One of the absolutely hardest things in startups is to start building enterprise software solutions from scratch, especially for clients in highly regulated sectors. I had somewhat of a brush with it myself, in my first company in the Netherlands, where we built an online legal services product for SME clients. It was relatively minor, because our clients after all weren’t enterprise, but since the legal services sector itself is highly regulated, it was still an uphill battle. We scraped by, by doing guerilla marketing, serving clients that the law firms didn’t want to deal with, and staying under the radar of the Netherlands Bar Association, and we managed to grow to an acceptable traction level. But I remember telling myself I never want to do something as hard and regulated as that ever again.
Imagine how much harder it is if you’re in your twenties, and you started building a compliance automation solution for banks and other financial service providers. That’s exactly the story of founder Stoyan Lozanov, and his company OMNIO.
Upon graduating from high school in Bulgaria, Stoyan relocated to Australia, where he earned his Bachelor’s in business administration, and started a cleaning services business that helped him pay his way through college. After a few years, he returned to Bulgaria, where he got a job as a compliance officer in a brokerage firm. As the company was quickly growing, it wasn’t long before Stoyan found himself in charge of a team of 20 compliance officers. This was where his previous business experience and newfound deep understanding of the financial and regulatory compliance field found an infraction point. “Things can be done so much better in the compliance workflow”, thought Stoyan, and started making notes in his spare time on how he would redesign the process.
By 2020 the time came to give it a start, and Stoyan started developing the first iteration of what would become OMNIO. “One thing I quickly realized while working at my old job”, says Stoyan, “is that when people say compliance automation, most of the time they mean identification automation. There are a lot of tools to verify names, birthdays, and addresses, but the onboarding part is just 20% of the process. The rest is problem-solving, and that’s all overwhelmingly still done manually by compliance officers”.
When we invested in OMNIO with Vitosha almost three years ago, in 2021, Stoyan and his then-co-founder, who has since left the company, were optimistic about the business development prospects. As we recently sat in the Vitosha office meeting room for a regular update, Stoyan chuckled: “Can you imagine, some of the clients we started onboarding back then, we’re still negotiating with”. It’s not easy to close financial institution clients when you’re a new kid on the block, without prior history in the business and without the shiny logos of big clients. But as Stoyan says, the trick is to survive, not give up, and take it one day at a time. “Today we have major financial organizations as our clients, in Europe, , US, Singapore, and Australia, and together with the additional funding we raised since Vitosha first invested in us, this allows us to work on a monthly break-even basis.
As Stoyan likes to point out, the main difference between OMNIO and other players on the market is that OMNIO works from the compliance workflow perspective, and not from a tech company one. “Our first and foremost thing is not the tech, but the fact that we understand the processes and scenarios thoroughly. Then we build the tech that automates it”, explains Stoyan. A central part of the compliance workflow is to map the steps and elements of the process for auditors and regulators. “And that’s where with OMNIO we’re head and shoulders above the competitors”, he adds.
Having grown its team to 10 people, and with revenues this year on chart to grow 250% compared to 2023, Stoyan affirms that OMNIO’s outlook is bright. “We validated so many aspects of our business over the past years. Not just in terms of product, but also on how we market and sell to our clients. Now we’re ready to go big; our main targets will be financial institutions in Asia and North America”, he adds. “Once we’ve successfully scaled OMNIO, a very interesting angle will be the B2G market, where we can offer our services directly to regulators and other oversight bodies. But we’ve learned the hard way how much time it takes to do business development in the regulatory technology field, so we won’t be rushing that.” One step at a time is Stoyan’s newfound motto, and with Vitosha we’re excited for the journey ahead of OMNIO.