From the poker table to the yeshiva to revolutionizing the accounting world

Two weeks ago, a 61-year-old man with graying hair walked around the streets of Tel Aviv, and no one shot him a second glance. That never would have happened in New York. That man, Daniel Loeb, is one of the most well-known investors in the United States, the founder and director of the prestigious asset management firm Third Point. He’s also known for his scathing letters to companies, using meticulous wording to deliver implicit threats to boards of directors. With the immense power of his company, which now manages assets totaling nearly $20 billion, he has already managed to lead the replacement of Yahoo's management and the appointment of Marissa Meyer, to oust the longtime CEO of Sotheby's and more. But Loeb came to Israel mainly because of Isaac Heller.

Loeb's venture capital arm is invested in several Israeli companies: SentinelOne (the largest cyber IPO in Wall Street history) and the unicorns Forter, Verbit and NextSilicon. Loeb checked what was going on in all of them, but his time in Israel was mostly spent signing off on a new investment in Heller's company, Trullion, in its first funding following the seed round. The other investors in this round are also big names - Michael Eisenberg's venture capital fund Aleph, Artie Minson (formerly of Time Warner and WeWork), Bob Mylod Mylod (Chairman of Booking Holdings), Vik Shah (Zoom), David Bernstein (Airbnb) and Brandon Zell (Slack), all of which together have invested $15 million. We are not used to seeing such a strong group of reputable investors here in Israel, especially at such an early stage.

What is it about Heller and Trullion that attracted them? What is so special about this start-up, which was just established in 2019 and merely employs 30 people? Well, the truth is, almost everything. It deals with a "non sexy" field - artificial intelligence tools for accounting. It has been based in Jerusalem until now. And its founder is unconventional. He was born in Dallas to a secular Jewish family, was an entrepreneurial child, made a fortune from poker games in Macau, worked in Iceland, lived in grand style and then became religious. His Rabbi set him up on a date with Rachel Waltz, the daughter of Oscar-winning actor Christoph Waltz (who was one of the first investors in Trullion). The couple married, immigrated to Israel, and had three children (whose ages range from one month to 3.5 years). Heller went on to study at a Jerusalem yeshiva. In the midst of all this, he suddenly established a start-up that wants to disrupt one of the dullest areas there is - accounting.

"In the mornings I studied Talmud and in the evenings I sat down to plan and characterize the system, even though I was not a programmer," Heller, 36, tells Calcalist in the first interview of his life. "And now this field of accounting technology is going to be bigger than legal tech. Companies are paying more and more to accountants, and there are still a lot of difficulties, mistakes and scams. The industry is ripe for disruption, and everyone understands that. I do not know how to this day no one has done what we are doing."

From basketball cards to Enron to the wheeling and dealing in Israel

 

Heller's life story could be a movie. But before we go to Hollywood, Heller has been learning about how some less than "kosher" business dealings work in Israel. "I was supposed to sign a contract to move to new offices in Tel Aviv. I sat and waited and waited, and the guy I was supposed to sign with did not come, he just disappeared. After a few days I saw the space we were supposed to rent advertised again, but at a much higher price". In the end Heller found other offices in the Montefiore neighborhood of the city, where a start-up scene is also developing. Since then he has been the target of Israeli business chutzpah.

"It seems like everyone who hears that we are opening a startup immediately tells his friends, and you can not imagine how they are attacking us now from all directions. They try offering us everything - ice cream and coffee machines for our workers, murals costing thousands of shekels for our walls. I only gave in to one item - music in the bathroom. I think that’s a really good idea. I can pick the playlist and play my employees music that I like. When I was a kid in the US the music I listened to was considered 'indie', not really familiar, and in Israel Leonard Cohen and Talking Heads are part of the mainstream. It’s fun.” He smiles and adds, “and I’ll throw in some country music, to introduce it to the Israelis."

He arrives at the offices every day by train from his home in central Jerusalem, near Rehavia. "It is very important for my wife to live there and I love it - only in Israel can you live in two worlds: on the one hand one of the oldest cities in the world, and within an hour's drive - Tel Aviv, invented for all this," he says as he points to the bustling TOHA complex of hi-tech workers seen through the windows of the WeWork room where I met him, before the company's new offices were ready.

And yes, he is also experiencing the difficulty of the industry in Israel in recruiting workers. "It's hard for us to find quality people. We have three new workers now, but we really need around 10." But Heller, who is in a good mood throughout our conversation, remains optimistic. "We will recruit 20 employees by the end of the year. We are a company that sells software that is infrastructure, and our average contract with customers is for 3 years, it will make recruitment easier."

Trillion’s software enables automatic upload of documents - PDF files, Excel spreadsheets with data, even contracts with customers and suppliers - to accounting systems and smart data entry via AI. Its advantage is that it conforms to the latest regulations, which are constantly updated, at the rate that existing software - those developed by German SAP and American Oracle decades ago and dominating the market - are unable to do, and therefore require extensive manual input. "And we already have 100 clients, including Israeli companies like Lemonade, Taboola and Pagaya, and we have partnerships with huge international firms, Deloitte and EY, who recommend us to their clients, and there are 15 other large American accounting firms that use our software themselves. We didn’t even try to sell it to them!"

How to sell without trying to sell?

"Before we started offering the system to accountants, I directed the product to CFOs. So in early 2020, just before the Corona, I made my own ad on LinkedIn that asked who wanted AI to automate financial reports. By the summer, seven customers had already signed with me. At the same time, the Covid-19 pandemic scared me a lot because I only had half a million dollars of angel investment left that was about to run out. I realized that I had to raise more money, as none of these signed customers had paid anything yet and the market was frozen. The Israeli funds rejected me, because people here mostly like cyber ventures, but in the United States there is more awareness of the field of finance, and there they really were hot for it."

Don’t you fear that the giant companies in the industry or large software companies will develop similar systems which will leave you behind?

"Dealing with the giant players in the field will certainly be the most challenging part of Trullion’s journey, but we are building a product that can address all sides and reassure them - the financiers in the organizations will know that there are no mistakes, and also accountants, whom I know don’t check everything, only a sampling, it will provide peace of mind. I've seen the problems in such systems everywhere I worked, from airlines to real estate companies, and the puzzle pieces connected for me. No matter what the size of the company, there will always be difficulties around issues of revenue recognition and accounting, and regulation is only getting more complicated, the demands from companies are growing."

You studied history, you played poker, you studied in yeshiva, you married the daughter of a famous actor. Why did you get involved in an accounting startup?

"Ultimately, every time we talk about accounting it goes back to Enron - and don't forget that I'm from Texas."

The Texas-based energy giant Enron, which employed about 30,000 people, collapsed in 2001 after it was revealed that its reports had been distorted for years; the company lost more and more money while its executives had golden toilets at their homes. The scandal led, among other things, to the liquidation of Arthur Andersen, one of the largest accounting firms in the world (and also one of the largest in Israel) which was responsible for Enron's reports - and a profound change in American regulation regarding financial reporting and corporate responsibility. The Sarbanes-Oxley Act that followed it changed the rules of the game, leading to a reduction of issues on Wall Street in the first decade of the century, because companies found it difficult to cope with the new and stricter reporting requirements.

You were a teenager when the Enron affair exploded, how did it affect you?

"Alongside the sports sections I always read the business sections as well. I was always an entrepreneur. Already at the age of 12 I had an eBay store: I would go to Walmart and Target, buy packs of basketball cards, take out the more valuable ones and sell them on eBay one by one at a much higher price. I made a few thousand dollars even before my bar mitzvah," he laughs.

But then his business collapsed with a big scandal, at least in the terms of a 13-year-old boy. "I heard about a boy older than me who wanted to sell a large collection of cards that no longer interested him. It had amazing cards. I asked my dad for some of the money I got for the bar mitzvah and took it to school to pay this kid, but then the coach caught me with the money and it became a big mess because 13 year olds could not walk around the school with such large sums of money. My parents had to come and I had to close the store on eBay."

From globetrotting poker player to becoming orthodox and going to the Oscars

But Heller's love affair with cards was not over. From basketball cards he switched to poker, and used to host Texas Hold'em games, at his parents' home and later at his University of Texas dorm in Austin, where he studied for a bachelor's degree in history. "I wanted to travel to Las Vegas to become a professional player in competitions there, but my mom had a hard time with it," he says. "When I graduated I wondered what to do and consulted with one of my professors. He told me, ‘Go to a country with a fast-growing and prosperous economy and teach English there.' I debated between South America and China, and in the end I chose China because I saw that there was a kind of Vegas in Macau and I could play poker there."

In 2007 he arrived in Shenzhen, a city full of foreigners near Macau. "I scheduled my teaching so it was concentrated over three consecutive days and every Thursday I took the ferry to Macau for a long weekend. I won a ton of money because the Chinese play poker completely differently, they are very aggressive in betting; if you have patience you will beat them. I lived well, I was not religious yet," he smiles.

"But I realized that this was not a career, and that I had to go back to the U.S. After tasting the good life I came to the conclusion that I needed to study for an MBA to earn $100,000 a year. I went back to Texas to study, and that’s when I really fell in love with accounting."

Apart from a strong desire to make money, living the good life was precisely what brought him closer to religion as well. "I started working on a strategic team at Sabre, which developed a technology that most tourism sites run today (and traded at a value of $3 billion). I was sent to a project in Iceland, which meant I had no permanent home. When traveling between Texas and Iceland I always stopped in New York. I enjoyed myself a lot , and I remember thinking to myself that I have too many good things. For example, there was one first class flight from Dallas to Sydney; I knew the ticket cost $12,000, and I thought to myself on the flight: 'I did nothing special to get such pampering. At that time, in New York, I met by chance an interesting rabbi. We sat and talked over a schnitzel and he asked me what I know about Judaism. I thought I knew pretty much everything, I always went with my family to synagogue and I went to summer camps, but I realized that I actually know nothing."

Then, near the age of 30, Heller began to delve deeper (when he recounts the first time he was exposed to Ethics of the Fathers, he struggles to hold back tears), keeping Shabbat and kosher, "but I was still a party guy, and still single, and went out on dates a lot. One day the rabbi told me I must start meeting more serious girls. He presented me with five girls for matchmaking, and I told him, 'Choose the one you think is best.' I met Rachel at Washington Square Park in New York for coffee on Sunday, and she initially told me I was not religious enough for her. She was too religious for me - at that time I did not wear a kippah, I ate in non-kosher restaurants (not meat). But at that moment I knew she was the one, and one year later we got married. According to my friends it was too fast, but according to the religious community it took too long."

Heller does not like to talk about Rachel's family, but within the story of his colorful life - this stands out. Her father Christoph Waltz is a Vienna-born, Christian actor who had many roles in theater and television but only at a later age did he make an international breakthrough. In Quentin Tarantino's Inglourious Basterds he played the Nazi officer Hans Landa, nicknamed the "Jew Hunter", (his career’s most famous line came from that film, the exclamation "Au revoir, Shoshanna!"). He then went on to star in Tarantino's Django Unchained in which he played Dr. King Schultz, a German bounty hunter in the pre-Civil War United States. For both of these roles, he won Academy Awards as Best Supporting Actor.

Rachel's mother, Jacqueline , a music and movement therapist, is from a Jewish family from New York. The two met when Waltz was studying in the city, at Lee Strasberg's Actors Studio, in the late 1970s. They married and moved to Germany, but Jacqueline felt cut off from the Jewish community and moved the family to London when Rachel was two years old. When she was 17, her parents divorced, and later the three children became closer to religion. Rachel even came to Israel to study at a religious high school in Jerusalem, and then went on to New York to study social work. Her brother also studied in Jerusalem, in a yeshiva, was ordained as a rabbi and still lives in the city. Her sister is an architect and lives in Tel Aviv. That sister got married in Israel in 2013, shortly after her father received his second Oscar, and when he arrived at the wedding in Jerusalem he was mobbed by the paparazzi. When Rachel married Isaac in 2016 the lesson had already been learned, and the wedding took place in New York. The Waltz family, like to keep a low profile, and Heller also requested not to talk about his famous father-in-law.

From accounting ideas, through Mea Shearim to a life-changing tweet

After the wedding in New York, Rachel Waltz wanted to return to Jerusalem. "She was the one who pushed for the move to Israel, and after we got married we decided that we would come for one year to start our family here," says Heller. "I bought tickets for a flight to Israel in January 2019, and the plan was to study here at the yeshiva, but at the same time I registered Trullion- I began to think that we should turn all my ideas on accounting challenges into a company. Trullion was registered in the United States, but the idea was to build it here in Israel.”

Why build the company here?

"I came across a Lemonade ad by chance, and I checked what this company was. I was amazed at the huge disruption it is making in the American insurance market - and I discovered that it is Israeli. The more I checked the names, the more I saw that it had a lot of Israeli workers, not just the founders. I understood that it was good to build a company here, with such employees." He did not imagine then that Michael Eisenberg, who had invested and accompanied Lemonade from the beginning, would do the same for his company.

Heller, his wife and eldest daughter, who was then a year-and-a-half old, landed in Jerusalem. In the mornings he studied at a yeshiva in Mea Shearim, in the evenings he tried to figure out what system he wanted to build, with no background in programming, "but I knew what the system needed to do. I recruited three programmers pretty quickly, and by the end of 2019 we already had the start of a product. I received money from my angel investors and left the yeshiva." He continued to study outside the yeshiva, but he admits that today he no longer has time for it.

After the ad on LinkedIn and the first customers, in the summer of 2020, Eisenberg entered the picture. This happened after the German payment giant Wirecard collapsed and a "hole" of $1.9 billion was discovered in its balance sheet. 20 years after Enron, and it turns out that there are still quite a few very unbalanced scales. Eisenberg identified potential here, tweeting that he is looking for disruption in an industry controlled by a few large firms that together bring in about a quarter of a trillion dollars a year. Heller did not have a Twitter account at all, but he saw the tweet, hurried to register for Twitter and on the same day replied to Eisenberg briefly: "There is one being built in Jerusalem!". "We got along right away, and Aleph (Eisenberg’s fund) led our $3.5 million Seed round along with Greycroft." And then came the big investors from the United States, led by Loeb ("he understands the field well, as an activist investor who makes money from reading reports").

After Eisenberg's move, the company moved from Jerusalem to Tel Aviv, Heller added as co-founder Amir Boldo, who was appointed VP of technology, and it was given a new name, instead of Smart it was renamed Trullion.

What is a Trullion? Real millions?

"It's short for True to Millions, and it means two things: it's not only the correct reporting of numbers, but also the transparency and importance of numbers on a more philosophical level. There are 64 unicorns in Israel today, what does a billion or a million mean today? If all those numbers are not based on true accounting, what do they actually say? There is now a great erosion in trust in numbers, they do not have the same iron-clad meaning that they used to have. You can invent things, people believe things just because someone said them. Even in the case of the WeWork story for example - and their former CFO is invested with us - all the funds and all the investors went with the $45 billion value after they saw the financial reports and there was a signature and internal audit on those reports. Only when the prospectus came out suddenly were they shocked by the numbers. Company executives will always try to paint their business the best way they can, and if there is an opportunity to play a little, everyone will take advantage of it. This is the world we live in now."

How big can this field be?

"Not like e-commerce, but more than Legal-Tech. We operate in a market that is under the penetration of software and automation."

How is it that no one has tried to do that until now?

"I ask myself that every day. Even now there are not many start-ups in the field, there should be more. Most companies are set up by young people, and they operate in areas that young people know and love. Accounting is not one of them. See for example the disproportionate number of companies in the field of cool luggage or tourism services in the United States, and in Israel there is a disproportionate number of cyber companies."

And yet you are here. When you lived in the U.S. you gave lectures on Israel as a start-up nation, what is it like to live it now?

"It's refreshingly real. The pace and determination here is much higher, everyone is hungrier and more aggressive. If I had stayed in New York everything would have happened much more slowly.”

But in the United States there is more access to capital, no?

"The issue of money has been balanced, it is already similar between Israel and the United States, but the ecosystem of venture capital funds here is less good than that of the entrepreneurs. The founders here are amazing, the local funds are lucky to operate here. Indeed, access to talent in Israel is more difficult than I thought it would be, and their costs are already the same as in the United States.”

So you're staying here?

"We thought we would move to the West Coast of the U.S. after the pandemic. But just this year we made aliyah officially, and a month ago we had a son, after two daughters, so in the meantime we abandoned our plans to return to the U.S. Everyone asks me if I am going to stay and I answer 'I am not leaving.' I have a rare opportunity now. My wife has a hard time with three children and the fact that I'm never home, but I have to play the hand I'm dealt."