Rapyd CEO: "We moved to profitability this year and AI will triple our EBITDA margins in the next three years"

"Rapyd is an Israeli fintech company that builds financial infrastructure for companies developing financial applications. Established in 2016, we operate with 20 offices and 850 employees. Over the past year, our infrastructure processed $100 billion in transactions," Rapyd CEO Arik Shtilman

You made a significant acquisition recently.

"We acquired three companies, and nearly a year ago, in 2023, we completed our largest acquisition to date by buying PayU. PayU has 1,000 employees and $300 million in revenue. This acquisition is part of our preparation for a public offering planned for 2026. It will enhance our market position and global presence in the payments industry."

What is the status of the acquisition now?

"It's a complex deal that requires approval from seven regulators worldwide. We have received approval from six so far, and we expect to complete the process in October. This acquisition will double Rapyd's size to 1,800 employees globally and increase our revenue by 50% to 60%. We will then become one of the five largest companies in our field worldwide."

How has the current war affected Rapyd's activities?

"The immediate impact was a reduction in manpower as many of our employees were drafted into the reserves. However, we adapted quickly. We lost some customers, which cost us between $15 and $20 million in revenue due to the BDS movement. I told our marketing teams that we are not ashamed of our Israeli identity; if a customer doesn't like it, they can leave. On the other hand, some customers actually prefer to work with us because we are an Israeli company."

What is the impact of AI innovations on the industry and on Rapyd specifically?

"AI will dramatically change the way people work. Some companies have already announced layoffs due to AI’s ability to perform human tasks. In fintech, many tasks can be automated with AI, leading to significant changes. This should lower financial service costs for the public and increase profitability for companies. At Rapyd, we have been working on AI since 2020. We plan to automate 70% of back-office services (mainly transaction and document processing) by 2026. This will significantly improve our profitability, as 70% of our costs are personnel-related. Although we are already profitable this year, this development will enable us to triple our EBITDA margins in the next three years."

Do you see startups with advanced AI technologies emerging?

"It took me a long time to realize that regulation in finance can be both an advantage and a disadvantage. It slows down the rapid introduction of new technologies. Currently, our competition includes fewer startups because Rapyd is so large."

Are there new companies similar to Rapyd?

"Every week, I receive calls from VC funds about startups they claim are the 'Rapyd of Nicaragua or Romania.' This is encouraging, as it shows how long it takes to build infrastructure and secure regulatory approvals. We are five to six years ahead of these competitors in terms of scale and regulation. However, there are mature companies that offer similar benefits like Stripe."

Has fintech lost its appeal in recent years?

"Yes, I’m not sure why, but it seems to have become less exciting for investors. Nonetheless, it remains a lucrative sector. As global GDP grows, fintech can also expand. I am confident that fintech companies will endure, while some cyber and AI companies may close. Fintech is still a promising field."

Watch the full interview in the video above.