Greenwood gave KodyPay a spot in the university’s brand-new startup incubator program called Phase One. Chang also jacked into the school’s alumni network. Before long, he’d clicked with York grads John Holmes, the chairman of Hardman & Co., a U.K. investment research firm, and Chris Baker, a professional astronomical photographer and angel investor. Both men advised Chang on establishing a business and put him in touch with professional contacts.
Still, KodyPay wouldn’t amount to anything more than a PowerPoint deck unless Chang could build and commercialize the application. By the fall of 2019 he was still searching for a way to do that when he caught a break. Through Greenwood, he met Ron Argent.
During a 31-year career at IBM, Argent helped design, build, and sell information technology systems to global banks, government departments, and other major organizations. In 2015 he set up Cognition Foundry, a kind of digital lab that took equity stakes in startups in exchange for developing their technology. It also acts as a talent spotter for its sponsor, IBM. In the fall of 2019, Argent met with Chang and a couple of colleagues in a cafe on the south bank of the Thames in London.
Listening to Chang, Argent saw straightaway that KodyPay wasn’t doing anything groundbreaking in terms of the technology itself. He’d already seen similar device-to-device payment systems at work in China. What he did like was Chang’s plan to take terminals out of the equation. Argent could see the immediate financial benefits. “Yoyo was talking about a very scalable idea and one that fits in nicely with IBM’s initiatives in fintech,” he says.
By last spring, Cognition Foundry agreed to build KodyPay’s platform in exchange for a 5% equity stake in the startup. Argent assembled a squad of six to eight software developers in Bulgaria to write the code. He also briefed members of IBM’s senior management team on the venture, as well as its worldwide sales unit. In October, Tom Rosamilia, senior vice president of IBM Systems in North America, interviewed Chang as part of a virtual technology conference for several thousand customers.
Meanwhile, Chang formed a partnership with Cybersource, a company owned by Visa that produces payment processing and security software. In August he closed his first fundraising round with investments from a wealthy Taiwanese family, angel investors, and Uberoi, the former Goldman partner.
Chang, who’s earning the rough equivalent of an A- so far, says he’s committed to finishing school, and, oddly, the pandemic has made that easier because he doesn’t have to physically be on campus and can study and take his final exams online. His parents want him to go for a master’s degree in finance, and he likes the idea of pursuing that in the U.S. But these plans may be upended by his continuing education in KodyPay.
With the University of York set to demonstrate KodyPay’s capabilities once students return to campus en masse, Uberoi and Chang are now putting out feelers as they look toward raising capital in a Series A round. It’s a big step, choosing investment partners at such a formative stage. Chang, with Uberoi’s help, will be courting venture capitalists right as his baby goes out into the world. He’ll be doing so just as the pandemic is undermining in-store shopping during a tough winter.
For all the hopes and dealmaking and sheer toil that have gone into KodyPay, the reality is it may turn out to be just another payments app in a sea of apps. Even with a first-rate strategy and whiz-bang app, it can be hard to get consumers to change their spending behavior, says Van Leeuwen, the payments entrepreneur. “Before you get usage of your product, you have to build acceptance,” he says.
The future of finance will be written by very few authors. Chang is philosophical about the possibility that he won’t be one of them if his venture fizzles, as deflating as that might seem. After all, he’s only 20.
“I can afford to make mistakes,” he says. “In fact, they’re not mistakes when you’re this young, they’re learning experiences. So it doesn’t matter. I don’t have to worry about the future. I just have to worry about the journey.”
This article was provided by Bloomberg News.