How We Bootstrapped Zūm Rails from $0 to Seven Figures in ARR

How Zum Rails was bootstrapped from $0 to seven figures

Zūm Rails competes in a highly competitive, highly regulated industry. But in just five years, co-founders Miles Schwartz and Marc Milewski have grown the business to $10 million in ARR, initially without help from investors. In this interview, Miles shares how Zūm Rails has grown one client at a time.

👇 Key Takeaways

  • Zūm Rails merges open banking with instant payments
  • Miles pitched the idea to his former employer, but they weren’t ready to venture into payments
  • Zūm Rails can replace as many as seven different service providers
  • Miles and Marc bootstrapped until they became profitable because they couldn’t find investors
  • Outside perception of Zūm Rails changed when Miles posted on LinkedIn about going from $0 to seven figures in ARR


Business Name: Zūm Rails
Website URL:
Founders: Miles Schwartz & Marc Milewski
Business Location: United States and Canada
Year Started: 2019
Number of Employees/Contractors/Freelancers: 40

How much revenue and profit does the business generate?

We generate over $10 million in annual recurring revenue (ARR)

Tell us about yourself and your business.

I’ve spent the majority of my career in the startup world, so entrepreneurship is a mindset that’s been ingrained in me from the start. It wasn’t until my most recent role with Flinks, a Canadian fintech company, that I realized I was ready to consider going fully out on my own, though.  

As an original employee at Flinks, I was responsible for building the company’s sales pipeline from the ground up as we worked to solve data aggregation challenges for banks and other finance companies. But as we grew and I got deeper into the finance industry, I started noticing much bigger market challenges that fintech companies simply hadn’t yet solved. 

Zūm Rails was created from the motivation to solve those problems. I had originally presented the idea of merging open banking—which improves data management and insights—with instant payments to Flinks as a way for the company to address more than one of the businesses’ problems in one place. But they weren’t ready to venture into payments at the time, which is when I made a call to an old colleague and payments industry veteran Marc Milewski—who’s now my co-founder.

We got to work almost immediately building the technology that could power these two capabilities in one place at a time when most companies were either still thinking about them separately or not at all. This was in 2019, and Zūm Rails was born shortly thereafter.

Zum website

How does your business make money?

Zūm Rails provides the technology that businesses and merchants need to power customer payments. We currently work with close to 500 clients, including Deloitte, Questrade, Fairstone, Shakepay, and Desjardins, the largest federation of credit unions in North America.

When companies think of processing payments, a few things usually come to mind. The first is that they need to bring on a bank or a financial institution to handle their incoming payments, outgoing payments, or both. The second is that making or receiving a payment is simply a process of moving money from one point to another. But there’s a lot more that goes into it than that, including things like collecting the customer’s personal and financial information, ensuring that they have enough money in their account to complete the payment, and implementing security protocols to make sure they are who they say they are. 

Zūm Rails not only enables companies to complete all of these steps from a single platform but also allows them to power payments themselves through their own customer interface. Meanwhile, we handle the backend processes with financial providers like Visa and Mastercard to actually move the money where it needs to go. 

In addition to our client-facing offerings, these financial partners are also a key part of our business model and have played a big role in enabling us to expand our market awareness and sales channels. We developed a partner portal that opens Zūm Rails’ technology up to both traditional finance companies and financial technology companies, including Visa Direct for real-time payments and MX for open banking-powered data management.

What was your inspiration for starting the business?

When we founded Zūm Rails, we noticed that funds were beginning to move faster and faster. However, the faster funds move, the more you need to adjudicate for risk. Moving money quickly is a small percentage of the payment puzzle, which is why we built software to validate the individual, validate the bank account, and validate the key data points prior to moving the funds in real time to prevent NSFs and chargebacks.

Our goal was to create a platform that merges everything businesses need to create a seamless and secure customer payment experience in one place. Open banking and instant payments were a big part of this at first, but as new capabilities have emerged across the financial landscape, we’ve brought those into the fold as well. Zūm Rails can now replace as many as seven different service providers that companies would otherwise have to work with across the transaction lifecycle.   

How and when did you launch the business?

Marc and I launched Zūm Rails in 2019, sitting around my parents’ kitchen table. We had every intention of fundraising while we got our feet under us and were under the impression that it would be fairly easy to attract investors based on our prior track records scaling successful fintech companies. 

We were wrong. 

We never intended on bootstrapping, but after pitching investors for months and hearing a lot of the same feedback around why we were trying to solve too large and complicated of a problem, and the high barriers to entry in the payments space, the decision was more or less made for us. While these investors weren’t wrong about the challenges we were up against, those dynamics are what ultimately motivated us to move forward no matter what, and by any means necessary. 

Miles Schwartz speaking
Photo courtesy of Miles Schwartz

How is the business funded? 

We self-funded Zūm Rails’ entire journey from bootstrapping to profitability.  

There’s a lot of glamorization around bootstrapping for companies that turn out successful, but Marc and I will be the first to say that it was extremely difficult the majority of the time. However, it was during that time that we hired our first employees, opened our first offices in Canada and the U.S., and got through the typical growing pains that many startups face to meet our initial business goals. 

We’ve always had ambitious plans to continue growing our platform’s capabilities, building and acquiring new technology, and expanding our market share beyond what we originally set out to do four years ago. That’s led to somewhat of a full-circle moment with fundraising but with a much different outcome. With a foundation built on profitability, a growing client base, and major enterprise partners underneath us, we announced our $10.5M Series A funding round led by Arthur Ventures in February 2024 to further our work towards these goals. 

How did you find your first few clients or customers?

Since both Marc and I have been in the fintech space for years, we were able to leverage our existing relationships to develop our initial client list and onboard them pretty much immediately after launching Zūm Rails. However, we always knew that our platform had the potential to solve even bigger payments and banking challenges than the ones we started out addressing. We just needed to demonstrate how we could do that to companies in the investing, lending, banking, and real estate space that hadn’t heard of Zūm Rails before.

Signing our first enterprise client came down to our ability to execute on extremely niche challenges that no other payments or fintech companies were addressing. We’ve built trust with our clients by listening and understanding their biggest pain points and then developing technology—whether it’s a modification to something we already offer or something that’s never existed before—to take those pain points away.

What was your first year in business like?

Our first year was transformative both for our technology and the company as a whole. We spent a lot of our time gathering feedback from initial clients and from the larger market about the biggest challenges in moving money quickly and securely. This included taking note of how regulators and government bodies were approaching the standardization of open banking and instant payments—and then ultimately making the decision to move forward regardless when they hadn’t made any progress. 

As first-time founders, Marc and I were also focused on building a strong foundation underneath us in that first year, and figuring out where we would eventually need to hire key talent and add resources to support our growth. I think many founders are familiar with the feeling of wearing multiple different hats and handling just about everything from sales to marketing to HR in those early days, which is pretty much exactly what Marc and I experienced.

What strategies did you use to grow the business?

We went to some pretty unconventional measures that, to this day, are what I attribute a big part of our early growth to. 

When we were bootstrapped, we allocated hardly any budget to marketing, which meant finding organic means to build brand awareness and generate leads to feed our sales pipeline. I took advantage of LinkedIn and started posting about my journey as a bootstrapped tech founder. Many of the stories centered around how we scaled Zūm Rails from zero to seven figures in recurring revenue—and several went viral.

That’s when the optics around Zūm changed, and we were seen as a stable and growing company, rather than a shaky startup. This strategy led to inbound lead generation, developing initial connections with some of our biggest customers, and even finding our eventual investor, Arthur Ventures. 

Building our business model around our partner portal has also been a significant contributor to our growth. It has brought Zūm into the same networks as major financial players, including Visa, Mastercard, MX, and Fiserv. By enabling these companies to offer Zūm’s payment capabilities to their clients, we can have hundreds of businesses on our platform from a single partnership. 

What was the biggest challenge you had to overcome?

Attracting enterprise-level attention as a startup that’s been around for barely a fraction of the time that most of our initial target clients were was one of the first and biggest challenges we faced. Since we had just launched, we had limited client success stories and testimonials to validate us, especially within the enterprise space. This challenge was compounded by the fact that Zūm Rails and the majority of our clients operate in the highly regulated financial services industry, where compliance and trust are critical to every customer and partner interaction. 

Overcoming this came down to demonstrating prospects that we could deliver on the capabilities that we said we could, and then leveraging each resulting success story to scale our growth even further.

Hiring as an early-stage startup was also a challenge, especially with C-suite positions such as finding a Chief Technology Officer (CTO) to continue adding new solutions to our platform. I had previously worked with Marcel Ferreira in another role, and he reached out to me as we were looking for a CTO. The timing worked out perfectly, and we brought on Marcel to build and implement new capabilities that we needed to help our clients keep up with evolving market demands. Within six months of Marcel’s onboarding, we hit seven figures in annual recurring revenue.

What have been the most significant keys to your business’ success?

We’ve always been laser-focused on changing the way companies think about payments. From creating open banking and instant payments capabilities at a time when the industry was still figuring out what that meant to finding ways to work around our initial lack of funding, we’ve faced multiple roadblocks that could have set us back if we weren’t truly passionate about our work. But our dedication to the industry made us push through despite these hardships to become profitable and successful. 

We’ve made it our goal to build any solution that companies need to move money faster, more easily, and more securely—even if it’s a capability that we don’t offer today. This mindset, along with creating our platform to be scalable and agile, is what’s enabled us to adapt and evolve in response to customer and market demands. 

Tell us about your team.

Over the past five years, we’ve grown from two co-founders to over thirty employees. The founding team started with Marc and me, and shortly after founding the company, we brought on Marcel as our CTO.

More recently, we hired Michael Doron as our Vice President of Sales to spearhead our business development with a specific focus on the U.S. 

We’ve also invested significantly in our development and IT teams to continue expanding our technology offerings.

Zum founders
Photo courtesy of Miles Schwartz

What was the turning point when you knew your business was successful?

The day we fully onboarded our first enterprise client was a big one in terms of knowing that we had transcended the fears that were initially flagged to us by investors. We overcame multiple challenges to get to that point, including validating our company and its product capabilities during the sales process—all without institutionally backed funding. From that point on, we felt that we had truly turned the corner and could build on our momentum to continue expanding into new markets and adding to our product offerings.   

What separates your business from your competitors?

Our business model centers around bringing together multiple payment and finance capabilities, where most fintech companies are only focused on one.

This approach eliminates the need for as many as seven different third-party providers that do not speak to one another. And considering that every additional third party that companies integrate with needs its own onboarding timeline, risk management protocols, technology integrations, and more, having everything in a single gateway that only requires one implementation creates a much simpler and more intuitive experience for both our clients and their end users.

What are your future plans for the business?

Right now, we’re focused on responding to increasing demand for new and enhanced payment capabilities in the U.S. market.

In some ways, addressing these demands looks similar to the payment experiences that we’ve already created for Canadian businesses, but the U.S. has its own market challenges as well. For example, instant payments are seeing a much faster rate of adoption in the U.S. than in Canada, due to the recent launch of the new U.S.-specific real-time payment rails known as FedNow.

Our partnerships with financial services companies like Fiserv will continue to be key ways that we scale our presence into additional markets and expand our product offerings as businesses continue to look for new ways to improve the payments experience.

What are some of your favorite books, blogs, podcasts, or YouTube channels?

I was always passionate about learning from successful people who have built successful businesses before and take certain inspiration from each entrepreneur but make it my own. I listen to How I Built This by Guy Raz as well as listen to entrepreneurs such as Naval Ravikant and others for inspiration.

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