bring financial technology to customers and support their partners' success.

Expanding Financial Technology for Truckers

The company aims to leverage platforms with truckers as customers, combining industry knowledge with financial technology to address money laundering and terrorism financing.

They have transitioned from a European to a global company, establishing local data centers in India to comply with data localization rules.

With a long-term investment strategy, they aim to support international companies seeking to go domestic or cross-border, while also following their customers' expansion into new countries.

India's Regulatory Clarity and AI-Driven Growth

India is poised for a multi-decade Renaissance with clear regulatory rules, combining technology, regulatory knowledge, and banking licenses.

The company's use of AI for transaction routing has resulted in over 20% lower costs for merchants and has been successfully implemented in production.

With a focus on automation and a low employee-to-volume ratio, the company plans to use AI to further scale its operations and smartly follow the investments of larger American companies.

Operating in Authoritarian Countries: A Pragmatic Approach

The company focuses on execution and proving its capabilities to enterprise merchants.

It has a team in China selling to Chinese merchants wanting to expand to the US, taking a pragmatic approach to compliance with local rules.

The company is open to alternative payment systems to reduce dependence on SWIFT and is assessing market entry on a country-by-country basis.

Dynamic Economic Insights and Co-CEO Partnership

The speaker discusses the challenge of providing real-time economic data and expresses interest in collaborating with companies like Stripe and Shopify for a dynamic view of economies.

They highlight their platform's vast data set of over a billion unique shoppers and emphasize the importance of stable growth for future collaboration.

The speaker also shares insights on their co-CEO partnership, with one focusing on company culture and the other on merchant relationships, resulting in a successful business dynamic.