Twin sisters from Hawaii are building Staax, 'Venmo meets Robinhood'
Mahalo for your patience as I took a break this month. My wife's 'Celebration of Life' was a wonderful gathering of family and friends, and we met our $35,000 scholarship fundraising goal just as the evening wrapped up! I'm forever grateful. Now, let's get back to the stories.
Lucy and Victoria Yang grew up in the very rural district of Kaʻū on the south side of Hawaii Island. Today, they're leading a San Francisco fintech startup that's already raised $1.8 million, building a first-of-its-kind social investment payments platform.
The company and its app is called Staax, which was only a prototype last May and is now in closed beta. The pitch? "We make investing as easy as receiving payments from your friends."
I heard about Staax and its Hawaii roots from Johnny Chankhamany of Builders VC, but he knew the Yang sisters not as an investor, but as a mentor with the non-profit AKAMAI Finance Academy program, where he worked with them while they were students at McKinley High School.
I was eager to learn how these young women grew up in Hawaii, learned about investment banking in high school, and ended up combining investing with entrepreneurship to build Staax.
The Staax pitch
Today, the Staax team is led by CEO and co-founder Nikki Varansi (a former finance and private equity professional), with fellow co-founder Lucy Yang serving as Chief Operating Officer and Victoria Yang in the role of Chief Technology Officer.
"Staax is a peer-to-peer payment system that lets you pay your friends back in shares of stock," Lucy Yang explains. "Think of Venmo means Robinhood. You basically can send your friends shares of stock in any stock you like."
"As young people, we often have a lot of balance sitting in our Venmo accounts that could instead be growing as you're spending money every day," Victoria Yang notes.
"So we basically wanted Staax to be a passive way for people to invest, similar to Acorns, where reinvest your cents without thinking about it, passively investing your small bits of money on a frequent basis," Lucy Yang continues.
"You can either pump all your money into the stock portfolio once or twice a year, or every time you make your paycheck," she says. "Or you can do small, incremental investments when you're spending money, like getting coffee, or drinks, or boba."
The vision, they say, was to make investing easy, consistent, and passive.
"It's for any person who has difficulties thinking about investing, thinking they need to be making a lot of money to invest," Lucy Yang says. "You really don't need to, you can invest with as little as $1, so it's a low friction way for anyone to get started."
The website quips, "Get paid in TSLA for groceries!" But isn't a single Tesla stock worth $284?
"It's all fractional, and every payment is going be dependent on how much you spend, like $5 for coffee, or boba," Victoria Yang replies. "That's $5 worth of whatever stock you want—everything is fractional, and that's a big value proposition for our users."
From Kaʻū to Kailua to college
The Yang sisters, twins, are now 25. They were born in China, but came to Hawaii when they were seven years old.
"We grew up in Kaʻū, on the Big Island, but we were both very interested in finance and thought that we would pursue that in high school—something in business or finance," Victoria Yang recalls. "We heard about this really great program called AKAMAI, and we wanted to participate, but at first we were on a different island."
But during their junior year, their family moved to O‘ahu, and enrolled them at McKinley High School in Honolulu.
"It was a family decision," Lucy Yang says. "I think we would have excelled at any university, any school, but it's more about what you want to do."
"Going to McKinley helped us decide that we wanted to move away for college, as we saw other students do the same thing," she continues. "It made us realize that there are more opportunities out there."
The move also allowed them to participate in the AKAMAI program.
"There were a few also students from McKinley who participated in the program, though some of the other people in the program were seniors or in college — we were definitely one of the younger folks," Victoria Yang recalls.
Every Saturday, they would head over the mountains to Kailua and spend the day learning about finance.
"It was a very intensive program, and we learned a lot of things that you don't really get to learn in school," she says. "I think that's that's what sparked our interest in finance, the exposure to what it was like to work in the finance industry."
When they graduated from McKinley, they both headed to the continent for college. And that was no small feat.
"We're both first generation college students, so we didn't have the traditional family that had the experience going to college, or having a higher education, or even having a career in any bigger industry," Lucy Yang noted. "It has always been minimum wage paying jobs."
She said she and her sister participated in many programs that catered to anyone who wanted to pursue a higher education but didn't have the necessary background to it.
"We had a lot of mentors and people who really supported us throughout our career, and obviously, Johnny was one of them," she says.
Lucy landed in Washington, D.C., studying business administration, finance, and IT at American University. Victoria went to Northeastern in Boston, studying business administration and computer science.
"Right out of college, I went to work at Goldman Sachs at an investment bank in New York, doing securities and portfolio management work, and I enjoyed it," Lucy Yang says. "But I think you kind of get tired of the grunt work."
"I went into business finance and accounting in college, specifically because that's where I left off in high school," Victoria Yang recalls. "But my first year, I took a elective computer science class, and that was my first time getting exposed to technology."
She want from not even knowing computer science was a career to enjoying her software engineering classes. When it was time to incorporate internships into her education, she applied to tech companies.
"I worked at various companies from Workday, which is a HR software company, to Coinbase, the cryptocurrency company, and and I got really excited about the tech space and the opportunities out there."
Then the pandemic hit.
"Since college, we were very interested in starting something, and the pandemic sped that up," Victoria Yang says. "We wanted to do something quick, do something fast, start something and take that risk to build something."
The pair started a number of projects, experimenting to see what would stick.
"When Lucy was working but I was still finishing up school, I would we tried like five or six different ideas in so many different industries, like beauty, fintech, food, so many different things," Victoria Yang recalls. "The farthest we got at that point was getting an interview with Y Combinator, and we made the final round, but we didn't make it."
"That's pretty much where our Staax journey began," Lucy Yang says.
"The thing about relationships is that you just never know when someone is going to have an impact on your future or whatever you're working on," Lucy Yang says.
A few years ago, she was flown out to New York to interview at Goldman Sachs. She was one of the last two candidates to finish, and when it was time to head home, she found her phone had died. She asked the other candidate to help her book a ride to the airport.
That other candidate was Nikki Varansi.
"We stayed in touch ever since then, since we were both in New York, and she knew I had some sort of interest in tech, because she was interested in tech as well," Lucy Yang says. "We started having conversations around last year about what kind of tech companies we were thinking about building."
From those conversations, Staax was born.
"Last year, around February or March, is when our team formed — this is me, Lucy, Nikki, the three of us — and came together to work on Staax together," Victoria Yang said.
The challenge? Fundraising.
"We’re like two, three years out of college, we don't have that much work experience, we don't don't know any VCs personally," she recalls. "So we did a lot of cold calling, trying to reach out to investors on LinkedIn or by email, and got a lot of rejections."
In May, the TechStars accelerator program invited them to pitch.
"We definitely didn't feel too confident about it, we didn't think we did really well," she says. "Looking back at that pitch now, we're like, 'How do we make it this far?'"
Which is to say, they made the cut.
"The managing director of that program selected us out of a lot of candidates—we were one of ten teams out of like 600 or 700 applicants," Lucy Yang says. "Sometimes it takes that one person to believe in you, believe in the team."
"The other founders have exited multiple times, they've done other companies, they're successful, they have a product that's making them revenue—and we were very young, I think the youngest founders in a long time," she adds.
"Yeah, we're the youngest," Victoria confirms. "And we don't have a product, we're still in prototype, we're really just an idea, and it's really hard to sell an idea, especially if you don't have traction numbers, which is what investors want to see."
Nonetheless, TechStars took a chance on them, and they made the most of it.
"It was such a good experience," Lucy Yang says. "We learned a lot because we were able to learn from other founders who've done all this before, and we spoke to so many investors and mentors, just a lot of people in this industry who have this experience to help us."
When Demo Day came around in October, bolstered by fundraising facilitated by TechStars, they started a VC round.
"Just a month after that, we actually got one of our big lead investors, and that really helped the domino effect," Victoria Yang says. "When one investor was willing to put money into us, we basically had other investors that were also interested."
While Staax pitches are still sometimes rejected, their modest success has allowed the team to be a little picky themselves.
"Now we are more able to reject other companies, especially if it doesn't match up with what we want," she says.
They've raised $1.8 million to date, which is actually more than they planned for.
"An oversubscribed round is probably better than undersubscribed," Victoria Yang notes.
Still , the sisters are realistic about their chances of success, and also how unusual their experience has been.
"In the fintech space, of all the money that's been raised, only 2% of that money is being raised by female founders," Lucy Yang says. "That's insane, and shows how challenging it is for us to try to be in this space."
Do they have any advice to other would-be founders?
"Just don't give up," Lucy Yang says.
"Hearing so many nos, having so many rejections, disheartens people, and it's easier to go back to a 9-to-5 job, it's really easy to find a company to work for," she continues. "It's important to have the mentality that to keep going no matter what, no matter how hard it gets, no matter what people say."
"Growing up part of an immigrant family, there's no one that pushed us to do the things we did—it was really a personal motivation," Victoria Yang says. "We had to go for it and get it ourselves."
It's important to be aware of opportunities, she notes, including opportunities to change and pivot.
"If you keep your mind open, and you're always willing to try different things, you will basically get all these opportunities in your life, and you have to make sure you go for it," she says.
"Nothing will be handed down to you," Lucy Yang adds.
The Staax team, including its summer marketing interns.
If all goes well—which is uncommon for a startup—the Staax app could launch before the end of the summer.
"Since we were a part of the accelerator program, we've been building out the prototype of the product, and we did some redesigns," Victoria Yang says. "Now we're doing our beta, we're on our second beta, and we'll have a final beta before we launch to the public."
In the mean time, after doing some traveling, Lucy and Victoria Yang are returning to Hawaii.
"It's home for us, and we still have family and friends here, it's just that COVID brought us back," Lucy Yang says.
This was not always a foregone conclusion, however.
"Our company is mostly technical and we can be anywhere in the world, and Hawaii is a little more challenging with the time zone differences and all that," she says. "But in terms of community and giving back, with what we've accomplished through the mentors and people we've met, there's so much more to go."
"It's where we started, and that's very important, and I feel like you don't hear that often until someone becomes very successful," Victoria Yang continues. "Being from Hawaii, even the limited opportunities and education we faced, is what pushed us to get where we are."
Even as they ponder how to contribute to the local community, the Yang sisters are quick to point out that they're just getting started.
"I don't think we've made it yet, so I feel like 'giving back' back doesn’t sound quite right," Victoria Yang says. "But we definitely feel like there's more opportunities for us to help the people like the community that we grew up in, because it's important to us."
"Maybe we can help more youth pursue careers in technology, or pursue careers in entrepreneurship, going around tp schools in Hawaii to teach students about what it means to be an entrepreneur," Lucy Yang adds. "I think that would be amazing."
To learn more about Staax, and to join the wait list to try the app, visit StaaxApp.com.