Francisco Fernandez started Avaloq from a small buyout of a five-member computer department team of a bank, turning it into a giant in software. He speaks to finews.asia about his entrepreneurial journey so far.
Francisco Fernandez, what is your role now within Avaloq?
My official title is Chairman of the Board. Of course, you can never forget about the role you have as the founder. People will always associate my name with Avaloq.
What prompted the decision to sell a part of your company – to private equity firm Warburg Pincus – in 2017?
Age. I’m 55. Apart from liquidity, I wanted to open up shareholdership to a professional investor, to teach us to become a bit more professional in areas such as financial discipline, etc. and to develop the company further.
Didn't Avaloq have plans to IPO?
Of course. A company of this size, sooner or later, will see an IPO as one of the ways to finance its growth. For Avaloq, an IPO has never been a target on its own.
What worried you in the past when you had full control of Avaloq?
Actually, I don’t worry much. I take challenges as they come and challenges are there to be managed, or there wouldn’t be any need for us as managers. And that’s the fun thing about creating companies.
Success is not an escalator; it’s a bumpy road. When you get to obstacles, you have to take responsibility and manage them.
What were your biggest challenges growing the company?
Every phase has its challenges. The last difficult thing was the financial crisis in 2008, which hit us one or two years later. We managed and quadrupled our earnings in the five years after. But every crisis brings chances and opportunities. We took it like this.
«Going international is probably one of the biggest challenges for a young company»
We changed our business model from selling software and transformed ourselves into a software-as-a-service company, and then the BPaaS (business process as a service) model, delivering banking for banks.
How do you approach expanding into new markets?
Going international is probably one of the biggest challenges for a young company because the first few years of any startup is about the product – engineering, technology. But then you suddenly have to deal with a whole new set of challenges that you didn’t have to deal with before, including culture, working in different jurisdictions, etc. We were lucky that we could follow our customers.
«I believe in value-driven companies»
We deliver to international banks in Switzerland like Barclays, Deutsche Bank and the like. Those banks wanted to get the same quality of service or the same technological solutions elsewhere, which speaks about the quality of our products. It was easy to follow those customers abroad by leveraging our existing customer relationships.
What is the secret of your success with Avaloq?
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