Diary of a VC deal – how SEON became Hungary’s largest Series A round

Bence Jendruszak of online fraud prevention firm SEON opens his diary as to what it took to be Hungary’s biggest-ever Series A raise

Bence Jendruszak and Tamas Kadar founded cybercrime fighting company SEON straight from university in 2017 after being unable to find a good fraud prevention tool.

 One of those rare companies to be profitable within two years after launch, the company saw rapid growth, soon working with the likes of Patreon and Kindred Group. Jendruszak and Kadar relocated the company from Budapest to London. Investment became the next step, given their expanding workforce.

14th December 2020 – a meeting of minds

As with our go-to-market strategy, all of our Series A connections were inbound and there were multiple potential partners who had shown interest. In fact, we were getting our first term sheet offer when Creandum entered the race. They had been referred to us by an ex-angel investor, and the venture capital experts moved quickly because they could see that we were optimised for speed and not fund raising.

Beyond their reputation as Europe’s highest performing fund, having backed some of the biggest names out there like Spotify, iZettle, Klarna and Depop, what attracted us to Creandum was that we were looking for a partner who could introduce us to founders of the best fintechs around who could potentially become customers. They also understood that we were oversubscribed when it came to interest in our Series A round.

Because this all happened in the middle of lockdown, the entire VC deal was done over Zoom calls and emails. All the usual conventions for potential new business partners had long gone out the window, and so working remotely was totally normalised for us – after all, this is how we, as a global company, conduct business now. So, we were truly endeared when Johan Brenner, a general partner at Creandum, who we had been working with asked us for a virtual beer – something none of us were used to.

>See also: 10 steps to securing investment for your business

21st December 2020 – defining details of the VC deal

Once we decided to move forward, the process took a matter of mere days. There was pitching, and Creandum grilled us on pretty much every aspect of the business, from its progress and future plans, to our staff. From there, they voted by consensus as to whether they should move forward with the offer, and I have to say we were humbled when we found there had been universal support for the partnership.

Next came the term sheet offer where we were able to explicitly explain what we wanted from the deal — what percentage for how much funding. It is unusual to be in a position to be able to do this, but we had created a strong mutual respect, understanding and clear lines of honest communication. Ultimately, this meant that the details of the VC deal were felt to be fair and reflect the needs of both SEON and Creandum.

It was strange to think that myself and Tamas had, in just a few short years, gone from working on our company in between lectures at university to winning Hungary’s largest Series A round to date. We always had the belief in our company and our product, but the Series A round takes this to the next level.

17th March 2021 – signing on the dotted line

Before we started drawing up contracts, it was important for Creandum to put us through our paces and complete due diligence. While the initial stage of the VC deal took just days, this process took months to complete. It includes checks on GDPR, certifications, compliance overheads and more – all critical to ensuring that Creandum wouldn’t be getting themselves into hot water later down the line.

‘Covid and the global pandemic was the great leveller’

It was during this time that Creandum theorised Central Europe had long undervalued start-ups, but Covid and the global pandemic was the great leveller. No matter where in the world a person or company was based, no one could travel, which removed the suggestion that you must be in a fintech city in order to be successful. Instead, investors and partners started focusing on how well your company is performing, what your results are, how many customers you have and who you are working with.

Soon enough though the time came for us to put pen to paper and finalise the VC deal. For this, we ploughed hundreds of hours into talking with mutual lawyers, culminating in a five-hour legal marathon on Zoom in the early hours. Between ourselves, the team at Creandum, and our lawyers, we agreed that no one would leave until it was done. All well and good until one of the legal team fell asleep on the call. Also adding to the drama of the day was that I was on holiday when the call came in to say it was crunch time; which meant that as we were signing on the bottom line, I had to run to the lobby of my hotel to print the documents, sign them and hold them up to the camera.

It all went without a hitch however and we saw the impact immediately on our business. After announcing the Series A deal via our company’s social media, our own announcements and coverage in key trade press, we were inundated with good wishes and it was wonderful to see our contacts, both old and new, getting in touch. Overnight we saw three times more inbound interest, bigger brands getting in contact for business, and existing deals were accelerated. What we were hoping for from the VC deal happened immediately.

>See also: Series A to Series D, everything you need to know about funding rounds

18th March 2021 – the real work begins

Going through the Series A process was a real milestone for SEON and we’re incredibly proud of the relationship formed with Creandum. In relative terms though, that was the easy part. After the celebrations, we had short term goals to start working on, and began working closely with the team at Creandum, building productivity, revenue and data analytics as a core function.

We now work with some of the fastest growing fintechs, including Sorare, Afterpay, Nubank and many others, while our APIs are publicly available, and our customers love our dev-led and product-led approach. We know that the total addressable market is vast, and there’s a long way to go when it comes to helping merchants. There’s a lot that differentiates us from other fraud companies and SEON is just getting started in democratising fraud fighting.

Bence Jendruszak is co-founder and COO of SEON

Further reading

How to raise early-stage venture capital for your startup in Europe



Bence Jendruszak

Bence Jendruszak is co-founder and COO of SEON.

Related Topics

Female founders