
nCino S-1 - nsx147
https://www.sec.gov/Archives/edgar/data/1566895/000119312520174870/d828449ds1.htm
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anonu
A $billion+ fintech unicorn nobody has ever heard of. This just reminds me
that opportunities abound, especially to focus on particular workflows that
are sometimes buried in the b2b world...

~~~
jacobwilliamroy
Not every tech company needs to be some obnoxious, loud weirdo pretending to
be the second coming of Jesus Christ. Some people just want to make money.

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kovek
> nCino is a leading global provider of cloud-based software for financial
> institutions. We empower banks and credit unions with the technology they
> need to meet ever-changing client expectations and regulatory requirements,
> gain increased visibility into their operations and performance, replace
> legacy systems, and operate digitally and more competitively. Our solution,
> the nCino Bank Operating System, digitizes, automates and streamlines
> inefficient and complex processes and workflow, ...

~~~
wayoutthere
It's built on Salesforce. They serve mostly mid-size regional banks. It's
honestly super cheap for what it is -- its no wonder they're gaining as much
traction as they are.

~~~
Mandatum
I'd never consider this until I could self-host. Way too much regulatory
"scaries" when dealing with money.

Remember that admin permission clearing command accidentally committed in
Production last year that killed hundreds of SFDC orgs last year?

What I'd do to listen to that bridge call..

~~~
raghava
> Remember that admin permission clearing command accidentally committed in
> Production last year that killed hundreds of SFDC orgs last year?

Oh! Can you provide more pointers, please? A quick search doesn't seem to be
showing anything worth useful on this item.

~~~
Mandatum
> [https://hub.packtpub.com/salesforce-suffers-major-outage-
> pro...](https://hub.packtpub.com/salesforce-suffers-major-outage-providing-
> data-access-irrespective-of-the-permission-settings/)

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poorman
Having been part of the Wilmington, NC startup ecosystem for some time at
Untappd [1], I'm fairly certain that nCino is a spinoff of Live Oak Bank
[2][3]. Also, another spinoff from Live Oak was Apiture [3][4].

[1]
[http://www.wilmingtonbiz.com/technology/2020/06/19/whats_nex...](http://www.wilmingtonbiz.com/technology/2020/06/19/whats_next_for_next_glass/20522)

[2] [https://www.forbes.com/sites/amyfeldman/2016/01/10/fast-
grow...](https://www.forbes.com/sites/amyfeldman/2016/01/10/fast-growing-
ncino-sells-banks-software-to-simplify-the-loan-process-and-a-whole-lot-
else/#2d2b6af34d77)

[3]
[http://www.wilmingtonbiz.com/banking_and_finance/2020/06/22/...](http://www.wilmingtonbiz.com/banking_and_finance/2020/06/22/wilmington-
based_ncino_files_proposed_ipo/20538)

[4] [https://www.starnewsonline.com/news/20180502/tech-company-
ap...](https://www.starnewsonline.com/news/20180502/tech-company-apiture-
opens-wilmington-headquarters)

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AlphaWeaver
nCino is headquartered in my hometown, Wilmington, North Carolina. Even here,
they keep a very low profile.

Within the local entrepreneurship community, they're recognized as being very
successful, but most people who live here don't even know who they are.

They've done a nice job, and they deserve this. Congrats team!

~~~
tsumnia
As a former resident of Wilmington, this is incredibly pleasing to hear. The
community has been striving hard for the past decades to move away from the
concept of "just another beach town". I used to use the phrase "You get to
live at the beach, now earn it" to motivate my students.

While not as prominent, Wilmington, NC is also home to Castle Branch [1],
which initially started as small background checking company; GigSalad [2],
which allows you to book various performers; and Lapetus Solutions [3], which
uses facial recognition for health insurance purposes.

Also, hi Sam, don't internet stalk me.

[1] [https://discover.castlebranch.com/](https://discover.castlebranch.com/)

[2] [https://www.gigsalad.com/](https://www.gigsalad.com/)

[3] [https://www.lapetussolutions.com/](https://www.lapetussolutions.com/)

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cprayingmantis
Hey this is where I’ve worked for the last 4 years. Hands down the best
company I’ve ever worked for.

~~~
btown
I can imagine that intense financial client needs (not to mention working with
the confines of SFDC) could easily give this type of company a much less
positive culture. Are there specific things leadership have done culture-wise
that have made it such a positive place?

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KKKKkkkk1
There's some discussion in this thread about the less-sexy corners of the
market that are getting eaten by software. What I'm wondering about is whether
these corners yield the incredible levels of profitability that we've seen in
the past from the tech industry. In other words, with something like Facebook,
once the basic product was operational, every additional million of users came
with negligible acquisition costs. With something like SAP, every new customer
requires a gargantuan integration effort.

So what I'm curious about is this: It might be true that there is a long tail
of industries that remains to be eaten by software, but do we expect the
software in those industries to be as scalable as it has been in "tech"?

~~~
deepGem
I doubt it. If you look at nCino S1, their professional services revenues are
not growing as much as their subscription revenues.

PS revenues: 2018 20,094 2019 27,076 ~35% 2020 34,915 ~27%

While subscription revenues almost double every year since 2018. This is also
highlighted in their risk factors.

What this indicates is that the deployment of such software still needs
significant human touch.

Based on the services revenues and the sales expenses, I am hazarding a guess
that nCino is a high touch businesses requiring significant sales
professionals.

Which is why, it is key to understand customer retention in such businesses.
From what I see, they have a 147% subscription revenue retention rate. That
might be a proxy to customer retention but I'll try to get their actual
customer retention numbers to be on the safer side.

Overall, yes this is no Facebook or Google. The risk section of S1 is very
good and the founders are pretty candid about what the investors are up for.

~~~
otoburb
Two comments about the PS revenue numbers:

1) The growing divergence between the subscription and PS revenues strongly
imply that a "land & expand" model is prevelant (2018 1.9x, 2019 2.3x, 2020
2.95x) where they are able to push subscriptions up 21-28% post-deployment.

2) PS margins were 9%-10% in 2018 and 2019, and then dropped to 5.4% in 2020.
Good to know that management continues to view PS as a sales enabler that pays
for itself (i.e. break even or at least single-digit margin) executing their
primary mission to drive high-margin subscriptions.

~~~
deepGem
Valid points. Land and expand is a great moat to have. Couple of other
interesting points

Their contracts are non-cancellable 3 to 5 year contracts. So retention is
almost guaranteed and in banks, beyond 5 years no one bothers to change the
status quo. So this is a significant factor when it comes to predicting future
revenue potential and profit potential.

On the costs front, hey have to pay a part of the subscription revenue to
Salesforce. However, this cost grows linearly in proportion to revenue. The
ratio has remained same throughout 3:1 (almost)

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askjdlkasdjsd
We're living in an age where twitter rants on Apple draw more attention than
the entire lifespan of a quite fintech unicorn.

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lquist
The Co-founder/CEO holds only 1.6% of the common shares!?

~~~
staysaasy
It happens. Enterprise SaaS takes a lot of capital, there were probably ups
and downs, and between all of that you can take a ton of dilution. Just the
cost of the enterprise game with its highly predictable revenue streams.

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RyanShook
Sorry if this is a dumb question but why is nCino built on top of Salesforce?
Would they not be better off as a standalone system?

~~~
rp00
Nah. Salesforce is the Trojan horse into Enterprise. It’s a very symbiotic
relationship.

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sandGorgon
They are super loss making, which is unusual for a tech provider (and that
too, running on Salesforce).

Is this because of the Salesforce tax ?

~~~
james412
The reference to dependence on system integrators tells you all you need to
know.. they will never have some 5-click signup process. Probably each new
customer presently involves a fuckton of multi-vendor custom engineering over
stupid timescales.

I've never heard of financial software that didn't suffer from this, so it
will be interesting to see if they manage to eventually streamline it.

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deepGem
wow. This makes hanging out on HN worth every minute. I will certainly sink
some money into this company once they IPO. Their retention rate is astounding
and in a B2B or enterprise sales business this is one of the governing
predictors of growth.

It's very rare to find humble low profile founders who just want to build
businesses that make money. Ticks off most of my Warren Buffett filters.

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rexreed
Can someone explain to me why this is important? Not trolling, I'm serious.

~~~
jonahbenton
Banks were one of the first businesses to digitize. Big banks in the 1950s.
Small banks in the 1980s. Many remain stuck on the technology of their
specific era of digitization.

nCino is one of a relatively small number of players turning the complex
process of operating a certain kind of bank- of which there are thousands in
the US- into turning the crank on a SAAS-delivered machine.

With a new platform come capabilities for new products and services around
money- not payments, as has been the hotness for quite some time, but deposits
and lines of credit, for individuals and small to mid sized businesses.

And for nCino, having thousands of customers each of which has thousands to
hundreds of thousands of customers, each of which has deposit and line of
credit accounts, each of which has lots of transactions, and through which
their survival as a business is managed- that's a really nice data set to do
some really interesting analytics on.

So, yeah, important.

~~~
fragmede
If you've heard the need for Cobol programmers, often times it's for banks.
When they digitized circa 1960 with the original computers, IBM mainframes,
they operated using batch computing, which is why, even now, bank websites
sometimes have hours of operation. Moving away from mainframes and modernizing
that stack is, quite apparently, a lucrative business - if you don't mind
working with bankers. There is an intentionally onerous amount of regulation
in that industry that things operate under, most of it not relating to tech,
but the tech does need to work under it.

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staysaasy
As an enterprise SaaS person, you really love to see it. I spend a good amount
of time in the enterprise b2b world, and I had literally never heard of them.
Boring businesses kick ass.

My only disappointment: they have a fancy name. Always love it when under-the-
radar enterprise companies have ultra boring names, there was a missed
opportunity here to call themselves "eBank Technologies" or "Transfer
Networks" or something equally mundane.

~~~
SkyMarshal
I'm fairly convinced that names don't matter. In most cases, companies make
the name with quality, consistent execution and success (or imploding failure,
as with WeWork). Names don't make the company.

~~~
staysaasy
Yeah, that's why I love it when companies are named, like, "Computer Business
Partners."

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sharker8
Sounds like pokemon

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Apofis
How common are their losses for a fintech IPO?

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yingw787
This is the first time I've heard of nCino. I haven't seen it mentioned on HN
before. Yet it's probably more successful than many of our own ventures might
be. A good reminder to stay humble and to always keep business fundamentals in
mind.

~~~
einarvollset
Relevant: [https://tinyseed.com/latest/measuring-the-depth-of-the-
softw...](https://tinyseed.com/latest/measuring-the-depth-of-the-software-
industry-iceberg)

(Disclosure: yes I wrote it)

~~~
yingw787
I <3 MicroConf / TinySeed / you guys!

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davidw
Oh, look, yet another company founded by an immigrant.

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kovek
Is there some idea you'd like to share?

~~~
davidw
Immigrants are a net positive for the economy!

~~~
_nhynes
Indeed. A.S. G^2P was meant to chide the current administration for the
(clearly very political) travel bans [0], temporary (??) suspension of visas
(incl. H1-B) [1], and general racist isolationism.

[0]: [https://www.whitehouse.gov/presidential-
actions/proclamation...](https://www.whitehouse.gov/presidential-
actions/proclamation-suspension-entry-immigrants-nonimmigrants-persons-pose-
risk-transmitting-2019-novel-coronavirus/)

[1]: [https://www.npr.org/2020/06/20/881245867/trump-expected-
to-s...](https://www.npr.org/2020/06/20/881245867/trump-expected-to-
suspend-h-1b-other-visas-until-end-of-year)

~~~
ThomPete
For what it's worth H1Bs were being misused by indian tech companies who got
the majority of them [1] because the salary requirements haden't been updated
for decades [2]

That meant the ability to undercut american workers.

I don't think there is anything racist about that.

[1] [https://www.economist.com/united-
states/2017/02/09/h-1b-visa...](https://www.economist.com/united-
states/2017/02/09/h-1b-visas-do-mainly-go-to-indian-outsourcing-firms)

[2] [https://alj.artrepreneur.com/h1b-visa-
crackdown/#:~:text=Cur...](https://alj.artrepreneur.com/h1b-visa-
crackdown/#:~:text=Currently%2C%20to%20qualify%20for%20an,a%20minimum%20of%20%24130%2C000%20annually).

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artur_makly
...

~~~
dang
Please don't do this here.

