Some founders can find it difficult to accept that their startup baby is flawed – but Matt Bird takes a different view.
Bird already had a pair of retail businesses under his belt in We Are Gntlmen and The Shirt Society – where he “learnt the ropes of how to build a startup” – before founding FinTech aboard.
The startup enabled merchants to collaborate and launch multi-brand memberships that would include multiple benefits to the customer under a single subscription fee.
Despite securing an investment term sheet, he was clear-sighted enough to realise that the long-term prospects for the business didn’t stack up.
“As a founder, it’s important to look for a clear path to scalability throughout the process, and despite having a solid foundation for the business, we couldn’t see a way to scale it further,” he tells BusinessCloud.
“Investors were very interested in aboard, and we had secured a term sheet to fuel the next stage of growth. However, we couldn’t identify a way to grow the business to benefit both ourselves and the stakeholders involved.
“Sometimes, you have to know when to walk away, even when investors are prepared to back it and invest your time in other opportunities.”
Full of zest
A few months later, still in 2023, he teamed up with chief product officer James Lewis – a former head of product and COO at augmented reality RetailTech firm DigitalBridge – to found lemon. The business and Bird are based in London, with Lewis and chief technical officer Matt Parke – appointed in 2024 – based in Manchester.
The financing platform is designed to save businesses thousands of pounds on their SaaS subscriptions while improving vendors’ cash flow by getting them paid upfront.
“The idea for lemon was born whilst working on one of my previous ventures, which was a shirt company based on a subscription model,” explains Bird.
“We always had this paradox: wanting to get paid upfront, whilst our customers wanted to pay monthly. The tricky part was that those customers also wanted the discounted annual price for their monthly payments.
“This is where the opportunity first presented itself, and the more we looked into it, the clearer it became that B2B SaaS companies face the same challenges we had with their business customers. At the same time, we wanted to remove the personal guarantees and expensive credit that many SMBs use to fund their operations. Combining all of these needs into functionalities led to the birth of lemon.”
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Nothing bitter
It’s a memorable name. What’s the story behind it?
“Our main goal was to save SMBs money on their rising software costs as we were allowing them to finance their annual plans,” answers Bird. “This meant that the price would cost the businesses less on a monthly basis, so we took the first two letters of ‘less’ and the start of the word ‘money’ to form lemon.
“We wanted the name to be memorable, much like many consumer brands.”
The tech connects lenders – usually banks – to SaaS vendors, allowing them to offer their customers an annual plan discount, which can be paid back on a monthly basis. Through the lender, the SaaS vendor receives 100% of the cash up front, improving cash flow, and the customer pays this fee back in monthly instalments, which is far cheaper than the original monthly rate offered.
“One of our clients has a three-year deal on the table with one of their customers, which is worth £500K in value. However, the upfront cash is far more valuable to them than receiving it over a period of three years, so the client is prepared to offer the same deal for £400K if the customer can pay for those three years upfront,” expands Bird.
“For many SMBs, a £400K cash outlay is simply too much to bear, but with lemon, the client can input their deal into the system and we can automatically connect them to financing, through our integrated network of partner funders – whether that be Shawbrook, Siemens, or even our banking partners in the US.
“Our network of lenders all have different requirements and goals, and lemon succinctly matches the right opportunity, to the right funder and facilitates everything in between, all within a matter of minutes.”
The client can also choose the amount they want to pay towards lemon’s fees versus the cost of financing they pass on to the end customer.
Since it launched its lending product in October 2024, Bird says lemon has seen £30m of inbound demand, which he says is an “amazing achievement”.
“We’re also excited to see this expand into the US soon, where we have recently acquired our first customers and integrated with our first funders,” he adds.
Singing investors’ tune
Bird – a former lead singer in a pop rock band – reveals that lemon has just closed its seed round of funding despite a challenging landscape.
“Most founders have felt disheartened by unsuccessful or tricky funding rounds throughout their founding journeys,” he advises. “It’s integral that founders don’t take it personally when their raise doesn’t close, or the money doesn’t come in as quickly as they thought it might.
“You’ll hear more ‘nos’ than ‘yeses’, but don’t let rejections stop you in your tracks. Try to understand the investor’s perspectives and appeal to how they operate. Remember, each ‘no’ is a chance to refine your approach and get closer to a ‘yes’.”
FinTech 50 goodness
lemon starred on our FinTech 50 ranking late last year.
“We were delighted [as this] highlights our business model’s credibility and scalability,” says Bird. “As a niche FinTech operating predominantly within the SaaS space, this recognition helped us showcase the value of our product on a wider scale, increasing visibility to potential customers and investors alike.
“We also read BusinessCloud, so on a personal note, it was really nice to see ourselves on there!”