Local start up STORM wants to be a ‘unicorn’

February 06, 2018 | News

peter-endeavor

BY Edd K. Usman

RAISING a unicorn, or a startup with a US$1 billion valuation, is every entrepreneur’s dream.

STORM Technologies, an award winning human resources (HR) start up wants to be a unicorn. It will have that opportunity now, after it won late last year, the top prize in the first Philippine regional Startup World Cup competition, a highlight of the Slingshot ASEAN: Startup and Innovation Summit.

“Do you see STORM Technologies becoming a unicorn?” we asked Peter Paul V. Cauton, 42, a graduate of Management at Ateneo de Manila University and founder and CEO of STORM.

“Hopefully, yes. That is always the dream of every entrepreneur. We really want to represent the country and put the Philippines on the map.” he said, his face virtually lighting up the small interview room.

Startups from the 10 members of the ASEAN vied for the right to compete in the May 2018 Startup World Cup in the US which carries a US$1 million purse.

Cauton was in Singapore when his team received the award.

“When it happened, I was celebrating by myself in a hotel cafe and I was crying because I was just so happy. I was so happy because it was my team who did it. As an entrepreneur, that gives me more pride than having done it myself,” he shared.

STORM earned the trust of Endeavor, a mentor capitalist group whose business model is breaks down economic and cultural barriers to entrepreneurship through advising from its network of world-class business leaders. Thus STORM won’t be alone in its attempt to summit the start-up mountain and achieve the rare unicorn status.

Based in the New York City, Endeavor, established in 1997, is a non-profit organization with presence in 23 markets, including Indonesia, Malaysia and the Philippines.

Manny Ayala, managing director of Endeavor Philippines, said that after nine months of intense processing, Cauton officially became an Endeavor entrepreneur, giving STORM an opportunity to tap into Endeavor’s global network.

“We can help him into getting access to network, access to mentors, access to capital and access to talent,” Ayala, a strong supporter of the startup community and a common fixture in startup events said. He presented Cauton the Endeavor certificate which “simply memorializes that he is now officially a member of the Endeavor family.”

Ayala said the process of selection for an Endeavor entrepreneur involves, among others, looking at the entrepreneur, looking at the business, and looking at the timing.

“He’s gone through nine months of interviews, assessments, and he was found to be a true-blue Endeavor entrepreneur. We will help him scale up, bigger and faster. That’s what we are going to try to do,” Ayala narrates.

Cauton recalled that his career started in HR in which he managed benefits and his experiences there—ranging from unmatched benefits to inelastic management thinking—was the impetus for creating STORM.

STORM started as a flexible reimbursement system using a Software-as-a-Service (SaaS) platform. It empowered employees to trade their unused benefits into credit. Employees can spend, out-of-pocket first, for whatever agreed and employer approved benefits was available. The would then submit the receipt for reimbursement through the system. The first iteration of his company enjoyed a steady growth and made profits as a bootstrapped company.

Soon the limitations of the reimbursement-SaaS model, became apparent. This included liquidity, abuse such as forging of receipts and human error in reimbursements.

He then scaled up—a riskier yet more innovative idea—creating an internal marketplace called STORM Flex where employees could convert their current benefits and use the resulting wallet to buy goods. He raised US$100K in seed money to executive the pilot. That risky move gave the company quadruple revenue for back-to-back years.

Then in 2015, technology company Xurpas took notice of STORM as it did a Series A fundraising and invested $4.3M to the startup to ramp up its operations. The investment gave Xurpas 51 percent ownership in STORM.

Presently STORM manages the benefits of 100,000 employees from companies such as Nestle, Coca-Cola, L’Oreal, and Sun Life.

Cauton is now awaiting approval of a patent application for STORM Flex, which he said is “the only benefits platform and online marketplace that allows employees to convert their benefits into points.”

Interestingly points are spent for differently per generation. Millennials prefer travel, fashion (mostly sneakers), electronics and accessories (like selfie sticks); Generation X is partial to kitchen stuff and furniture because many are starting and supporting families and, interestingly, Baby Boomers buy learning and skills courses.

“A lot people think about doing things but never really do so,” Cauton cautions.

He advises that for would-be entrepreneurs to execute their ideas means to try harder, talke to people and get mentors. The formula worked for him as he is on his way to achieve unicorn status. (with RGBT)

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Article originally published last January 31, 2018 at Malaya Business Insight


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