And though the company rapidly changed its focus early on from trying to be just another portal to offering account aggregation services to businesses hoping to leverage the Web, the dream to be a big Internet blockbuster like Yahoo! or Amazon probably didn’t change.
What did change, however, was the climate of the business world. So how is Yodlee doing? The spotlight has moved far away from former high-flying pre IPO dot-coms, and Yodlee is left to quietly prove that it can survive as a real business.
Obviously the key (as always) is money. How much does the company have? How much is it making? Can it get more from public or private sources? Satyavolu uses the privilege afforded any private company not to reveal specifics, but he does say the company is on a “good course” to break-even. “We don’t critically depend on venture capital, but we might still take more,” he explains. Clearly the public markets are still going to be hostile to unprofitable Internet businesses.
“We absolutely have access to capital,” Satyavolu adds. “There is still a lot of capital around. It’s gotten a lot more difficult to get to it, in that the number of qualifying steps that you go through is a lot longer, the due diligence process is a lot longer.”
The company, which has 180 people and offices in London, Sydney, Atlanta, Redwood Shores, and Bangalore, has clearly had to get its house in order, laying off people and focusing on a single key market — the financial services sector. To Yodlee’s credit, Charles Schwab, Morgan Stanley, Fidelity, Citigroup and Bank of America and a variety of other major financial player are all clients.
As Satyavolu explains, Yodlee is trying to enable the Web Services vision of free-flowing data, without forcing clients to expend capital on Microsoft .Net and other Web-Services frameworks that are emerging.
From a financial services organization’s standpoint, he explains, “If you have $2,000 at Wells Fargo and $3 million at Fidelity, and Wells Fargo treats you like a 2,000 customer, you’re very unlikely to do anything about it. Whereas if they treat you like a $3 million customer because they know you have $3 million at Fidelity you are more likely to consider their private client services, which are probably a lot more lucrative than the checking account you hold.”
This kind of information transparency is now becoming more of a reality. “There’s still demand for what we do,” says Satyavolu.
So what happened to all of those Yodlee employees that thought they were going to be sleeping on a bed of IPO cash in six months?
Satyavolu admits, “The personal riches concept — that has definitely changed. It has been a shock for a lot of folks, especially for those who entered the job market during boom times.”
But life goes on, and Yodlee has to get profitable. Satyavolu admits, “there’s a stigma” associated with being a dot-com. Customers may well be hesitant to do business with a private Internet company.
But Satyavolu argues that financial organizations see Yodlee as a relative giant compared to other dot-com survivors trying to offer similar services. Yodlee acquired its largest competitor — VerticalOne — in December 2000.
Regardless, the proof will be in survival and profits. Many dot-coms flamed out. Others have hung on and withered on the vine. Some will probably make it.
