A $billion+ fintech unicorn nobody has ever heard of. This just reminds me that opportunities abound, especially to focus on particular workflows that are sometimes buried in the b2b world...
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nCino S-1
71–80 of 93 posts
Re: nCino S-1
#72Earlier quoted context omitted.
It's built on Salesforce. They serve mostly mid-size regional banks. It's honestly super cheap for what it is -- its no wonder they're gaining as much traction as they are.
I'd never consider this until I could self-host. Way too much regulatory "scaries" when dealing with money. Remember that admin permission clearing command accidentally committed in Production last year that killed hundreds of SFDC orgs last year? What I'd do to listen to that bridge call..
Why would your own engineering team be less likely to make a mistake than SalesForce?
Re: nCino S-1
#73There's some discussion in this thread about the less-sexy corners of the market that are getting eaten by software. What I'm wondering about is whether these corners yield the incredible levels of profitability that we've seen in the past from the tech industry. In other words, with something like Facebook, once the basic product was operational, every additional million of users came with negligible acquisition cos…
I doubt it. If you look at nCino S1, their professional services revenues are not growing as much as their subscription revenues. PS revenues: 2018 20,094 2019 27,076 ~35% 2020 34,915 ~27% While subscription revenues almost double every year since 2018. This is also highlighted in their risk factors. What this indicates is that the deployment of such software still needs significant human touch. Based on the services…
Two comments about the PS revenue numbers:
1) The growing divergence between the subscription and PS revenues strongly imply that a "land & expand" model is prevelant (2018 1.9x, 2019 2.3x, 2020 2.95x) where they are able to push subscriptions up 21-28% post-deployment.
2) PS margins were 9%-10% in 2018 and 2019, and then dropped to 5.4% in 2020. Good to know that management continues to view PS as a sales enabler that pays for itself (i.e. break even or at least single-digit margin) executing their primary mission to drive high-margin subscriptions.
Re: nCino S-1
#74Earlier quoted context omitted.
I doubt it. If you look at nCino S1, their professional services revenues are not growing as much as their subscription revenues. PS revenues: 2018 20,094 2019 27,076 ~35% 2020 34,915 ~27% While subscription revenues almost double every year since 2018. This is also highlighted in their risk factors. What this indicates is that the deployment of such software still needs significant human touch. Based on the services…
Two comments about the PS revenue numbers: 1) The growing divergence between the subscription and PS revenues strongly imply that a "land & expand" model is prevelant (2018 1.9x, 2019 2.3x, 2020 2.95x) where they are able to push subscriptions up 21-28% post-deployment. 2) PS margins were 9%-10% in 2018 and 2019, and then dropped to 5.4% in 2020. Good to know that management continues to view PS as a sales enabler th…
Valid points. Land and expand is a great moat to have. Couple of other interesting points
Their contracts are non-cancellable 3 to 5 year contracts. So retention is almost guaranteed and in banks, beyond 5 years no one bothers to change the status quo. So this is a significant factor when it comes to predicting future revenue potential and profit potential.
On the costs front, hey have to pay a part of the subscription revenue to Salesforce. However, this cost grows linearly in proportion to revenue. The ratio has remained same throughout 3:1 (almost)
Re: nCino S-1
#75Earlier quoted context omitted.
I'd never consider this until I could self-host. Way too much regulatory "scaries" when dealing with money. Remember that admin permission clearing command accidentally committed in Production last year that killed hundreds of SFDC orgs last year? What I'd do to listen to that bridge call..
Why would your own engineering team be less likely to make a mistake than SalesForce?
Direct accountability.
Re: nCino S-1
#76Sorry if this is a dumb question but why is nCino built on top of Salesforce? Would they not be better off as a standalone system?
It's not uncommon and seems to work well enough. Another example of a public company that is built and sold on top of Salesforce is Veeva (VEEV (NYSE)).
Re: nCino S-1
#77A $billion+ fintech unicorn nobody has ever heard of. This just reminds me that opportunities abound, especially to focus on particular workflows that are sometimes buried in the b2b world...
Nobody from hacker news I would say. I have been working for two banks in US (not small) and both had nCino products.
So yes, opportunities abound and not all pf them are discussed in HN.
Re: nCino S-1
#78nCino is headquartered in my hometown, Wilmington, North Carolina. Even here, they keep a very low profile. Within the local entrepreneurship community, they're recognized as being very successful, but most people who live here don't even know who they are. They've done a nice job, and they deserve this. Congrats team!
As a former resident of Wilmington, this is incredibly pleasing to hear. The community has been striving hard for the past decades to move away from the concept of "just another beach town". I used to use the phrase "You get to live at the beach, now earn it" to motivate my students. While not as prominent, Wilmington, NC is also home to Castle Branch [1], which initially started as small background checking company;…
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Re: nCino S-1
#79Having been part of the Wilmington, NC startup ecosystem for some time at Untappd [1], I'm fairly certain that nCino is a spinoff of Live Oak Bank [2][3]. Also, another spinoff from Live Oak was Apiture [3][4].
[1] http://www.wilmingtonbiz.com/technology/2020/06/19/whats_nex...
[2] https://www.forbes.com/sites/amyfeldman/2016/01/10/fast-grow...
[3] http://www.wilmingtonbiz.com/banking_and_finance/2020/06/22/...
[4] https://www.starnewsonline.com/news/20180502/tech-company-ap...