Whop raises $205M led by Sequoia with Shopify Ventures — CEO says AI business training is now its fastest-growing category

Speaker 2: Our next guest is returning to the show. Steven Schwartz from WAP, co founder and CEO. Been on the show several times. Always a good time. It's some fresh fun. He's back. How are doing, Steven? Good to see you again.

Speaker 9: Yo. What up, Jordy? What up, John? How are you guys?

Speaker 2: What's the latest?

Speaker 1: What's up, dude?

Speaker 2: Give us some numbers. Jordy's got two gong mallets for you.

Speaker 1: He wants to hit that guy.

Speaker 2: How much you raised?

Speaker 9: A little over 205,000,000.

Speaker 2: 205.

Speaker 1: I almost took it off the hinge.

Speaker 2: Congratulations. Sequoia and Shopify Ventures, What a great combination of strategic plus tier one venture capital firm. What is the... Is Yeah.

Speaker 1: Your your haters are in absolute shamble. So seeing that seeing that aspect.

Speaker 2: Do you see the Shopify partnership evolving in some material way? Or is it just a meeting of the minds, you hit it off with Toby Litke or someone else over there, and it was a purely capital partner?

Speaker 9: I think that the spirit of this round of funding was really to surround ourselves with people that are going to level us up. And, I mean, Cameron and I met when we were so young, and we grew up literally building business on Shopify day in and day out. And what Toby and the rest of the Shopify team have created is is truly a work of magic. And I think people have a habit of underestimating small business, and they sure know not to do that. Oh, And I have a lot of high hopes for our partnership with Shopify. Know, Toby's a world class programmer. Their site and platform are built in Ruby on Rails, same as us. We have a lot of commonalities, and I think it's definitely only the beginning and we look at them far far beyond just capital.

Speaker 2: Amazing. Very good.

Speaker 1: Yeah. Shopify is really incredible in that it's hard to know... It's hard for a company to be at that scale and have so few detractors. Like Yeah. There's like... On the merchant side, people are like... Every every now and then there there would be some like mild issue. Right? Like an outage. But it's like they have the highest uptime of any Huge NPS. Yeah. Like the NPS is crazy. And then on the on the consumer side, it's just like amazing. No one wants to go back to the Internet before. And and and they've been able to deliver a, you know, Shopify like... Or sorry, a... An Amazon like experience without any of the things that people don't like about Amazon. And I think it's incredible and definitely, you know, having them in your corner is fantastic.

Speaker 9: Completely agree. Yeah. I I mean, you look at the the amount of of small businesses that they service today, many, many, many millions per month. And I think whole world is still underestimating how many more small businesses will be in the future. Even at a few million a month, it's actually not that many. There should really be billions of businesses each month. And these are not not just tiny businesses, and Shopify has so many examples of, you know, Gymshark, you know, random drop shipping brands that they grow to billions and billions of revenue. Skims doing billions and billions of revenue. And I think I think that they they view our platform very very similar in that the the winners can really, really grow and scale on the platform. But, obviously, we serve slightly different types of businesses. So For

Speaker 2: sure.

Speaker 9: Yeah. I'm very very excited about about getting to work with Toby and the rest of the of the team. They're fantastic.

Speaker 2: What are some of the new categories that are growing quickly on WAP? Like What's

Speaker 1: the new meta?

Speaker 2: What's the new meta?

Speaker 9: Yeah. Well, we're actually working on this trends page right now, and it's been really crazy to look at. We're really trying to drive the specificity home specificity home of all these different micro markets. So when we first launched, it was literally just sneaker bots. I think that everyone was kind of like, okay, well, that's that's a tiny market, really niche. I don't even really know what it does. But when you start to stack all these micro markets up, it becomes really, really, really big. And when we when we started to get our classification upgraded, we're we're seeing explosive growth in home services businesses like plumbing and roofing and pool cleaning. There's kids in Oregon that have home renovation and kitchen renovation businesses. We're seeing like emergency tree removal businesses in Canada in highly populated forest areas. We're seeing a lot of fraternities and sororities start to use WAP. We're seeing people sell backyard greenhouses on the platform. We have really fast growing platforms for truckers, you know, like Bill Pay and ARAP platforms. We obviously have a ton of UGC growth. There's some really large people, not large people, really notable people that are launching marketplaces around UGC craze still. And I... Yeah. I mean, you know, I think the fastest growing category right now is actually AI business training for small businesses. So they'll go in to different businesses and help teach how to do automations, how to get the best AI stack, and so on, and that is in incredibly high demand. But, again, I think a lot of these markets deserve to be a 100 x bigger. I think that that road ahead of us is pretty obvious on how we can 100 x each of these micro markets, which collectively kind of brings the whole platform to another another territory.

Speaker 2: No. A lot of people laughed at Charleston AI. We took it seriously. We, you know, we had a fun interview with the founder, but we recognized that this was like a real business and it seems like it's spreading far beyond that one viral clip of the gentleman showing how he set up a physical store where you could go and get AI training. It's happening on WAP as well. What What does top of funnel look like for when some of these new capabilities, new markets pop up? Like, I'm thinking about, like, tree removal. That's great that someone could come on board and say, I'm willing to remove a tree in a remote part of Canada, but how are they finding their customers? Are they doing the promotion and then the transaction happens on WAP? Or are you doing marketing to brand WAP as a place where someone could go for all sorts of home services? Like, how the customer finding that talent?

Speaker 9: Yeah. So, I mean, our mission is to deliver everyone a sustainable income. So I think one way to look at our platform is to take all these markets that have traditionally been a little bit more concentrated on the big guys getting all the business. And then maybe the big guys would go and delegate out and find some contractor to go and actually perform the treat removal services. But what... I think the promise of the Internet allows for is really to decentralize all that power. And we try to think about making each of these markets very open and very efficient. And what that looks like is bringing scale economies for not just payments, but also advertising to people like these tree removal services. And when you give them the power of Nike that they have an advertising product that Nike would use, and you give it to a guy cleaning cars in Kansas, and he was making a $150 a week Yeah. It gets pretty pretty nuts. And that's the type of thing that people are using WAP for today. And you can look at the services we provide. Really, we're selling more efficient, better payments, and more efficient, better advertising.

Speaker 2: Got it.

Speaker 9: And, we wrap all that up, and embed it into our home screen, and tell businesses what they should do next. And say, alright, you're just starting out. Halloween's coming up. Maybe run a sale for Halloween. Maybe get some ads launched for Halloween.

Speaker 2: Yeah.

Speaker 9: And and yeah. So so maybe... I hope that answers your question.

Speaker 2: No. It totally does. It's so interesting that you can come to WAP with a product, service, anything. And then you're not just the e commerce platform, you're also going to connect them with marketers, help them. It could be they hire a clipper on there or someone to run digital ads. Like, it's the full stack solution for like a solo preneur kind of in any type of business. That's incredible. Yeah. It totally...

Speaker 1: Are you are you already distributing through neo banks and and different like consumer finance platforms? Because consumer finance historically was like, hey, here's here's the here's your net worth or here's the here's a checking account. But nothing in these apps helps you really make the number go up. You have to go elsewhere to do that. I feel like WAP is like the number go up platform for like a generation of of new entrepreneurs. And that feels like a place where somebody's like looking at their bank account. They might not be happy about it if they want to do something about it. That's like an interesting moment.

Speaker 9: Our mission is definitely not to save you money. It's definitely to make you money. And we we... You know, businesses on our platform, they grow an average of 300% in... After the first year. And that is much... Very much our goal. We we deal we try not to deal in any anything less than a 100 bips of growth for businesses on the platform. And, yeah, I think we... We're not... We're probably... There's a lot of low hanging fruit for distribution in other apps. We we have not... We have we have 10,000 people trying to make businesses... Creating businesses each day, and many, many, many more tens of thousands of users signing up to buy things. So we have our our hands full with our existing customers before... And then we turn on some more pipes for for for extended distribution. So not quite yet, but the the neobank stuff is pretty pretty fascinating. I think, again, like, our our goal is to to bring a lot of competition to traditionally very difficult to enter markets. And we have a crazy cool stablecoin infrastructure that allows people to to do things that they previously haven't really been able to do from a fintech stack standpoint. So, yeah, we're we're really excited about all that.

Speaker 1: Yeah. It was funny. When I was starting my entrepreneurial journey, I always thought it was funny that, like, my business didn't have a home. Like, if you weren't building an ecommerce store, like, and you could just go to... Like, Shopify is the home for your business.

Speaker 2: Sure. Sure.

Speaker 1: Sure. Like, that is, like, that's where your business is happening. But for so many other types of businesses, it's like what is your business? Your email? Or your website?

Speaker 2: Is it

Speaker 1: your bank account? Is it Stripe Atlas or LegalZoom? It's like totally homeless. Totally. Right? It's just like Yeah. Sitting across all these different service areas. Yeah. And it feels like just... It's like very very obvious Oh. Now. But like, WAP being just the home for your business

Speaker 2: Yeah.

Speaker 1: If it's like anything beyond eke like the the the sort of Shopify, you know, SMB to enterprise Yep. It's gonna intuitively make so much sense for the younger generation that's like, yeah, my company like should have a home. It should be like one place that I go and it connects to these other services and it gives me that. Like I think the thing that's really powerful is there's so many people that wanna start a business. They maybe have a idea, maybe that idea evolves. But they don't have someone in their life that's telling them like the next thing to do. And if you just scale up that like we're telling you the next thing to do on your journey and it's like, okay, now it's time to do advertising and then helping them do the next step. I think that Mhmm. It can start to snowball into these, you know, once somebody's snowballing and they're like, they make their first dollar and then they make their second sale or whatever it is, it it can snowball and then people figure it out over time. But, you know, having that home and then and then that sort of guidance I think is gonna be super powerful. And, yeah, it's gonna be it's gonna be a golden era. Ken Griffin this week called it the golden...

Speaker 2: You did?

Speaker 1: It's going be a new golden era for entrepreneurship. Not talking about WAP. I

Speaker 2: thought he was like so blackmailed on everything saying like it's a bubble and stuff most recently.

Speaker 1: No. No. Were pulling out the super bearish headlines, but the overall take was like it's going to be a period of intense disruption. Cool. He's like every major transformation has come with some some sort of bubble. Love it. But ultimately he said it'd be a golden era for entrepreneurship and was really pushing this like it's a weird time to be white collar worker, it's a weird time to be a big corporate Yep. But it's a great time to be on WAP.

Speaker 2: That's what he said. No.

Speaker 1: He just said he just said it's a great time to like, you know, lean in and learn and learn these markets.

Speaker 2: Yeah. Be adaptable, flexible.

Speaker 1: Yeah. When you're an individual or just a couple people, it's like you have ultimate flexibility. You can literally do anything. You're not dealing with the baggage of like how do we adapt to this new paradigm.

Speaker 2: Yeah. I have one last question. Have you ever gotten a root canal without Novocaine?

Speaker 9: We were we were gonna plan on doing that before our next board meeting. We have it... That's the that's the plan of attack. Okay. I'll I'll let you know how it goes once

Speaker 1: Why not do the board meeting while getting a root canal without Novocaine? You gotta do it Why you need... You're so busy, dude. You need to combine all this into one meeting.

Speaker 2: Yeah. What what what is what is the the the story with Doug Leone from Sequoia, your relationship with him, how you met? Take us through sort of the journey because, I mean, what a legend to have on the board. Novocaine aside, obviously, one of the greatest investors all time and a real testament to the quality of the business that he would join.

Speaker 9: Yeah. So I think we've been really lucky to have some awesome investors supporting us since we began. And I think that the story of this financing was that we we really wanted to to to learn from someone who who we like to spend a lot of time with. And we've gotten to know the Sequoia crew over the last few years and have real... Seriously nothing but amazing things to say about the entire team. They're they're nothing short of brilliant. And Justin Matine introduced us to Doug, and Doug actually said... He's like, we can't meet. We we already passed on this, and and we're not really interested. Too many detractors in in the in the market. And we we hashed it out a little bit, and I think it became pretty obvious that the market we we service is one of the largest markets in the world, and and should likely be one of the last to to be commoditized by anything related to AI. And we hit it off with Doug. I think Doug is one of the most authentic, humble people that I've met in this world. And that's having the the track record that he has, and I think we we really, really enjoyed speaking with him. And I think a lot of people in in the in Venture and Valley are are much more consensus thinkers, and and he is certainly an original thinker and not afraid to be blunt, which we really appreciate. So I think we kinda just... We hit it off and we're... Could not be more excited to be in business with with he and the rest of the Sequoia team.

Speaker 2: Well, congratulations. Really cool progress milestone. It's fantastic. I mean, what what a what an amazing journey you've been on and it's awesome to see another another win. Job's not finished, but really, really amazing progress.

Speaker 1: Yeah. Great stuff, dude.

Speaker 2: Thank you so much for Great coming on the

Speaker 1: to see you. Thank you, Jordan.

Speaker 2: We'll talk to soon.

Speaker 1: Talk soon. See you, man.

Speaker 2: Goodbye. Let me tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real time experiences and new value with Cisco. Can I can I can I read this article from the Wall Street Journal Mansion section, Jordy?