Cybersecurity

Tamas Kadar is hot property.

At 28 he’s the co-founder of Anglo-Hungarian startup SEON, which became the highest invested Hungarian founded company in history with the largest ever Series B investment for a fraud prevention business when it secured $94m (£72m) in April.

A serial entrepreneur he’s also a member of the Forbes Technology Council, an invitation-only organisation that recognises top executives and entrepreneurs in the technology sector.

His motto is ‘whatever works’ but just don’t expect him to start splashing the cash judging by the straight bat he played to the following question.

“Have you got a nice Lamborghini or a penthouse overlooking Budapest?” I asked in relation to the latest fundraise.

“I don’t think I have any of those things and I don’t think I will ever because I’m conscious of cost quality,” was the very sensible reply.

“For me personally, I think about these numbers as a tool for us to grow further. What we will do of course is reinvest in the business side. We’re looking to expand into the anti-laundering space.

“We were a bootstrap business for a long time so we had to work with limited resources. We are all aware of the best ROIs.”

Kadar is clearly not the sort of guy to get carried away and make outlandish claims, which is one of the reasons why investors have been queuing up for a piece of SEON.

So who is Tamas Kadar and why is SEON attracting so much interest?

£72m to power fraud prevention startup SEON

The son of an engineer and an accountant, he was only 16 when he started to trade with smartphones that he ordered from China and quickly translated into his native Hungarian.

“I was always interested in technology,” he recalls. “I could save enough money to buy my own car when I was 17 years old.

“I didn’t study English so I learned English all by myself. I was studying German in school.

Crypto

“Then I got interested in crypto about 10 years ago. I was fascinated by online payments and how people can receive and send money online.

“I shifted to crypto and exchanging fiat (currency) to crypto in my university years.

He launched his first business, a cryptocurrency exchange, whilst studying Deep Info Comms at  Corvinus University in Budapest and this eventually sparked the idea for SEON.

SEON is a combination of the two words ‘security’ and ‘on’ and as the world moved increasingly online Kadar recognised the potential of a fraud detection business.

“What we try to do with SEON is create a digital footprint of someone just based on single data points, such as the email address or phone number, IP and device,” he explains. “We try to figure out if people really are who they say they are.”

For example if a person tries to make a transaction SEON’s AI-enabled software can check whether the email address is linked to a valid social media account. If it’s not that would be a red flag.  The whole process takes less than a second.

Historically, effective fraud tools were only readily accessible to large enterprises with the budget and staff to handle complex implementations. SEON says it democratises access to fraud-fighting technology, making the internet a safer place for business.

He incorporated the business in 2017 with co-founder Bence Jendruszak and says their focus was on creating a product before going out to investors.

“If you’re coming from a region like Eastern Europe, I think it’s super important to be product-first, customer-centric and it is important to find the right talent to achieve this,” he says.

“When you have a product which is close to product market fit, it’s easier to actually expand internationally in terms of opening up new offices and hiring to grow revenue.

“We were always a product growth company. We have built our products based on the customer feedback. Companies that come from region are always more successful if they’re product-first and not marketing or sales first.”

Investment

SEON’s initial pre-seed investment was for 50,000 euros from an Austrian VC and was followed by 500,000 euros from an angel investor.

The Series A came at the end of 2020 and was for $10m with the Series B being announced in April 2022 for $94m.

The $94m Series B was led by Silicon Valley-based IVP, the round also includes existing investors Creandum and PortfoLion, as well as angel investors.

SEON actually turned down offers from investors with higher valuations.

Kadar explains: “It would be great to be a unicorn but that’s not something we work towards. We’ve seen last year on the VC side and startup side, really high valuations, sometimes there are actually non profitable businesses with really low gross margins.

“In the last couple of months the whole market started to take a break and be more conscious about looking at profitable businesses, who have mid and long-term goals.

“I think if a company is being overvalued it sets high expectations.

‘I don’t aspire to be a unicorn’

“My aspiration is not to be a unicorn, my aspiration is to build a healthy business, a business that is self-sufficient. My aspiration is honestly to give back to the community and to help more founders to be successful, at least to the same extent as we have become.”

In the next 12 months SEON plans to increase its headcount by 150 people in total, doubling its teams in London and Jakarta, adding another 80 to 90 people in its founding location Budapest, and doubling its team in the US.

The company tripled its annual recurring revenue in both 2020 and 2021 and customers include Revolut, NuBank, Afterpay, Patreon and Sorare.

As for the future Kadar is focused on growth.

“I would like to hire even more talented team-mates as we’re planning to double up the team size,” he says.

“What really motivates me is working together with smart people and seeing how they can contribute to our big mission. That’s what gives me satisfaction.

“I think the traction we have had over the last two years has really helped us to get to this point.

US growth

“The biggest challenge is US expansion for us because we’re a European business.

“We have small office in Austin, Texas, with about six people now and we also have some remote teammates in the US but my co-founder Bence is relocating to the US to help our growth and expansion over in the States.”

In his spare time Kadar likes to listen to podcasts and read books but hopes SEON’s success can help raise Hungary’s profile.

“The country is small with 9.8m people living here,” he says.  “We have some great companies who are eager to work with Western businesses who can help them to grow and add value.  I hope we can see some more unicorns and companies that are well respected.”