Sahill Poddar’s journey has been one of determination, intellectual curiosity, and a passion for making an impact. From tinkering with his first computer to delving into the world of particle physics, Sahill’s experiences have shaped him into the entrepreneur he is today.

His startup, Parafin, attracted funding from top-tier investors like GIC, Thrive Capital, Atalaya Capital Management, and Ribbit Capital.

In this episode, you will learn:

• Sahill Poddar’s upbringing in Kolkata instilled a love for math, physics, and computer science, setting the stage for his future endeavors.
• An early encounter with a high school teacher in Pune redirected Sahill towards physics, shaping his academic and career trajectory.
• Sahill’s transition from particle physics to data science was a natural progression, leveraging similar tools and methodologies.
• Joining Facebook provided Sahill with a platform to make a massive impact, thanks to its vast user base and wealth of data.
• The founding of Parafin stemmed from a keen observation of the fintech landscape, recognizing the need for a renaissance in small business financing.
• Parafin’s cultural tenets of intellectual honesty, efficiency, accountability, and empathy form the bedrock of the company’s operations and ethos.
• Sahill’s journey underscores the power of transparency, adaptability, and a relentless pursuit of truth in building a successful fintech venture.

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About Sahill Poddar:

Sahill is the co-founder and CEO at Parafin and the Data Scientist at Robinhood. Additionally, Sahill Poddar has had 2 past jobs including Lead Data Scientist at Meta.

Connect with Sahill Poddar:

• Linkedin
• Crunchbase
• Datanyze
• RocketReach

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today. We have a really incredible founder. You know we’re going to be talking you know quite a bit on building Hypergrowth companies. You know he’s experienced at Robin hood and that how that shaped up you know he’s thinking towards you know building rocket ships and. Definitely build 1 of its own and we’re going to be talking about many of the good stuff that they went through from you know the values to the rounds of financings that they did and what they were looking from investors on how they did it to um you know other good stuff like culture and things that you know really are really helpful when when you look at building scaling and. And rammp things up. So I guess without farther ado let’s welcome our guests today sail poar welcome to the show.

Sahill Poddar: Thank you Alejandro um, thanks for having me excited to be here. You.

Alejandro Cremades: So originally born in India so give us a walk through memory lane. How was life growing up.

Sahill Poddar: I grew up in. You know the third largest city of India a city called cocata um kokata is very busy, very noisy, very densely polluted. Lots of traffic. There’s a huge variance in the way people live their lives. Um, I went to public school there you know childhood was mostly spent starting math physics, computer science and playing cricket in every patch of land that my friends and I could find in the city. Um, and.

Sahill Poddar: Still remember you know the first time a computer arrived at home. It only had Microsoft dos on it. So my friends and I spent a lot of time just tinkering with that at an early age. Um, so that’s that’s how it was growing up in in cofather.

Alejandro Cremades: So then tell us about also moving to a different place. You know to putin when when you had to go to high school I mean how was you know the process of going to another location making new friends. You know I’m sure that that uncertainty you know shaped who you are today quite a bit.

Sahill Poddar: Um, it absolutely did you know moving at an early age certainly made me appreciate and and get comfortable around being an outsider which um, you know I continue to be for the for the remain of my life at least under this thus far. Um, in pune I met my high school teacher who convinced me to get into physics instead of math. So that’s certainly shaped. Um my ah you know thinking and and career journey. Um I made a lot of friends that could you to be friends till today some of my closest friends so it was it was a wonderful experience. Overall.

Alejandro Cremades: So then what about when you ended up landing and you find yourself in London you know, walk us through that because I mean obviously you went there to study at imperial and then imperial one of the most incredible universities. You know, kind of when it comes to Perhaps you know like the the life sciences you know type of um type of degrees. You know in this case, you know here there where you will studying. You got your bachelor’s and master’s degree in physics you know which has shaped you which has also shaped the way that you thought about building. You know your current company tool parafinn. So how was the experience at imperial and how do you lion the you land in imperial.

Sahill Poddar: Yeah, um, so like I mentioned you know my high school teacher had actually done his Ph D in Imperial so he really encouraged me to um to go there and study physics when I reached there very quickly I found myself? Um, um in a group of highly motivated. You know.

Sahill Poddar: Want to be physicists so it was a very intense place where there was a lot of rigor in in mathematics and physics and you know you really had to compete hard to to do well in in college. But that’s also where you know I got exposed to. All the different areas of physics. We went deep into certain areas and that led me to pick um you know particle physics in Nphd um, so it it was. It was a wonderful time. It was a very intense time but a a time when you kind of are um. Almost like tasting all the dishes in a in a buffet to know which one are you going to actually eat for your main course which is ah you know trying out a lot of different physics courses to know which 1 you want to dive deeper into.

Alejandro Cremades: So when you went to Germany and you did your ph d there. It sounds like it was good training on on becoming a data scientist. Why was that the case.

Sahill Poddar: So at the large hard hadron collider whereas where did my ph d um physicists generally use the similar type of tools that data scientists use today. There’s all a lot of emphasis on tools that enable. Machine learning modeling statistical modeling. Um, computational math in order to analyze data from the laard run collider to find signals for you know physics events such as the higgs boson so it’s a very natural transition. Um, once you have learned those tools to apply them anywhere and. As it happened so um, data science was taking off in tech as ah as a hot career and so it was a very natural transition to go from a ph d to data science.

Alejandro Cremades: So entering the world of startups. You know everything started with Meta Why Meta Facebook at the time. Okay.

Sahill Poddar: Yeah, um I think Facebook was you know I’ve always liked to work in areas that are sort of have large impact or a big you know Cern was a huge physics project Facebook had this huge surface area. It was covering a huge. Print on the world where it had billions of users using it and huge amounts of data. So for a data scientist. You know you do need a lot of data to do ah to to have interesting problems to solve and Facebook was one of the few companies especially in Europe that was hiring that had. Vast amounts of data where a person like me could could you know help out the business.

Alejandro Cremades: So I guess that probably opened up your your eyes you know because obviously Facebook you know Silicon Valley you know the american dream. You know all that stuff I’m sure that that came to mind and and again you know like eventually you know Robin Hood you know the idea comes knocking. And the idea of coming to the us I mean how was how did that incubate it for you. How did that happen.

Sahill Poddar: Yeah, so there’s an interesting story there. Um, you know by which of of being employed at at now Meta than Facebook I made a few different trips to the us and by some stroke of luck met a seed investor um at robinhood. Um, and.

Sahill Poddar: They introduced me to the company. The company was not really looking for data scientists at the time it was relatively small. It was maybe under 20 people or so but it took me about six to nine months to convince Robin Hood to hire me as a data scientist and that’s when I moved to the Us. So.

Alejandro Cremades: And how how did you connect with this city investor who was this city investor because obviously this city investor has done pretty well for for himself or herself. So how did you connect with this city investor of Robin hood.

Sahill Poddar: It was it. It was a common friend who who introduced us the fund um does not exist anymore. It’s It’s a fund called rocking but ventures which does not exist anymore.

Alejandro Cremades: Okay, got it all right? So now in this case, you know Robin hood so you land in Robin Hood you know it’s a company with just a ah few dozen you know employees at the time that you joined so how was that the robin hood at the time. What did that look like because obviously very different from the you know. Robin Hood of thousands of employees today. You know that has gone public and you know different different story at the time.

Sahill Poddar: Yeah Robin it was an incredible place I think the founders had ah you know a similar background on they were you know experts in math physics by which of having done masters ph d in those topics. Um, it had a very scientific approach to company building. Um, you know it had naturally a. Confused to have excellent product market fit. Um, it is also where I met my cofounders which is probably the the biggest gift that I got from Robin Hood um and it is also where I learned everything I know about the world of of financial technology.

Alejandro Cremades: Now in this case, you know like with Robin hood. You know there was a lot of basically machine learning. You know, engineering that you were doing I mean what were some of the projects that that you were doing there and then also how what what were some of those ingredients that you saw those patterns of. Shacha rocket ship. You know that that perhaps you learned that maybe one day you know you would like to apply you know to whatever you would do next.

Sahill Poddar: Yeah, um, data science you know at robinhood was initially working a lot on growth. Um, and so that was that was one area where I contributed a lot. We managed to grow the robinhood user base I think roughly by one hundred x at my time there and. We used all kinds of techniques we were using machine learning to you know, better use the ad networks such as Google and Facebook making measurements measuring churn um, preventing churn um, and and running experiments so it was it was a very high high intense. Experience. Ah, and the things that I learned there that you know that can you know stick with me. Um I think first the person foremost is the importance of product market fit and how ah you know one should not fool yourself into having one and you’re the easiest person to fool in the words of fineman. Um, the second thing was just driving a sense of urgency in everything that you do Um, yeah, and the third thing is is the importance of hiring and retaining good talent because at the end of the day. Ah, the company is an aggregation a company is an aggregation of of ah of all the people that work in it.

Alejandro Cremades: So then at what point does the ad of parafin you know, come knocking because you know obviously as was part of Robin Hood you know not only you were able to really understand you know and and get your mind shaped around building a really high hypergrowth. Super successful company. But then also. You met your cofounder so it sounds like it was pivotvotal for you Robin Hoodz at what point did start you know things started coming together and incubating you know so that you eventually you guys were like let’s go. We’re ready.

Sahill Poddar: Yeah, um, so I think it’s difficult to pinpoint a particular moment in time. Ah, where where the ideation happened but it was something certainly on the back of um, our minds and by r I mean my co-founders and I and my mind. Um, for a while um you know we would have a lot of informal chat about it. Um, what got us excited was what we were seeing. Ah you know happen in the consumer fintech world a sort of renaissance where you know consumers had a plethora of opportunities of. Installing and downloading apps and using them instantaneously providing them. You know state of the art financial technology tools a similar renaissance escaped the small business world. Um, naturally for very good reasons. You know there are companies like square and stripe that have laid the beddrop. Um. The s andb space by digitizing payments. But there’s so much more to be done and you know the biggest needs of the S Andb are still go unaddressed. Um, so we decided to kind of take our learnings what we knew about building financial technology how the us financial you know infrastructure space works and then apply it to create. Um. Value for small businesses. So.

Alejandro Cremades: So so then tell us about that moment where you guys finally are like okay you know this is happening. You know you give the notice and then you know what were the early days like of of the company.

Sahill Poddar: Um, yeah, the the early days were um, a little bit counterintuitive for us when we were living in the moment especially because we did not write a single line of coder for the first few months of of our. You know, daily jobs at Paraffin so to Speak. Um and that for 3 technical cofounders was a very difficult task. We were itching to to write something and to write some code and and and you know, Um, what we instead did was we spoke to a lot of customers did a lot of deb user research. Um. That then enabled us to um, you know double down on on the specific problem that we we chose to solve which is making it easier for small businesses to get access to capital.

Alejandro Cremades: So then so then in this case, you know like what what does it look like you know for the people that are listening to really get it. What ended up being the business model of Paraffin today. How do you guys make money.

Sahill Poddar: Yeah, so um, you know to take you through a very quick overview parain’s mission is to grow small businesses. We believe that eventually every small business will get aggregated by a platform that is either on-de demand marketplace like Amazon doordash et sea. A vertical saas like shopify or a pos like square or ship for payments. Um, simply because these platforms make it very simple for a business to get started up and running they solve a lot of operational challenges for them increasingly process payments for them in certain cases generate generate demand for them. So as a small business. It just makes a lot of sense. To flock to these platforms to run in your business as a result of this aggregation of um, small businesses by platforms a new window of opportunity to serve financial services via these platforms to the small businesses opens up with a lot of advantages which enable you know customization. Of of financial products small businesses. Um, you know that sell on platforms. The platforms know exactly how much transactions they’re making they’ll have an existing relationship with the small business and they’re highly incentivized to grow the small business. What paraffin does is it enables the platform to offer. Embedded business financing. Um, where ah s andb can get revenue based financing based on their sales. Um, the the small business pays. Um, you know a fee and that fee is split between um, our capital providers. Um our platforms and and paraffen.

Alejandro Cremades: And how do you guys go about getting the first customers here.

Sahill Poddar: And that’s essentially the business model.

Sahill Poddar: Um, so going back to you know when I mentioned about user research we did a lot of it. We spoke to some of the biggest platforms in the country. It just happened so that you know doordash at the same time was looking for a um. A partner to do this with um so we were in constant conversation with them. They kind of you know they disappeared for a few months because they were in the process of going public and then they reappeared and and we launched with them in q one 2021 and and that’s how we kind of. You know, got out first customers. Um another initial customer. Um, you know a payment processor in the autoshop space. A company called three 60 payments I just happened to walk into an autoshop and and speak to them as to what payment processor they use and if they would trust them to lend them money and and based on their responses. You know? Um. We really started to join the dots there. So those are kind of how we landed our first couple of customers.

Alejandro Cremades: And obviously for this, It’s a capital intensive. So how have you guys gone about this. How much capital have you guys raised to late.

Sahill Poddar: Um, um, we’ve raised $94000000 in equity over 3 rounds of financing a seed a series a and a series b yeah when we raised our seed round. Um, you know we.

Alejandro Cremades: And what was it journey like on raising all that money and and also from those investors that you did raise the money from.

Sahill Poddar: Um, did things that you know I would not advise um a founder do today which is we didn’t speak to very many different funds. We kind of just approached ribbt ribbet capital um, and it was primarily based on the relationship that they had with Robin hood and what we had heard about their reputation from there. Um. And that’s how we kind of got started so and and there they agreed to to to fund us for us c we we.

Alejandro Cremades: And when you say reputation when you say reputation? What? what do you mean with reputation. What were some of those say traits that you were like I think this guys could be a good fit.

Sahill Poddar: So yeah I think the things that we were hearing from the team at robinhood. Um, and you know had experienced ourselves was how much rigor ribbt used to put in there and the questions they asked teams. Um, both during a dueligence process but also in a board meeting. Um, and you know they would always ask the toughest questions and as ah as a founder who is seeking truth in his business and is his ah her business. You want that? Um, secondly they are naturally very focused on you know, financial technology companies and that’s that’s essentially what they do as a result there is just a. Um, dense knowledge but also a dense network of um connections that ribit can make in in the financial technology world which which you know we wanted to leverage for series. A we raised? Um $30000000 roughly from thrive capital. Um, the way I think about thrive superpower is that they are you know, very connected to the old world in both America and nationally and when when we looked around we we you know our thinking was that that’s something that’s missing in the in the powerffin social graph. We also love our partner and board member. Ah, there who himself is building a company and as a result um you know is is very sympathetic and um, empathetic towards a founder’s journey.

Alejandro Cremades: So So I guess now as as you’re obviously raising money from from this incredible people. You know you’ve you’ve done that on the equity side. How does it work on the Deb Side. You know like when when you raise debt. Ah, how does it work. Why would you raise debt. How do you put that debt to work. You know. Tell us a little about that and how it’s maybe a little bit more different than the equity side.

Sahill Poddar: Yeah, um, so I think the key difference in mindset between a debt and an equity investor is an equity investor when they look at a company they they ask themselves. You know what is the 1 thing that could go right here and they find 10 different companies and and hope that. You know one of those 10 things work out well in which case they generate returns and that’s essentially their business model. Um the business model for debt investors is that they look when they look at a company they look at all the different things that can go wrong. Um, and they’re really protecting for the downside ah versus trying to optimize for you know this asymmetric upside. I think founders talking to debt investors have to internalize that and and eventually have to execute and build processes to make them comfortable around that um, any company that is you know capex and incentive intensive business will initially have to fund things out of equity in order to prove. Um. To debt investors that this is debt worth financing so we do risk that you know using some of our seed funds to initially give capital to small businesses. But once we had a bit of a track record we approached debt investors and were able to. Effectively leverage our equity to raise debt. Um, so for every you know dollar of equity that you ah that you have you can potentially raise like 20 x more debt.

Alejandro Cremades: So then so then in this case too. I mean when we’re talking about investors you know, Obviously they really have to buy the vision you know and get excited by the Vision. So I Guess as we’re thinking about that imagine if you were to go to sleep tonight. So I held and you wake up in a world where the vision. Ah, Parafin is fully realized what does that world look like.

Sahill Poddar: Um, it would be a amazing world. But but ah to be more specific. You know it’s a world in which a small business is able to borrow money spend money store money save money. Um, and do all of those. Via the platforms. They sell their businesses or their products on platforms like Amazon Door Dash Etsy E Bn B Mindbody worldpay um you know these are platforms that small bills interact with every single day. And they also should be the financial providers for these small businesses. So that’s what the world looks like.

Alejandro Cremades: So as we’re talking about people here. Obviously you know investors I want to I want to keep talking about people you know and and you know the folks that you’ve been able to surround yourself at the paraffin with I Guess how do you go about making sure that you’re hiring good people.

Sahill Poddar: Um, there’s a lot of different ingredients that go into it first and foremost um I personally believe in order to hire the best people you need to provide them as much transparency as possible and that goes beyond. You know, just team members also true for customers investors business partners. Um, so try and be as appending as possible because that will attract and actually very authentic people secondly have ah you know what’s a ah non-negotiable is to have a process in place where existing team members can vet incoming team members. Um, and test them for intellectual rigor. Um, and the third is you know, try try and really understand if they will be a good cultural fit which means 2 things First they have a very clearly defined culture in your company and then make sure these people are a good fit for that. Um.

Alejandro Cremades: Um.

Sahill Poddar: Yeah, so.

Alejandro Cremades: And also you know when you’re getting people you need to ah to rally them you know and they need to get inspired to with a culture. So ultimately, what’s culture. You know how how have you guys gone about shaping this up and. Establishing the right type of cultural values for the business.

Sahill Poddar: Yeah, um I paraffin the cultural you know our cultural tenets or cultural values are essentially on the following first and foremost is intellectual honesty What we mean by that is um, you know.

Sahill Poddar: Focus and relentless pursuit of discovering the truth and and getting to the truth every business has to eventually face the truth and you know be it public markets or an m and a or you know your customers or the growth of your business. It’s all kind of. Um, conditioned on on you discovering and actually creating value for your customer for your customers. So let’s try to be as intellectually honest and try to pursue the truth as much as possible. Secondly is that of efficiency. You know I think there’s a period in in Pre Twenty Twenty one and you know in the 0 interest rate environment where a lot of companies had forgotten that and at the end of the day they exist to make profits and you know, ah the um amount of people you hire kind of the amount of ah both ads to how slow you are but also operational cost. So let’s try to be as efficient as possible. Not just in terms of. Dollar resources. But also time resource. Ah if you can do something quickly and you know get the same learnings from it then let’s not wait for um, the fully baked solution or the most perfect solution. The third is that of accountability. Um, you know the best people want to work around highly accountable people. And by by accountability. What I mean is that you know you really do what you say? you’re going to do um and if you are not capable of doing that then have very good reasons as to why that was not achieved. Um, and if you learn something new. Um about you know the failure mode try to fix it the next time by doing something different and the last.

Sahill Poddar: Um, you know most important cultural Tenet is that of empathy. No one wants to work around assholes. So we you know try and be as kind as possible. Um to to everyone around you.

Alejandro Cremades: Ah, you were talking all the environment you know earlier? Obviously you know now a ah much different Environment. You know with this macro. Um, you know, ah landscape that we’re looking at and you know you say you guys you know are really helping there on supply and capital to businesses that face Institutional Barriers. Ah, in Financing. So I’m wondering like how has the macro environment shapen up your guys say say outlook in a strategic roadmap.

Sahill Poddar: Yeah I would say at a um at a personal level. It’s made it easier to make tough decisions because you know there is no hiding so to speak and and that’s that’s ah, a really big positive that has come out of it. Secondly it. And actually makes us think much harder about where we want to be spending our time our resources um and and then thirdly you know we have a very clearly defined goal. Um about you know, reaching certain business metrics and those are now more so defined by. Um, what we expect the the capital markets to look like in the next twelve twenty four thirty six months versus an environment which was you know the sort of pre 2021 Twenty Twenty two environment where it was almost a given that as long as you show revenue growth you will ah be able to raise more money which which isn’t the case today today you know. People care a lot more about margins. So let’s make that the most important metric to track and and grow as ah as a business.

Alejandro Cremades: So in this case, imagine you know because before I was talking to you about vision and the future I want to talk about the past but I want to talk about the past with a lens of reflection imagine I was to put you into a time machine and I’m able to bring you back. You know back to that moment that. You were still working you know in in Robin Hood you know, maybe back to that 2020 you know time where you guys were still not ready to give the um, the notice but you know something was cooking. You know there in the backburner and you guys were thinking about like maybe you know doing something on your own but let’s say you were able to. A sit down with that younger sahill and being able to give your younger self one piece of advice for launching a business. What would that be and why give me what you know now.

Sahill Poddar: Um I think it’s hard to put it in as one single piece of advice. Um, if I were to put it in 1 single piece. Um gosh I um, maybe I’ll try in putting it a few different pieces of advice I think first and foremost. Speed is your best friend and you know this cannot be overstated. Um, a company is primarily defined by the number of tough decisions you make so you know get really good at it and don’t be emotional about it. Um I mentioned this earlier but you know I sincerely believe that the best people team members customers partners. Need as much transparency as possible. So try to be as authentic as possible. Um, and then I think lastly I’ll say product market fit is the single most important thing do not fool yourself into believing that you have it if you don’t.

Alejandro Cremades: I Love it. So why? So Hill for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

Sahill Poddar: Ah, you can email me at first name at parafin.com or I also have a x account x.com/lihas which is my name spelled backwards.

Alejandro Cremades: Amazing easy you know what? hey sa hill thank you so much for being on the deal maker show today has been an honor to have you with us.

Sahill Poddar: Alejandro. Thank you so much for having me. It’s been an absolute pleasure.

*****

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