Laurynas Zabulis, CFO at Nord Security, is playing a starring role at one of Lithuania’s most famous success stories. Cybersecurity unicorn, Nord Security, went from being bootstrapped to a $3billion valuation in 12 years. Laurynas became CFO after a stint at Surfshark (which merged with NordVPN in 2022). His achievements at NordSecurity include leading the first funding round for $100m – technically a “seed” round he says (unusually the bootstrapped enjoyed revenues of over $100m when it approached investors). Laurynas is also building a purpose-driven finance team of 90 talented people across the department to deliver a “forward looking finance function” that propels growth at the leading startup. Laurynas has set out a powerful mission for FP&A whose vision to “earn respect from stakeholders at the company”, “have a seat at the decision-making table”, and use data and detailed knowledge of growth drivers to “make strategic decisions that drive our business”.
In this episode:
- Moving back to my home country of Lithuania, from London. after success in investment banking (and not listening to those who tried to talk him out of it)
- Battling the “negative connotations” of VPNs when talking to investors and and building conviction around the management and culture of the company
- Bringing finance to strategic decision-making at the company including a CFO tech stack focused on “availability of data and of analytics in a more timely fashion”
- Investing in building finance relations with stakeholders in the company (from engineers to product development)
- Building a finance team of 90 people based on data, tech, and stakeholder engagement
- FP&A analysis powering painful decisions to sunset certain products
- Our FP&A team structure at Nord Security and the results we expect
- Benefit of working with founders and the culture this provides
- The Lithuanian tech ecosystem and finance opportunities
Connect with Laurynas on LinkedIn: https://www.linkedin.com/in/laurynas-zabulis-0206333/
Full transcript below
Glenn Hopper:
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This is fp NA today. Welcome to FP&A Today, I’m your host, Glenn Hopper. And today we have the privilege of speaking with Laurynas Zabulis, the Chief Financial Officer of Nord Security, a global leader in cybersecurity and privacy solutions, renowned for its flagship product, Nord VPN. Under Laurynas’s Financial Leadership, Nord Security has achieved significant milestones, including two $100 million financing rounds, most recent of which elevated the company’s valuation to $3 billion. Laurynas’s journey to this pivotal role is marked by extensive experience in investment banking and corporate development.
He served as vice president at Moelis & Company in London and New York focusing on mergers and acquisitions across various industries. Upon returning to Lithuania, he joined Surf Shark, a rapidly scaling portfolio company of Nord security, overseeing operational finance and corporate development activities before being promoted to the CFO of the full Nord security group two years ago. His strategic vision and financial acumen have been instrumental in Nord security’s growth and profitability beyond his professional achievements. Laurynas holds a bachelor’s degree in management from the University of Warwick, and has completed executive programs at the Wharton School and Saeed Business School at the University of Oxford. His leadership continues to drive Nord security’s expansion and innovation in the cybersecurity sector. Lorena, welcome to the show.
Laurynas Zabulis:
Thanks for having me.
Glenn Hopper:
So, uh, tell us a little bit about yourself and how you ended up at Nord Security.
Laurynas Zabulis:
Yeah, so, uh, thanks a lot for the, um, intro, Glenn. I think, um, you’ve covered it, um, fairly extensively. I can just add a couple of points. So I was born and bred in Lithuania. I moved to, uh, to the UK to attend university. And after that, I spent the, initially eight years of my career in investment banking in London and New York, learning the ropes of, um, financial and, uh, strategic analytics and, uh, deal making. After that, I decided to make a pivot in my career and, um, move into more of a manager managerial, um, operational role at a rapidly scaling startup. And I also decided to change geographies and come back to my home country of Lithuania. At the time, it was a fairly bold move and, um, my family and my close friend circle tried to talk me out of it, but I, I felt a strong conviction of coming back home and joining, um, what at the time was a vibrant, but still much earlier stage startup, tech startup ecosystem.
So I joined SurfShark, which at the time was a company of around, um, 20 or so people. Now it has more than 400 employees. It had only, uh, recently started commercializing, um, its first product star sharp VPN. And I really have the benefit of seeing a business, um, scale very rapidly. I was the first hire in an operational finance team. My role comprised a fairly broad breadth of responsibilities as a common for a startup at that spa. At, at that stage, I, um, contributed to building out the dig digital payments, um, infrastructure, um, given that, um, it was a SaaS, uh, business. So we needed to make sure that we have the right infrastructure to collect, um, digital payments from our users. You know, starting from credit cards going on to PayPal, you know, app stores, um, crypto. Um, I also started building out financial reporting analytics, treasury capability, and, um, so forth.
I did that role for a couple of years. Um, and after that, um, I was tasked, um, with a fairly grand project of leading the funding round for the broader, uh, north security portfolio. So before that, north security products were, were fairly decentralized, but, uh, and it was a bootstrap company, and the founders of the company decided that it was, it was right time to raise institutional capital to increase the credibility of the company on a global state, uh, on a global stage, um, and help it, um, accelerate further with, um, with its growth. In order to do that, we needed to set up the right, um, infrastructure so that we could attract external capital from, um, tier one financial investors. Um, and I was tasked with leading that, um, fundraise process, uh, for the full, for the full group. It was, uh, a fairly tough and challenging process.
We realized that we’re nowhere near ready to do that and do that quickly because we needed to make sure that we have the right clean data in place, that we have a fairly coherent equity story and business plan. You know, the business wasn’t used to thinking in those terms, you know, it was kind of thinking about the next quarter or maybe the next quarter, the, the quarter after, and, and, uh, looking at cash inflows and outflows, but, uh, not really thinking more coherently in terms of how to communicate that to a sophisticated set of investors. So it took us just under a year to execute that funding round. It was quite interesting because the company was already doing, you know, more than a hundred million dollars in, in, in revenue. So it was a fairly substantial scale, you know, and, um, you may conventionally it could, it would be called a seed round because we were doing it for the first time.
But, um, it’s, it’s an odd seed round if you’re, if you’re raising, um, a hundred million dollars, but a result of that. As a result of that, we went to fairly broad range of investors. Uh, we spoke to, you know, large cap VC funds, growth equity funds, um, private equity funds that did minority rounds. And, um, over time narrowed down the list, uh, to a few. And, uh, ultimately it turned out into a, a very successful project for the company. And we raised a hundred million dollars at 1.5 billion pre-money valuation, um, becoming the second unicorn, um, out of our home country of Lithuania. And following that process, the founders of the company entrusted me with the responsibility of, of being the, the group CFO. So I was the first CFO of the whole group. As I mentioned before, the specific separate, um, family of products was being managed in a fairly decentralized way from an executive management standpoint. And the finance function was the first one that was kind of combined and centralized, um, at the group level. And I, I, I, um, have the pleasure of being entrusted with, with that responsibility. So I’ve been in that role for, for two years now.
Glenn Hopper:
Okay. And that’s there’s a lot to, a lot to unpack there. It really is, like you said, I mean, the idea of raising a seed round when you’re already doing over a hundred million in revenue, it’s, I, I imagine valuation was tricky because I would think typical vc, you know, they’re, they’re looking for the, the hockey stick and they’re concern about valuation if they’re coming in at 1.5, you know, what’s the, uh, what’s the upside potential here? So, um, here, um, but the fact that the company had been bootstrapped and was that financially successful at that point, probably, you know, opened the doors to, to some bigger VC firms and everything was, was it, was it challenging telling the, uh, Nord security story? And I mean, as you were reaching out to the, uh, different investors? ’cause I think, you know, a lot of people, if you’re, I, I know, uh, Nord has a, a pretty strong advertising budget. I know I’ve heard a lot about <laugh>, uh, about the firewalls and, um, or the, sorry, the VPNs and, um, the company in general, but how were you received when you went out to, uh, to raise funds?
Laurynas Zabulis:
I think the first impression of the funds was very favorable, because I think just the very nature of the fact that you can bootstrap the business to such scale is, is impressive in and of itself. I think there was a slight sort of valuation discount resulting from the fact that, you know, we are a Lithuanian company. It would be, would’ve been probably quite different had we been, you know, a company out of Silicon Valley or York. But I think we’ve, you know, we’ve, we’ve dealt with that, uh, fairly, uh, favorably. Also, the fact that the, the, the, the cybersecurity vertical within which we’re operating VPN to some investors that we’re not as aware of the space, it may have carried, um, a slightly negative connotation because sort of the legacy reputation of VPNs before they became mainstream cybersecurity technologies that really protected people’s privacy and security online.
It had slightly, you know, negative connotation in terms of what those things were used for in terms of content access and sort of, um, negative content access, um, et cetera. But when those funds that went into further diligence and really understood the fundamentals of the business, and really understood the industry tailwinds benefiting the broader cybersecurity space and really build conviction around, uh, the management team and, and the culture, um, of the company, that’s probably one of the bigger selling points that we’re also pretty evident, um, from interacting with us. You know, I think that helps build, um, you know, strong conviction for the funds.
Glenn Hopper:
Fascinating story. And I think, and we’ll get a little more into that, but I wanna dive into the, to the role there, because as the first CFO for the company, you were doing all this fundraising before you had the, the CFO title. And I guess, you know, coming in with the company already, um, at that size, and then you, you take over the CFO or you’re actually, you’re the first CF O2 years ago. What were your main challenges then, and what strategy did you deploy to kind of get, you know, you’d landed that first funding round, you went through another funding round, increased the valuation. Walk me through the, the process there when you, when you took over as CFO.
Laurynas Zabulis:
Mm-Hmm. <affirmative>, I’d say the, the challenges were twofold. So before we had a centralized finance function that was well invested in, you know, finance. Um, within the broader, um, business org chart was perceived more of a, sort of like a compliance role, compliance in terms of, you know, tax audits. There was a little bit of fp and a at the broader group level, but, um, it was in a, in a, you know, done in a fairly basic setting, you know, looking at cash in and, and, and cash out. So my, my first challenge was to kind of bring, um, finance to a strategic decision making table at the company. And, um, in order to do that, I had to, you know, really invest a lot into the finance infrastructure. I had to, um, make sure that we clean up a lot of this legacy, um, finance debt and go through the very basics, look at our charter accounts, look at our GL entries, make sure that we have the right reporting structure in terms of how we look at cogs, how we look at our sales and marketing expenses, how we look at our opex, et cetera.
Then I had to make sure, and, you know, get the buy-in from the company founders that we can upgrade our technical infrastructure to make the sort of availability of data and of analytics in a more timely fashion. So we’ve improved our ERP system and, and, and made it more scalable, made it more applicable to the needs of our very rapidly growing business. We’ve invested into, um, financial reporting tool set that would allow us to see the performance of the broader company group and of the specific products in a fairly detailed way, look at their unit economics, look at their p and ls, and then cash flows, um, and whatnot. We’ve, um, implemented an expense management platform. We’ve implemented a treasury management platform where we can see all our bank cash flows and monitored them and, and invest any additional proceeds. We’re in the process of putting together a procure to pay system, which, um, ensures that we have, um, you know, appropriate cost management, that we have the right approvals in place in areas where we spend, et cetera.
And as a result of that, we have a, a more comprehensive financial suite of data and of metrics that can be deployed to make strategic decisions for the company. So that’s kind of like the first, um, big initiative. The, the second big initiative was really to invest in building, you know, good relationships with the key stakeholders within the company. And I think, um, you know, this, this part is often underestimated and, and we tend to think, uh, of the technical skills as being the, the core, um, in order for you to effect change within the company. But in, in, in my case, the key stakeholders that I had to deal with, um, from, from, from commercial folks to engineers, to to product development people, I needed to make sure that, you know, I have their buy-in because in order to make some of the changes I talk about, it required those folks to, to, to really contribute to that.
And I guess the final thing was, you know, given it was a, a new role and, um, um, it required reorganizing the finance function as it was before. I, I, I mentioned earlier that, um, we had, um, sort of some finance folks scattered throughout different products, um, in order to combine them and required quite a lot of, um, organizational change, which for some people was, um, was not comfortable because it required, um, them to, to get outta the comfort zone. But I think we have now a really a well-functioning finance team of around 90 people spread across several departments. So FP&A accounting, um, financial control, procurement, treasury and finance, um, systems. And, um, you know, it’s been, it’s been a challenging, uh, but very rewarding, um, professional experience, um, from that perspective, particularly doing it for the first time, um, for, for at a company of, of such kind of complexity.
Glenn Hopper:
Yeah. And I love, you know, it’s interesting, it sounds like this was, uh, an organic move for you, but thinking about, um, business partnering in recent years and how finance and accounting people getting out of sort of the ivory tower of just the accounting function and being true partners across the business, I think it’s really shifted the, the office of the CFO and, and certainly fp and a where it takes us out of this. A million years ago when I started in finance, there was this idea that we, um, the, the finance people were, um, you know, somewhere between a NARC and a referee <laugh> that we were, uh, you know, just airing everyone’s dirty laundry, and they didn’t have any say in it, and they felt like they had to just, it was a very adversarial relationship in my first, uh, finance role because, you know, we’d fight with them about the budget, we’d fight with them about <laugh>, their KPIs and all that. And this business partnering is so important. And I guess since you’ve been built these relationships, I I, I’m imagining it’s, it’s not just, obviously it’s not just you, it’s your team. Can you, uh, tell me a little bit more about kind of the business partnering there?
Laurynas Zabulis:
Yeah, I, I think, um, you, you refer to some good examples that, you know, you, you had fi you have to fight with the finance folks over budget and, um, you know, over any sort of incremental expenditure, et cetera. Um, I think, um, if you approach your role as a business partner, um, and as, as a, as a business enabler, it kind of changes the pendulum, um, to your favor, um, a little bit. But I think in order to do that, you really need to, um, be well equipped, um, and well prepared and sort of make sure that you earn that respect from other stakeholders of the company, and you earn the seat at the big boys table at the, at the decision making table. Um, uh, right, so I think as, as I mentioned earlier, you know, one of the first things that, that we try to do is, is to kind of clean up the finance debt, particularly when it comes to data, and make sure that we have a very clear picture of the unit economics, of the business, of the key areas where we earn incremental, um, you know, profits and, and where we lose money.
Um, you know, once, once. And, and that also requires a very good understanding of the business, um, per se. And that’s another thing that, um, I, I, I really try to sort of ingrain within my team, particularly to the new joiners. You know, they can be very strong experts within their particular technical domain. You know, they can be very strong, you know, experts of, you know, IFRS, um, accounting or, or, or, or us gap equivalent in the states. But you really need to understand how a SaaS business works, how we sell our products, what are the go-to-market channels? What are our biggest cost areas? Because as a result of that, you’ll be able to better interpret the data and have a more meaningful relationship with the folks within the organization that benefit from that data to make their own, um, strategic decisions. And, and that requires very strong buyin from the finance team that requires also strong buy-in from, um, from the, you know, key stakeholders of the company, key senior management, um, of the company.
I think I said that I think it’s also important to, to note that, um, you know, from my perspective, I benefited from fairly good tailwinds within the organization. Um, as well, you know, we had raised our first, um, institutional round of capital. Um, there were certain obligations, um, from our new investors that we had to ad adhere to. So for example, we needed to, um, you know, report on our business performance, um, on a monthly basis in a fairly comprehensive way. We needed to start doing annual budgeting. You know, the first time that we did annual budgeting, it was a very, very, um, painful, um, and lengthy and inefficient process. We’re now doing it for the first, uh, third time, uh, this year. Um, it’s, it’s, it’s, it’s, it’s much quicker and, and, uh, much more smooth. When we started looking at the business in a more long-term, analytical way, we also made some fairly important strategic decisions.
You know, once we had that better visibility as a, as a result of the help from the financial data and from sort of the bigger, um, effort and focus from the key management stakeholders of the organization, when we started doing longer term strategic and financial and, and product roadmap planning, we saw that certain products in our portfolio, of which we have around 15 now, didn’t make viable financial sense. There was just not sufficient product market fit. So we had to make a fairly, um, you know, big decision to sunset, um, a couple of pro uh, a couple of, um, products. Um, we are now in a much better position to be able to invest, um, in our new product portfolio. So for example, Mo you know, most recently we launched a, a, an EIM product in the, um, telecommunication space, which will have a very nice cybersecurity feature set associated with that.
You know, it requires a lot of investment in order to really gain market share. We have very clear visibility of how much capital we can deploy and what sort of unit economics we can expect and what sort of impact it would have on the group level when it comes to, you know, our, our, our growth metrics, our, our our margin, um, our business composition. And, uh, even look at relative public market valuation benchmarks. If, let’s say we wanted to, um, you know, IPO the company one day, or if we wanted to make, um, you know, um, if we wanted to attract further capital, or if we wanted to make an exit, how would we comped, how would we be comped, um, against, um, some, some of our public market peers,
Glenn Hopper:
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Everything that you’re talking about is how you’re transforming the idea. And I think that this is, we’re, we’re moving away from it, but there’s still an idea in business a lot of times that finance and accounting is a cost center. And it’s, and when you talk about, you know, giving that level of insight, sort of the data-driven clarity, that’s how we move from that. It’s no, that we are a strategic partner that is helping you go from a hunch to a hypothesis that we can, you know, then move on. And the idea that, you know, giving that product level reporting and, uh, you mentioned data and analytics a a lot there, and that’s, um, and that’s really key. And I’m wondering, you know, you mentioned when you took over as, or when the CFO role was first established, that there was a little bit of light fp and a, and obviously you’ve expanded that kind of to the, to the next level.
Tell me about the task you set for FP&A at Nord Security. And I’m, you know, I, having been in that startup world for so many years, myself, thinking about that first year of the budget, especially at the scale where you guys were, it’s so difficult when you don’t have, maybe the chart of accounts wasn’t set up right. Maybe the departments and divisions and geographies were not clear. So you’re trying to do that first budget without having a good picture of run rate and trends by the areas you’re trying to budget. I don’t, I’m, I’m throwing a lot at you there, but I’m picturing sort of FP&A, the approach, the reporting and then converting that into budgeting and in sort of the evolution of the office since you’ve taken over. Yeah.
Laurynas Zabulis:
So I think, you know, our FP&A team is, is really benefiting a lot from the very hard work that their colleagues in accounting and financial control are doing in terms of making sure that the data with which they work is sort of clean and, uh, clearly structured. Now, fp and a is obviously more of a, uh, you know, front facing role when it comes to dealing with the key stakeholders within the company. And the way we structure our FP&A department, um, is based on, um, several specific focus areas. We have a financial modeling team that works with the key product owners when it comes to, you know, modeling out different scenarios for the business and modeling out, you know, one year when it comes to the budget or, or three years out when it comes to our more detailed sort of, sorry, more high level, um, strategic roadmap, um, for the business.
Um, we have a business partnership team, um, that ha that holds the relationship, um, with key product heads and, um, key cost categories and really dives deep into them and, um, is able to provide specific insights to the business. So, for example, we have business partners that look after our COGs that look after our, our g and e expenses, um, and work with the cost owners for those, uh, respective categories. And then we have a financial reporting team that is responsible for reporting our, um, high level results, diving deeper into specific product performance, unity economics, comparing our performance versus our key competitors and, uh, the broader sort of tech universe, um, and, and things like that. And the final, um, FP&A team is with folks that are responsible for making sure that our data is accurate and, uh, clean and, um, and readily available.
. Just to elaborate on, on that point, because it may not be very, um, intuitive. So we manage our business on a cash inflow, uh, basis or, or, or, or financial billings basis because we sell software of, of, um, various, um, duration from monthly plans to two year plans. And, um, before we started, you know, implementing some controls around data reporting, there was a mismatch in terms of how different teams interpreted these inflows. Some looked at gross billings, some looked at net billings, post refunds, some interpreted refunds as, and when they happen, some interpreted refunds as in when the initial purchase takes place.
So what the, the data team is doing is making sure that we have a very clear set of rules in terms of how that data is reporting, uh, reported, and we have a very clear set of steps within the technical infrastructure, how that data is created, distilled, and actually, you know, transformed into what is usable by, by the key stakeholders. So that’s the high level overview of, um, of our, um, fp and a team. Now obviously, there’s, there’s still a number of, of, of challenges involved, and it’s not always smooth sailing, but I think, um, you know, it’s, it’s a very big value driver for, for the finance team and, and for the broader organization.
Glenn Hopper:
That kind of goes along with, before, before the show we were talking, and you said that your priority as CFO is putting the right ingredients in place to make the finance function more forward-looking more automated. Can you tell us a little bit more about how you see a forward-looking finance department and what you’re doing in, in that direction?
Laurynas Zabulis:
Absolutely. So I think, um, one of the key ingredients of making that finance function more forward looking is, is, is to make sure that you have the right technological infrastructure that can help you do that. And I, uh, I, I touched upon that briefly, um, at the beginning of the conversation in terms of various tools within our stack tech stack, um, that, that we deploy at the moment, and we continue adding to that. The other element is, is to make sure that the financial data that we create is applicable quick to digest and relevant for the business, um, to help it drive strategic decisions. And the third element is to make sure that we have the right financial infrastructure in place to help the business kind of maintain its, its rapid growth base. For example, we are, as Nord security, we’re in a very innovative product development stage.
Um, at the moment we have launched around three new products, uh, last year we’re, we’re in the process of quickly launching a, a few additional products in, in, in early 2020. So, so my team needs to be in a position where they can quickly adapt that and, and, and provide the right financial infrastructure for the key decision makers in terms of being able to really understand what are the growth drivers of those new verticals, what are its unit economics, how much capital we can deploy the, at the, at the global business level, and also how that impacts the broader group performance and, um, and metrics. So I’d say it’s kind of like a symbiosis of, of, of, um, these factors.
Glenn Hopper:
What do you see as the differences from when you took over fp and a to where they are today and sort of the impact and the, the kinds of reporting that you’re doing now versus early on now that you’ve kind of evolved and built out your team?
Laurynas Zabulis:
Mm-Hmm, <affirmative>, yeah, absolutely. So that’s, um, the, the, the capability, um, of the fp and a team, um, when it was established two years at the group level and, and, and what it is today, um, has really, um, evolved. So initially we started with very basics of, of being able to report the performance of the business at a fairly high level. At the moment, we’re able to perform to, to, to showcase the performance of the business in a very detailed product level way, right? So I guess the, the impact that that creates to the key decision makers and, and shareholders of the company and, and, and product, uh, heads, it’s, it’s quite profound because they can use that data to make strategic decisions that, that, um, that can drive, uh, their business. And,
Glenn Hopper:
You know, we, we talked about the, the finance department in general, but I think you also, and, and how interesting it was to be raising at a, you know, at already doing over a hundred million in revenue. But another interesting thing about Nord security is at the size where the company is today, it’s still founder led. I wanna touch on that a little bit because typically, you know, the founders may be, you know, they, they come in, they bootstrap it, they get it to a point, and PE comes in or whatever, and their shifts, and you have a, you know, a different management team in place. But for Nord security to have grown to this $3 billion valuation, still founder led, you’re the first CFO there. Tell me a little bit about the organization in working with the founders who’ve been there from, you know, from the whiteboard, blue sky <laugh> days, uh, to, to where it is now.
Laurynas Zabulis:
Yeah, absolutely. So, you know, uh, from my perspective, it’s my first CFO role in my career. But, um, when I compare the experience with my peers who work in a different organizational setting and where there’s an executive, professional executive management in place, I’d say the, that setup and the experience is, is, is very different. Uh, I have great privilege of working with two founders of the company who have this unconventional organizational setup because they hold the co CEO title and they both manage the business on a, on a daily basis. They have very complimentary skillset in terms of their background. You know, one is more sort of technical technology oriented, the other is more go-to market oriented. They have a complimentary, um, personality. They even have a complimentary, uh, sort of daytime routine. One is more of an early riser, or the other goes to bed quite late.
So it’s kind of like this, um, um, around the clock, um, operation. But I think the benefit of working with, um, founders is that first of all, they know the business inside out. They’ve been here from, from the very start. They’ve hired, um, all the, um, you know, initial couple of hundred of people. Now we have 2000 at, at, at, at North Security. So at some point they all obviously kind of, uh, shifted away from that responsibility, but they, they’ve hired all the key management roles to, to match like the real cultural requirements of a Nord security. I would say they’re also much less risk averse, um, than those folks that would have been hired from, uh, from the outside to lead the business, or that would have a, you know, a higher accountability to the, you know, a more complex sort of shareholder, um, ecosystem. And, um, I think the founders of North Security are also very keen to sort of empower me with the freedom to make decisions and, um, to drive the, the growth of the finance function.
Glenn Hopper:
I wanna talk a little bit, this is maybe primarily for our US audience. Um, I wanna talk a little bit about Lithuania, because certainly everyone in the EU knows what’s going on there. But before we, uh, talk about, uh, Lithuania kind of as this, as this tech hub that it’s become in, in recent years, one of the things you said was that coming back to Lithuania was a, a pivotal part of your career. Can you tell us a little bit about that?
Laurynas Zabulis:
Yeah, absolutely. No. So Lithuania’s home, um, first of all, it was a pivotal, uh, point, um, in my career, more from a personal standpoint, but I think, um, from a, a professional standpoint, the Lithuanian Ecotech ecosystem has developed a lot over the last 10 years. Um, we now have three tech unicorns. We have a, a a number of companies that are very successful and that have built global businesses. And, and, and there’s a couple of reasons for that. First of all, there’s a strong entrepreneurial mentality among, uh, the Lithuanian population. Even during the 20th century when, you know, a large part of that period, we were under, um, the Soviet occupation, Lithuanians stood out as having that, you know, high entrepreneurial skill, um, spirit. They would hustle and, and, uh, and, and try to make better life to the extent possible within the communist economic regime.
Lithuania has, um, a strong, um, scientific talent, uh, coming out of university. The local market is quite small, which in and of itself is quite attractive because when you start building a business, you need to start selling abroad and, and thinking internationally from day one because, you know, the buying, the purchasing power of the, of the local market of, of under 3 million people is, it’s just not, uh, you know, not sufficient to, to really scale the business. And, you know, Nord security is, is a case in point. We’re a very geographically diversified business. You know, half of our revenue is coming from North America. And, um, and we started doing that from, from day one when the business was, was founded, um, 10 years ago. And, um, there’s a very strong knowledge sharing ecosystem within the broader tech community in Lithuania. The community itself is, is is not that, that big.
And, and sharing that institutional knowledge is, is very helpful. So for example, when we’re going through the, the, the, the funding grounds that we did, there’s some very niche practical knowledge that you can gain from that experience around contract negotiations around, um, you know, who the appropriate investors would be for your business and how to have access to them. And we were very keen to share that, that knowledge. So I think, um, you know, from that perspective, the, the country’s facing very, very, um, strong tailwinds. I was fortunate to actually join the local ecosystem at the time when it was going through a very rapid sort of, um, scaling, um, and progression. And, um, I think there was a, there was a long way to go still. And probably the, the final point I’d like to make from that perspective is that there’s, um, you know, the Lithuanian diaspora from abroad is coming back more and more because the vibrant tech ecosystem is really offering great employment opportunities in areas where you can make an impact in, in areas where you can work on a local product and, you know, grow it to a global scale.
And that’s actually at Nord security, probably one of the bigger motivational factors for the vast majority of employees, because they’re working on building leading cybersecurity products that are particularly within the core segments of, of, of Nord around personal security and privacy. They’re building products that are bleeding in the world in terms of revenue, in terms of user account, in terms of brand awareness. And that’s a very strong, um, uh, motivational factor.
Glenn Hopper:
Yeah, and it sounds very similar to, uh, uh, the sort of evolution of Israel a few years ago as a, as a tech hub. And I, and you mentioned, um, early on when you were talking about the fundraising, that there were, you had to take a bit of a valuation discount because you weren’t in London or New York or Silicon Valley or whatever. Do you see, I mean, with three unicorns already in Lithuania, I mean, do you see that the sort of global acceptance and, and the, the building and, and sort of respect of the country and understanding, do you see that changing in evolving?
Laurynas Zabulis:
Yeah, um, absolutely. You know, I, I, I see it, um, firsthand. So I spend a lot of time talking to investment banks, um, talking with the global, talking with the global investor community just to make sure that, um, you know, our, our name is out there and we have optionality if we want to do any subsequent capital raises or if we wanted to do any sort of corporate, me corporate development activities like, um, grow in organically through m and a. And the perception of Lithuania is really strong from that perspective as a result of the legwork that companies like, like Nord and, um, a bunch of others have done, you know, Israel is, is, is obviously much more advanced, um, from, uh, in terms of the tech innovation and in terms of the, um, funding capability from that perspective. But I think the, the sort of the camaraderie and, and the sense of community, I can draw a lot of parallels to the example that you gave to what, uh, in terms of what I see in Lithuania,
Glenn Hopper:
I guess this is may be a difficult question because I know, so, you know, you coming through, uh, investment banking, m and a corporate development, and I always when I talk to, um, but because you do have that, that global experience, I’m wondering your take on the FP&A function and, and fi just corporate finance in general, how it’s viewed in Lithuania as compared to maybe some of the other countries and, and how it is as a career path right now in the US there’s a significant, uh, shortage of, uh, new CPAs, new accountants coming in, uh, into the industry. And you mentioned, uh, kind of a smaller workforce there. So I’m picturing, you know, recruiting and retaining talent and how, so one from the sort of the, the talent side and then two from the, the companies there, how they view finance, because I, I mentioned in the us you know, we’ve financed historically, you just keep getting saddled with this whole idea that you’re a, you’re a cost center and that mm-hmm, <affirmative>, you know, you’re not providing value that you’re just, you know, backward looking and all that. But I’m wondering, maybe you can only speak to Nord, but I’m wondering in general, if you’ve, because you’re in this ecosystem with the other companies, how how finance is, is kind of viewed there.
Laurynas Zabulis:
Yeah, I think it’s an in interesting, um, question and an excellent observation that the perception of, of the finance function within organizations is evolving. I think it’s more of a supply and demand, um, kind of thing. Because the more global businesses you have in the local ecosystem that are complex in terms of, you know, the product suite, uh, in terms of the pricing go to market and, and, and, and geos, the more of an opportunity you can have to deploy FP&A or, or finance more broadly to showcase, you know, strong capability and to deliver good value to the business, the tech ecosystem and this development probably has a strong contribution to that, right? Because probably, you know, Nord security is a good case in point, uh, where you can have, um, FP&A and finance function more general, you know, add, um, strong incremental value. And I think, um, there’s more and more companies within the regional, um, ecosystem that are of that capability where you can, um, you know, make finance, uh, more of a strategic rather than a back office, um, function.
Glenn Hopper:
Yeah, yeah. Well, well said. And I, you know, as we’re going through this conversation, I really, it’s, it’s just amazing to me this being your first CFO role and your background and everything that you’ve had to sort of figure out and, uh, put in place there. And I, I, I know I understand that before, you know, before you took the CFO role, there was certainly a finance function there, but, um, for you to take it, to go, you know, from that first funding round to the next funding round and now $3 billion valuation, I mean, that’s a, that’s a, a high of stakes role for your first CFO. Um, and when I talk to, uh, when I talk to all of our guests, I’m always interested, and it’s, you know, a lot of times for maybe an fp and a analyst or an FP and a manager, I’ll ask them what’s top of mind for their career at the moment, what they’re trying to learn or master.
And I think it’s, I always like to ask CFOs the same question because I think for, uh, people who are aspiring to the role, you know, they’re, everything they’re doing is to get to the role. But I, you know, with everything that you have going on, I know it’s not, oh, I’ve reached the mountaintop now I can just <laugh> coast on my laurels. So I’m wondering what’s top of mind for, for you career wise at the moment, and is there anything new that you’re trying to learn or master now that you are a, a couple years into the CFO role?
Laurynas Zabulis:
I think one of the things I try to spend more time on is outside the realm of finance within my organization, and, um, focusing more on the more sort of technical side of things, particularly product, um, and engineering. Um, and, um, really trying to better grasp the core drivers of the business, not only from a commercial standpoint, but from the technical and engineering standpoint. Because I think in order to be a well-rounded CFO, uh, or or c-level executive, um, more broadly, you need to have a very strong grasp of understanding of, you know, what’s really driving the business. And in the tech business, you know, technology is a very fundamental part of that. So I’m, um, personally know, to answer your question, I’m starting to spend more time on the, on the product front. I think organizationally, we’re now in a position where, um, we can also engage in interesting corporate development activity. You know, we have the balance sheets, um, capacity and, uh, investor funding to undertake, um, M&A. So I was, I’m spending more time on, um, corporate, um, development initiatives as well.
Glenn Hopper:
It’s interesting as when you talk about learning the other areas of the business. So, and I think about this just across finance in general, you have to have obviously that serious domain expertise for all the, the, the finance and accounting and, and everything, you know, there. But I feel like do years ago, it could be, and, and maybe there are still companies that still have this mentality of, I am the domain expert in, in finance and accounting. It doesn’t matter what the widgets are, I’m doing the reporting. But to really add that value, you have to broaden your knowledge. You have to know the business you’re in. Uh, ’cause if you’re just, if you’re just reporting them as numbers, it’s hard to dig deeper and, and unearth the value. So it’s, you know, and whether it’s, oh, I’m the CFO now, and I have to evaluate our finance tech stack, and I, so I have to have sort of some IT level <laugh> of skills and understanding to know what software we’re using to, I need to understand the products and the engineering behind them so I can understand the r and d that goes into it and the, the margins on each product and everything.
But it’s, that’s where we’re gonna continue to add value. And it kind of, it’s kind of an expansion of the, uh, business partnering, I think is just the global understanding of the business. Yeah,
Laurynas Zabulis:
Absolutely. And, and look, it’s, it’s, it’s not easy because your, the agenda of your daytime job is already, you know, full. So you have to make that additional effort to, you know, invest in, in, in, uh, you know, creating the right environment so you can get that knowledge in, in form the right relationships with the appropriate stakeholders, um, who can support you on that endeavor. But I absolutely agree with you. I think you, in, in, not only in finance, but in any other kind of technical domain, you’d, you’d be a much better expert if you understand the full picture. And, um, and I keep, um, sort of trying to push my team, um, to do the same.
Glenn Hopper:
That’s great. That’s great. Well, we are, um, we are running, uh, close to the, uh, end of our, our time here, but there’s a couple questions and we always ask these, and, uh, I always love hearing the answers, um, especially this next one I’m about to ask. We’re, we’re gonna go a little more on the personal side, but, um, what’s something that maybe that not many people know about you, maybe that they couldn’t find out, uh, by just googling you or finding, finding online?
Laurynas Zabulis:
Um, so this information is not yet online. I’m a new dad. Ah, my, my, my daughter is, uh, is, is two months old at the moment, and her pictures are not online yet, but, uh, the, the camera roll is, is, is, is full of them <laugh>. Um, and I would say, you know, my, uh, CFO and uh, fp and a technical experience is not very complimentary with, uh, with, uh, raising, um, <laugh> a young baby, but maybe it’ll come in handy at some point in the future.
Glenn Hopper:
So that’s great. Well, congratulations on that, <laugh>. Thank you. So, um, okay, so let me preface this. I always love asking CFOs this question because I was, uh, I was a CFO for 15 years, and when pri before I was a CFO, I loved, you know, sort of the way that you get cred among your other finance people is how great you were in Excel, in your model building. But now, when someone asked me about Excel, I feel like I’ve, I’ve forgotten so much because you’re not into the models as deep as you used to be. And I was talking to, um, another, uh, another CFO the other day, and, um, we were laughing about if you’re talking to a room full of people and you do something like vlookup, they’re, they all just kind of rub their heads and they’re like, oh, man, you <laugh>, you’re, you’re showing your age right there, <laugh>, but that’s, I still, I still default to V look, you know, instead of index match or whatever. So the question that we get here, and it, it’s, you know, when it’s very different when I ask a very technical programmer or an analyst or someone who’s in it every day versus CFOs or I’ve even had PhD students on where I ask this question, but I’m, I’m gonna throw it out with all that exposition and, and knowing that you’re probably not building models like you, uh, did your days in investment banking, but what is your favorite Excel function and why?
Laurynas Zabulis:
I was getting anxious already when you were framing the question that you’d asked <laugh> like that Yeah, you’re, you’re right. I’m not, um, a power user of Excel, um, anymore, um, as I used to be. But I, I recall that one of the functions that I used when I stopped being a finance user, um, in Excel that I found neat, I may be mistaking as to what it’s called, I think it’s called data validation. It’s basically, um, a function where you can create a dropdown menu and, uh, choose different scenarios, um, that are, that’s particularly helpful when you’re building an operating model of the business. So when I joined my, my, my current company five years ago, and, and the business was at a very sort of early stage, I helped build an operating model and I showed it to the, to the CEO and founder of the business.
And, um, I sort of, um, could click through, you know, several scenarios and the model would get updated and it would show the business’ cash position and, uh, um, and other units economics. And he found it really cool, um, and neat. Um, but, but he, um, you know, granted, he wasn’t, uh, an Excel power user. He, he barely knew how to, how to navigate through Excel. So it wasn’t that difficult to, um, to impress him>. But, um, but yeah, it was, uh, I, I, I, I recall that was, uh, that was a fairly neat, um, question. But, um, you know, my, my excel, my prime Excel days are behind me. That’s, that’s fair to say
Glenn Hopper:
. Yeah. Yeah. <laugh>, I’m so glad you mentioned that one because I haven’t thought about that, but I did, uh, I remember, uh, corporate Finance Institute, I did their, uh, FMVA certification, one of the case studies they had, or one of the things they had you do was you go through and you build the three statement model with that good, or, you know, uh, best case, mid case and worst case scenario. And being able to have, have that flow through, um, you know, the income statement, balance sheet and statement of cash flows and have it all work well, it’s, it is very easy to impress, um, at that point, you know, my, my seniors above me, the CFO or whoever, and, and, uh, and that was back when we, you know, were doing most of our budgeting still in Excel and, um, smaller company. I guess you could get away with it more, but, uh, yeah. That’s great. And I, I love that function as well. And it, it is, I mean, it is useful too to be able to just click through that quickly and see it, how it kind of rolls through the, uh, all three statements. So before I let you go, um, how can our listeners, uh, connect with you, follow you and, uh, learn more about Nord security and, and what you’re doing?
Laurynas Zabulis:
I would say LinkedIn, um, is the best way. If you, if you send me a message or, or a connection request, um, I’d be really happy to, uh, take the conversation further.
Glenn Hopper:
Well, Laurynus, thank you so much for being on the show. Really enjoyed that.
Laurynas Zabulis:
Thanks, uh, Glenn, it was a pleasure. Thank you very much. <silence>.
