For a leveraged finance business that must react to a lot of push and pulls in the market, awareness, preparedness and measurability are key capabilities.
“The best view, most up-to-date view I can have, the more we can be reactive and even proactive at times in this environment,” Roland Jeon, chief financial officer (CFO) at Kafene, told PYMNTS. “We know that rates are going to rise, so we can proactively pull some levers to make sure that our economics are protected, we can still deliver the best pricing and the best products to the consumers, and we still have a lot of leverage and the resources to grow as a company.”
Kafene is a one-stop shop point-of-sale (POS) payment partner and underwriting technology platform that helps merchants offer flexible lease-to-own (LTO) purchases.
See also: Lease-to-Own Plans a Boon to Merchants and a Lifeline to Strapped Consumers
Jeon joined the 3-year-old company in May with a background that includes a decade of experience as a flexible capital investor. As Kafene’s first CFO, Jeon is tasked with setting the strategic direction of the company’s finance organization as the company scales.
Interviewed for the PYMNTS series “A Day in the Life of a Digital-First CFO,” Jeon said many of Kafene’s customers are near-prime or subprime consumers who don’t have access to conventional consumer loans, or even buy now, pay later (BNPL). The company has grown in this sector and is exploring other verticals as well.
“What we’ve done is we’ve taken the lease-to-own construct, which is a very old construct that’s usually been captive in stores like Rent-A-Center, and we’ve digitalized it, virtualized it, to increase distribution and increase access to a lot of variety of consumer sets,” Jeon said.
Being an Efficient Communicator
As a company that is natively remote, Kafene has found that it’s most effective to overcommunicate via Slack, email or Zoom. Because the team members communicate constantly, they’ve built a level of trust that can be hard to achieve in a remote environment, he said.
“I don’t think there’s a good solution other than being constantly in touch and communicative,” Jeon said.
That doesn’t mean forcing a calendar meeting on someone’s daily schedule, but just checking in now and then, Jeon added. Still, getting the full picture can be difficult.
“Something that I would say takes up a lot of mental capacity is trying to overcommunicate and making sure that I’m being an efficient communicator to the remote workforce,” Jeon said.
Related: Voice of the CFO: Inflation Keeps Companies’ Eyes Glued to Top-Line Metrics
Building a Customized Stack
When it comes to digital tools, Kafene develops many of its revenue- and margin-driven projects internally, while it externalizes a lot of institutional services like payment processing to vendors.
There are so many interesting, efficient and efficiently-priced products available from vendors that the company has been able to pick and choose the ones that work well for it, putting them together to build a customized stack.
“That has worked well for us, and I think will help us scale quite a bit,” Jeon said.
In the current macroeconomic environment, Kafene is remaining dynamic and assessing customers in 10 different tiers, while many of its competitors are very rigid and do so in only three tiers. During hard times like these, many consumers who are on the cusp of near-prime and prime fall into the LTO customer set because banks will cut back.
“So, the customers who are fundamentally good payers, good customers, good behaviors will fall into our customer set,” Jeon said, “and we would love to provide financing to them and help them get back on their feet, so to speak, because they have a good history behind them that the system needs to help them get back on their feet — and we’re there to do that for them.”
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