You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well. Expensive as the payment apps it works with businesses and individuals to make it easier to manage expenses bills. It reported earnings yesterday, revenue coming in at thirty seven point four million dollars. It's an increase of seventy two point six percent from the same time last year. The net loss
was six point three million dollars. That was compared to six point nine million for the same period last year. The company those saying this was due to an ip O related bonus expense of more than twenty six million dollars that impacted a net loss and adjusted ebit. Joining us now is David Barrett, the founder and CEO of Expensivefy. He joins us on the phone from San Francisco. David,
how are you doing great? Thanks? Hey, So, I want to talk a little bit about what the journey to becoming a public company has been like for you and also what it's been like just over the last month. Is you've watched your company shares look move a lot higher and also move a lot lower. We should say that shares are higher to the tune of about thirty percent since the company I p O though about off of highs reached in late November. So actually, I have
no idea. I didn't look at the share price since I left the studio. Really wait, wait, hold on the first thing we did. You didn't check the share price. You even checked the share price since when? Since we left the studio and I p O day Uh wow the uh. We set up a rule internally saying it's like, look, it's a spoiler, like we're here for the long haul. We're not here to make just results like next you know, tomorrow,
next quarter wherever it is. Everyone in the company has focused on very long term results and so no, I only pay attention to the value recruiting over the very long term. That's so interesting because I talked to someone like Michael Dell, who has been you know, in public markets for for decades um and he writes in his recent book that it's like, you know, compared to kind of a report card. Uh and and talked a lot about the anxiety that it brings when you know investors
don't believe in you. Yeah, I mean, i'd say, but investors aren't my customer. I would say, like, you buying my shares doesn't actually make the company any more money. Every one's focus needs to be on how do we build product, how do we get that product in the hands of customers, and how do we generate very long term cash flow. Everything else is just an instruction. I think that's a really refreshing perspective. I mean, we spend so much time talking about the market here, but like
you said, investors aren't necessarily your your customers. But I do want to talk a little bit more about the I p O. Because you founded expensivefy in two thousand eight, you didn't go public until Uh why was Why was now the right time? Well, it just really came down to we wanted to provide liquidity to our early shareholders. I mean, like, we're a profitable company. We didn't need any money. We have all the resources we need to
keep growing. But as you have investors in with like a you know, ten year LP requirements and they're like eleven years in, at some point they're like, look, it's not my money, need to give it back. And so we actually did leveraged buyouts of early investors. We took on debt because Republic are profitable company and bought out early vcs. But that only works for so long. At some point we're like, look, there's no future where we can keep buying out everyone through LEVERAGETEP, like, we just
have to go public eventually. So once it was no longer, uh and if but a when that, they came down to why not today, Like it's better to be growing in a public company that growing as a private company. If you're just growing the same all the same, I'd rather have the look good or than not. So we just decided, look, there's really no reason to wait, let's just do it right now. I would imagine that over the last thirteen years you've gotten some serious offers to
be acquired that could have been a different path. Yeah, but that's not very fun. And listen, what I would do is to start all over and couldn't entirely new company, Like that's that sounds like a huge fan the ass would much rather just like I worked so hard to build this company, to hire this team. I don't want to start over and like have thirteen more years of effort to get back to where I am right now,
we're just barely getting started here. So does it feel any different being a public company than you were private company for more than a dozen years. It feels great, I would say. I think that the big challenge for our company has always hasn't the courage to believe in ourselves,
like overcoming this idea, the imposters, you know, dilemma. And I think like, now we're a legit, multi million dollar public company and you know, with employees and offices all over the world, like at some point we have to accept maybe we do new a thing or two. And I think that the confidence has given employees to just really believe in ourselves and believe in our product vision has been really helpful. And so we're coming back with you. We have just about thirty seconds though, but this was
your first earnings report as a public company. It seems like what got a lot of headlines was the launch of your your Free Plan. Yeah, and so it's basically when we started a card first, we were targeting just cross shilling to existing customers. The new free plan is targeting entirely new class of customers. They have very very simplified requirements. And then so yes, it's a opening up the market even further. Hey, David, we're gonna come back with you, So sit tight. We're gonna do some news
and we're back in just a few minutes. We're talking to David Barrett, the founder and CEO of Expensive I. He's joining us on the phone from San Francisco, Katie. When we come back, we're gonna have a good bit of time with him. We gotta talk blockchain. Oh my gosh, I need to talk about the blockchain. We only did one block on it. Yeah, I know so far, so we have an extra block to do later in just
a few minutes. Once again, David Barrett, the founder and CEO of Expensive I, joining us on the phone from San Francisco. Still with us is David Barrett. He is the founder and chief executive officer of Expensive Fied. He joins us on the phone from San Francisco. And David, I was looking at your bio and there's a line in there that caught my eye that you created expensive fies blockchain powered database a year before Satoshi's white paper on bitcoin. There's so many people who can say that.
Tell me, why were you looking at the blockchain all the way back in two thousand seven, two eight, Yeah, well it wasn't called that then. That name was invented later, I guess. But it's basically I was starting off this company.
I needed to build a database that could replicate an incredibly high volume and security, and I just I was an individual engineer with you know, my background been I've been a programmer since I was six, like you know, distributed systems from my thing for a very long time, and had a problem I need to solve. None of the databases at the time offered what I needed. I couldn't afford oracles because I was just a random dude. Because I'm like, it's good, I can just build us myself.
So explain what it means to people who might not be familiar that it's blockchain powered. Well, basically, blockchain is a replication technology, and what that means is if it allows you to have multiple copies of the same data in multiple locations and cryptographically guaranteed that they're exactly the same. And so blocking under the hood is really just a method of ensuring data integrity across multiple location. Now there's a ton of two different kinds of blockchains. There's the
public blockchains like Bitcoin and things like this. We use a private blockchain, meaning it operates only on our own servers, but we get all the same cryptographic guarantees that the replication that's happening and incredibly hyperflorma. So so somebody could say, well, how is that necessarily different from the cloud? Um, well, I would say the difference is so we buy our own hardware. Like there's this weird myth that somehow Amazon
is cheap and fast and efficient. None of that is true, Like, we buy a hardware that you are so much more powerful than anything you can get in the cloud, and it's literally like a tense of the cost um. And so I would say, no, we we operate our own hardware. Uh, and we use blockchain to replicate the databases between our own servers. When did you start using the term blockchain
in your press materials? Uh? We didn't even really think about blockchain for a very long time until I think we're just like like, wow, you know, we should do something with with bitcoin because people seem nuts for this thing, and we're like, well, wait a second, we didn't. Didn't we invent bitcoin? Blockchain? Uh? If I if I were that, I would not be talking to you today. No offense,
No offense, taken, don't worry. Okay, yeah, but no, no, I think that for us, we view blockchain is as a important solution to that particular problem, which was back end replication of very sensitive and important data at high volume. And so it's it's cool that. I mean, it feels like blockchain is such a buzzword that's thrown around, but
it seems like expensive. I Again, you could argue you coined it, but I'm curious, do you think that when you look across the competitive landscape, do you see your competitors also sort of realizing the benefit that this type of technology holds. Not really? And I would say, like fundamentally, what makes expensive by different than everyone else, isn't I guess We've got the best corporate card, our best expense reports, all that kind of stuff, But most importantly, we have
a completely different business model than everyone else. Everyone else basically has a very siloed uh sales model where you sell a customer top down, and that customer is an island. It only talks within itself, and so everyone has a very simple database because you only need a database as big as your biggest customer, and your biggest customer has you know, several thousands of employees like that fits in a small data base. It's actually very easy. We have
a completely different design. We have a single gigantic database that is replicated in multiple locations that stores all of our customers, which means our design is much more like a Facebook or linked in that it would be like a salesforce to concur because any two users and the Insensibi platform can talk to each other just like a social network, and so we're built to capture essentially all
of the billions of financial conversations. They happen not just inside of companies, but between companies and between employees in their um in their personal lives. And so we're bringing all these financial conversations onto a single global platform. And that's a completely different technology stack than anything else out there. So our technology is not just for you know, kind
of just to be fun or neat. It's there to support this radically different business model because we aim to link a billion people through their financial conversations, just like Instagram links billion people by talking about photography. How do you get there? How are you able to get to that number? Well, that's a great question, because you can't get there through a traditional sales model like use this, aren't enough sales people to call a billion people and saying, Hi,
have you considered expensive by Uh? The only way you can get to a billion user platform is through viral and word of mouth because like you didn't do you know, talk to a salesperson to decide to adopt Facebook. You just adopted because all your friends did. They told you that's how people learn about expensive lies. Yeah, but you need the company you work for to adopt it, right, Yeah, but it starts at the individual employee. Most companies of
our competition has to convince the CFO. We don't even try. We say, hey, any individual employee the Hasteler expension boards can down to the after free sign up their company and give it a shot. Again it's free, and then we just onboard the company before the boss even knows. So we call it our bottom up adoption model. Every employee can pull us into the company, which is different than our competition who can only talk to the top down. And just for context, you guys have got quite a
way to go to get to a billion users. You are saying that more than ten million people are using expensive fies free features right now. Indeed, more grab No, you go ahead, I can say more companies. He was expensive fied than any of the platform and so I think there's a reason for that, and we did it basically through this viral word of mouth model. And so that's I think the key to our historical growth and
absolutely keep to our future growth. And even I do want to get your thoughts on the pandemic because expensive fy you founded it thirteen years ago. The past almost two years have been in a pandemic when it feels like everything has I know, as if we needed a reminder, but I am curious you know how that has, you know, affected, expensifies business, how you're thinking about the path forward, especially as we start to see cases unfortunately rise again across
the country. Yeah. I think that was certainly very daunting when it happens, because we assumed we had a lot of exposure to business travel or of a certain kind. And I think it certainly, you know, it took a ding. I mean, it wasn't. Pandemic is not the banner of conditions for like, you know, fantastic year. But I think what we found is a business travel is different than people realize. We typically could think of like George Clooney
up in the air, like you know, coastal travel. Most business travel is actually someone driving across town, like driving to Toledo, buying some materials at the home depot and then doing a job like that's business travel for like a huge fraction of people. And so I think that the there's a lot of focus on what the virus does. But the virus isn't our customer. People are our customers, and people actually their behavior doesn't move as quickly as
the virus itself. Even like omicron, it hasn't changed really what people do. People are still traveling, people are still going into the office, People are doing a lot of things, like even in San Francisco here, um they may just major masked mandate in California except for San Francisco, where there's no change. Well, look, you know, we've had a big change in New York City in recent days. We hope that it doesn't end up happening in San Francisco certainly.
David Barrett, thank you so much for joining us. You've got to come back. We had a great time chatting with you. That's David Barrett, the founder and CEO of Expensify. Just went public last month. It's been thirteen years in the making. He joined us on the phone from San Francisco,