From Zero to Hero: Zūm Rails' Remarkable Journey Scaling Payments Solutions with Innovation and Determination A Fintech Success Story: Zūm Rails' $10M ARR Achievement

From Humble Beginnings to $10 Million in ARR

Miles Schwartz, co-founder of Zūm Rails, shares the inspiring journey of growing his business from $0 to $10 million in annual recurring revenue (ARR) in just five years, without initial investor support. Schwartz's entrepreneurial spirit was sparked during his time in the startup world, where he spent the majority of his career. While working at Flinks, a Canadian fintech company, he recognized significant market challenges that fintech companies hadn't addressed, particularly in the payments space. Schwartz presented his idea of merging open banking with instant payments to Flinks, but they weren't ready to venture into payments. Undeterred, he partnered with payments industry veteran Marc Milewski, and Zūm Rails was born in 2019.

The Early Days: Bootstrapping to Success

Schwartz and Milewski launched Zūm Rails around Schwartz's parents' kitchen table, initially intending to fundraise. However, after months of pitching, they faced rejection due to the perceived complexity of their solution and high barriers to entry in the payments space. This led to an unplanned yet pivotal decision: bootstrapping. Through sheer determination, they self-funded Zūm Rails' journey to profitability. Schwartz recalls that bootstrapping was extremely difficult, but it allowed them to maintain control and focus on their vision. This decision ultimately fueled their success.

The Business Model: Streamlining Payments

Zūm Rails' innovative platform merges open banking and instant payments, replacing up to seven service providers. Schwartz's vision was to create a seamless, secure customer payment experience. By validating individuals, bank accounts, and key data points, Zūm Rails prevents NSFs and chargebacks. This comprehensive approach simplifies the payment process, reducing friction and costs for businesses. Schwartz's goal was to create a platform that addresses the entire payment puzzle, and Zūm Rails has achieved this through its integrated solution.

Finding Early Clients and Building Trust

Leveraging their fintech industry connections, Schwartz and Milewski secured initial clients. Signing their first enterprise client hinged on addressing niche challenges no other payments or fintech companies were solving. By listening to clients' pain points and developing tailored solutions, Zūm Rails built trust. Schwartz emphasises the importance of understanding clients' needs and delivering exceptional service. This approach has enabled Zūm Rails to retain clients and expand its customer base.

The Team: Driving Growth and Innovation

Over five years, Zūm Rails has expanded from two co-founders to thirty employees. Key hires include Marcel as CTO and Michael Doron as Vice President of Sales. Strategic partnerships with financial services companies like Fiserv will fuel further growth. Schwartz prioritises hiring talented individuals who share Zūm Rails' vision and values. The team's expertise and dedication have been instrumental in driving innovation and expansion.

Scaling and Expansion

With a $10.5M Series A funding round led by Arthur Ventures in February 2024, Zūm Rails is poised for continued growth. The recent launch of FedNow, the U.S.-specific real-time payment rails, presents opportunities for accelerated adoption. Schwartz is excited about the potential for Zūm Rails to transform the payments landscape. He attributes their success to perseverance, innovative problem-solving, and strategic partnerships.

Inspiration and Learning

Schwartz draws inspiration from successful entrepreneurs, listening to podcasts like How I Built This by Guy Raz and following thought leaders like Naval Ravikant. He believes in continuous learning and self-improvement, recognizing the importance of staying adaptable in the rapidly evolving fintech landscape.

Revenue and Profitability

Zūm Rails generates over $10 million in annual recurring revenue (ARR), with a focus on continued innovation and market expansion. Schwartz's story serves as a testament to the power of determination, innovative problem-solving, and strategic partnerships in overcoming adversity and achieving remarkable success.

A Journey of Perseverance

Miles Schwartz's journey with Zūm Rails demonstrates the importance of staying true to one's vision, even in the face of adversity. Through hard work, resilience, and a commitment to innovation, Schwartz has transformed the payments landscape, and Zūm Rails continues to thrive.