A Premiership manager mentality, “bulletproof coffee” and data analytics; it can only be a start-up. Eimear Reilly speaks to Trustev CEO and co-founder Pat Phelan
Since its inception four years ago, the Dublin Web Summit has brought together many leading investors and start-ups. Most notably the US ride-sharing app Uber, which is currently valued at $18 billion, secured $26.5 million in funding from venture capitalist Shervin Pishevar during the Web Summit in 2011 over a pint in Bruxelles. Uber now operates in more than 230 cities globally.
Another start-up with global aspirations is Cork-based company Trustev who announced one of Europe’s largest ever seed rounds of $3 million at the Web Summit in 2013. The company provides anti-fraud and identity verification for e-commerce merchants in real time, identifying whether a transaction is fraudulent or not using its “data fingerprinting” software.
“2013 was a crazy year” admits Trustev’s CEO and co-founder Pat Phelan. The company won first prize at the SXSW Accelerator competition aligning Trustev on the same path as previous success stories at SXSW like Twitter and Foursquare. Trustev was also named by Forbes magazine as ‘one of the hottest global start-ups of 2013’, secured $500,000 in additional investment from Notion Capital and was named 2013’s top technology start-up in Europe by the European Commission – a successful year by any standard.
Phelan, a serial entrepreneur, has had a more interesting career path than most; initially training as a butcher and a chef, he then set up a recruitment agency and ran a chain of internet cafes. “I am a problem solver first and foremost, if I see a problem I try to fix it”, he says. “I saw a problem with the cost of data roaming charges among my Bangladeshi employees in the restaurant and that’s how Cubic Telecoms came about”. Cubic Telecoms began providing SIM cards which enabled users to make low-cost phone calls anywhere in the world. The company was subsequently sold to investors in 2012 and Phelan invested the proceeds in Trustev with his co-founder Chris Kennedy, who was Phelan’s first hire at Cubic. “A start-up is a journey and you create a bond with the people who have been there from the beginning; you’ve been in the trenches together and that’s special. You look at any successful Premiership manager, he brings his own guys in with him and it’s the same here at Trustev. I’ve built up a relationship with these guys over the years.”
Supportive investors have also been extremely important to Phelan. “We’ve been so lucky with our investors, who not only provide us with capital but amazing support. You need a venture guy who is a bit of a dreamer to come along with you”. Phelan’s friend of over 30 years Liam Casey, CEO of PCH International was Trustev’s first investor. “Liam has been invaluable. He’s always on the other end of the phone if I need advice.”
Phelan is quick to dispel any false illusions of a glamorous life as a start-up CEO. “When we began we were in a windowless room beside a waxing clinic and if we needed to work to midnight we stayed there, slept on the floor if we had to.” The company now has 30 employees in the Cork, New York and Dallas offices. As Trustev’s business is expanding globally, so too is Phelan’s workload. “Because I’m working in so many time zones it’s often a 5am to 12pm working day”. The secret behind his ability to rise so early? Bulletproof coffee; a combination of two tablespoons of Kerrygold butter, 1 tablespoon of coconut oil and coffee. “I swear by it.”
Trustev has recently announced a roll out of its services with the retailer Radio Shack across their American stores and online. In order to head up the company’s expansion into the American market Phelan himself has relocated with his family to New York earlier this year. “Essentially the system is broken and we intend on fixing it”, he says. “There is no incentive for companies like VISA to provide a solution, as the retailer is the one who carries the loss.” Phelan’s own personal credit card was recently hacked in New York.
He also has had his Irish credit card declined as it has been wrongly suspected as fraudulent. “I constantly have so many problems using my Irish card here in New York that I end up just transferring money into my American account at the start of the week which is less than ideal”, he says.
Trustev uses over 200 pieces of data to analyse a transaction. “We look at the behaviour of the customer, the velocity of the transaction or whether there is a proxy in place”, explains Phelan, “and we have an incredible data scientist from Serbia and as of December our models will be fully automated with machine learning and that’s really incredible because machines don’t make mistakes.”
Phelan admits with the high growth trajectory that the company has experienced it is difficult to retain the start up atmosphere. “We really have some of the best people at Trustev. With the team increasing from three to thirty in such a short period of time it’s difficult to retain the small start up atmosphere but it’s one of my main priorities”, he says. “When hiring I don’t see a male or female, I see a team player. Employee number four here at Trustev left her job of nine years at Microsoft to come with us on the journey. I would love to hire more women but I think constantly drawing attention to it makes it worse.”
One of the most exciting start-ups that he has seen this year is Dublin-based Restored Hearing. “They are doing amazing things. They’ve designed this material that blocks out certain sound frequencies. I think the opportunities are limitless.”
And what lies in the future for Trustev? “We are a global company, so further expansion in the American market”, Phelan says. With companies like Twitter and Facebook introducing a “buy” button, the demand for fraud detection is set to increase and Trustev intends to be ready for when this happens.