Editor’s note: Over the next two weeks, Yahoo Finance Canada will be highlighting the best of Canadian innovation in a series called The Future Is Now. We’ll be bringing into the spotlight some of the companies and individuals that aren’t just pushing the limits, they’re creating new ones, for themselves and investors alike. We’ll be shining the spotlight on homegrown talent in the fields of satellite technology, autonomous vehicles, wearable tech and more. Check out our hub page for even more coverage and let us know in the comments: Which companies do you think represent the best of Canada looking toward the future?
It’s probably fair to say you would be hard-pressed to find someone who enjoys keeping track of receipts. Hunting them down and adding them up is a time consuming activity that usually ends in frustration. Especially if you’re trying to run a business. Well there’s an app for that created by a Canadian company. It’s called Sensibill and depending on where you bank, it lets you store receipts within a mobile banking app. Here’s how it works.
Yahoo Finance Canada spoke with Sensibill’s CEO & Co-Founder Corey Gross.
What were you doing before starting the company?
I’m a lawyer by trade, but prior to starting Sensibill, I founded a company called Smartslips–-another digital receipt company. The business model was quite different from Sensibill’s. With Smartslips, I worked directly with retailers like Indigo, Sephora, and Pottery Barn, to issue e-receipts from their point-of-sale providers. Retailers were slower to adopt e-receipts than I had hoped, so I launched Sensibill in 2013 to put consumers in control of digitizing their receipts using their smartphone camera.
What gave you the idea?
I was fed up with paper receipts. Having a cluttered wallet just in case I needed a receipt for a return or warranty, rifling through drawers for expense reports and tax returns––it was a pain. I decided I had to do something about it when I tried returning an expensive item at Best Buy without a receipt. I first founded Smartslips to solve this problem, but after realizing that relying on retailers to issue e-receipts would take too long, I founded Sensibill with Jamie Alexander, the company’s now-CTO. I met Jamie at the DMZ, an accelerator program in Toronto, and we were opportunistically approached by a major Canadian bank that was interested in a receipt solution for their new digital wallet. That’s when we decided to go in the fintech direction.
What makes your software different than your competitors?
We differentiate in three main ways. Number one, we go beyond static receipt capture and storage. We pioneered machine learning techniques to extract and structure item-level data from receipts, and to this day, our technology is the most accurate and scalable solution on the market. Competing solutions either use rules-based templates, which are difficult to scale across geographies and languages, or employ manual methods such as a human intervention, which is slow and presents a host of privacy concerns.
Number two, we have simple workflows, accessible in multiple geographies, and easy-to-use for the segment we service, namely the microbusinesses and self-employed professionals.
Number three, we’ve packaged all of this up in a bank-tough solution that allow banks to get to market quickly. It’s actually the only receipt management solution built specifically for banks. Our team of enterprise delivery experts, our high security standards, and our easy integration make us a quick win–something that not many startups have been able to achieve in the financial services industry.
How much money have you raised so far and who were the investors?
We’ve raised $18.9 million CAD to date, including a $17.3 million (USD $13 million) Series A round that was one of the biggest to come out of Canada in 2017. The Series A funding was led by Operative Capital, Information Venture Partners, and OpenText Enterprise Apps Fund, among others.
What are your thoughts on Canada’s fintech in terms of investment potential?
Canada has a lot of potential to attract investment. We have a centralized and trustworthy banking system, and a welcome business environment, but too often, most companies pursue funding and expansion elsewhere, where innovation is incentivized more comprehensively. We have a lot of potential, but we’re not where we need to be.
Is Canada a leader or laggard when it comes to Fintech?
Canada is a laggard. I think our complex regulatory structure and risk-averse culture prevents fintech adoption from reaching the mark we’ve seen in other countries, like the United Kingdom. Also, high compliance costs and a lack of access to startup capital means higher barriers to entry. Then there’s the issue of a short supply of tech jobs in Canada. We lose top tech talent to the US, where they have more access to experienced tech leaders and more resources, so it’s hard for us to lead in any tech industry.
London is a real example of fintech leadership, and I can personally attest to their willingness to collaborate and their openness to new technology. With regulatory frameworks like Open Banking and PSD2 encouraging an even playing field, hundreds of innovative new competitors have entered the market across the entire fintech spectrum. Incumbents are also incentivized to partner with fintechs in the UK, so the financial services ecosystem is rapidly evolving there.
Which financial institutions are you partnered with now and into the future?
We’ve partnered with the Royal Bank of Scotland Group (this includes NatWest), Mastercard, and Scotiabank, to name a few. We also work with a channel partner in the US, FIS, to distribute our solution to community and regional banks. We have several other major partners yet-to-be announced. Stay tuned.
Can you explain how your company uses AI?
In combination with OCR, we use machine learning techniques to normalize and structure receipt data. Let me explain what this means.
No two receipts are the same. They come in various shapes, lengths and formats. In other words, they’re unstructured. This unstructured data isn’t of much use. Machine learning, and deep learning specifically, allows us to uncover patterns in a set of data. What we’re trying to do is teach machines to read receipts the same way humans do: identify items, the categories items belong to, the merchant, the subtotal, the total and so on.
This sounds simple, but it’s not. Text means something to humans, but not to the untrained machine. We had to teach the machine to essentially understand and decode symbols. Teach it characters, words, and phrases. This means that the next time an end-user is filing their taxes and need to expense their home office supplies, they can just search “laptop” and their Apple receipt will populate. Our technology can identify 150+ unique data fields, which means end users can search for a receipt based on any data field found on said receipt.
Due to the very nature of AI, with each day, our technology continues to learn autonomously, being able to understand receipts from new and unfamiliar merchants at an increased speed and accuracy. Ultimately, we’re leveraging AI to ensure our solution can scale globally, and “understand” receipts from anywhere in the world.
What types of users benefit from your product?
Our solution is designed specifically to serve micro-businesses––small businesses with less than 10 employees––and self-employed professionals. These folks are short on time and burdened by operational inefficiencies that prevent their growth. Instead of running their business, they spend up to 80 hours a year on manual bookkeeping and reconciliation, and even forfeit tax claims just to avoid dealing with receipts. They can’t afford to outsource the work, and they don’t need sophisticated accounting software either, so they’re more or less neglected from a solution point of view. We wanted to change that. We built a simple solution that helped them manage these tasks in an affordable way. By offering it through mobile banking apps, we marry banking data with accounting data, which allows these folks to have more visibility and insight into their spend, in a holistic way. This way, they can make more informed business decisions, on-the-go.
What have been your biggest challenges so far and what obstacles do you expect going forward?
One of the biggest challenges is finding ways to shrink our sales cycles. Given the complexity of banks as organizations, it can take a long time for them to assess vendors and products, and to ensure that we’re compliant with their regulatory, security, and risk mitigation standards. Of course, it’s worth it in the end, and we’ve done a better job than most at delivering quickly and strictly adhering to their requirements.
Another challenge is not being able to get direct end user feedback as regularly as we’d like. Since we distribute our solution through banks, we’re one relationship removed from the end user, and don’t have the same level of communication as we would have if we were a consumer-facing product. This makes it difficult to receive, and use, customer feedback for product improvements.
Moving forward, our biggest challenge will be making sure we can deliver as good of a solution globally, as we do locally. Localization is a big challenge from a product point of view. And I’m not just talking about localizing our receipt extraction and understanding foreign languages, but it’s also about localizing the use cases.
Related to this, scaling in a way that ensures we can deliver with the same level of excellence, and maintain close relationships with customers all over the world the way that we do today, is going to be tough. It means growing our team significantly, and even opening more offices worldwide, which has its own unique, operational challenges.