Global ‘trader’ currency

Until six years ago, to Taavet Hinrikus was known as the “preliminary employee of Skype”. It was the first application of video calls over the Internet contract, so he had the opportunity to see the birth and grow the most famous company advanced who gave his country, Estonia. Skype quickly expanded into a unicorn, a technology company valued at more than 1,000 million. But now, Hinrikus has a new label in the City of London: the founder of Transferwise, your own unicorn, valued at 1.100 million.

Transferwise is an application (application) that allows card payments or transfers between accounts of different currencies. Its main advantage is price. Charges a fee of 0.5% per transaction, a percentage slightly second rate that most banks set. But as these require that fees be fixed with minimum that can reach 40 euros, in signing Hinrikus this minimum is two euros. In addition, Transferwise makes currency exchange interbank rate, which banks use to negotiate between them, which is always more advantageous than that imposed on customers.

According to the company, your service can help users save up to an eight times what they would pay for performing the same operation through a bank. The trick is that, actually, the money does not cross any borders. Suppose in New York feed someone who wants to change dollars to send euros to Valencia and Barcelona feed else who wants to transform their euros into dollars to make a transfer to Los Angeles. Transferwise dollars New York uses user to disburse to Los Angeles. In turn, uses the Catalans euros to pay the Valencian recipient.

The operation usually lasts standard hours or days if done on holidays or weekends. With this system cuts costs and, after six years of operation, just prove profitable: the company says that this monetary year is making profits and generating liquidity for the first time. The company entered 27.8 million pounds in the year ended March 2016. The accounts to the blade of monetary year 2017 have not yet been submitted, but analysts’ estimates are around 100 million, as the firm he reported a few months ago that his monthly bill had reached eight million euros.

individual experience

“Success is a lot like where we are right now,” says Hinrikus a bistro in London. Transferwise history is well known British capital, where he is celebrated as one of the most successful startup areas. Hinrikus worked in the UK, but Skype would pay the salary in euros, so losing money each month with the exchange rate and what he calls the “hidden fees” imposed by banks on international transfers between different currencies. To his friend and compatriot Kristo Käärmann he was wrong otherwise. Deloitte received his salary in pounds and euros needed to pay off your mortgage in Estonia.

An associate both came up and create Fintech which currently employs 700 people and has grossed more than $ 100 million from investors including PayPal co-founder Max Lechvyn, and IA Ventures investment fund. “It is now more common for people to live a life worldwide. He moved an another country for work, for love, for education and even for a lifestyle, “explains the manager that his service has more than one million users making transfers totaling more than 870 million euros each month.

These payments come and go in over 750 routes and shipped in 20 currencies, but can be received in an add up to 40, among which are the Mexican peso and the Peruvian nuevo sol. This year they hope to add the Argentine peso. No ban, the heart of the business is in the UK, where the company already has 10% of market share. And this is where Spanish users have an important place. “Spain is an important country for us. Transactions from UK to the mainland have become one of our main routes. Roughage a strong connection with Britain, but also in Latin America, “says Hinrikus.

Ongoing projects

The entrepreneur is a critic and an Brexit ensures that if you were to establish Transferwise today, I would not in London. It has therefore decided to separate the British business from the rest of Europe. Currently, he is in search of an office within the European Union for the latter.

Meanwhile, Transferwise continues to expand. Last year launched an service companies, which Hinrikus believes that in the future will exceed the individual, and recently launched its borderless own (without borders). This will allow users to take one account balances in up to 15 currencies. Transferwise account numbers will be assigned in accordance with emission countries to operate them as if done with the account of a nearby bank. In return, the user pays a commission when you make a transfer that does not involve currency exchange. Other operations and maintenance free child. A service that, for Hinrikus, mark a stakes and after for Transferwise. For now, it is only available to companies and freelancers,

DIGITAL VALUE

The division of Fintech experiencing a blast that triggered the investment by 177% in just three years. In 2016, we invested 17,355 million dollars (15.2 million euros) in such new businesses worldwide compared to 2013 6.252 million (5.5 million euros), according to data from the association British Fintech, Innovate Finance. The number of transactions fell by 11.2% but were more substantial investments. China garnered 7,700 million leaving an US in second place with 6.200 million. Although not all investors share this enthusiasm for these companies that claim to be reinventing the bench.

The general executive of the investment fund Mangrove Capital, Mark Tluszcz, is one of the most critical: “The Fintech are doomed to be small businesses. It will lose a lot of money because they will not be able to build great companies. ” Tluszcz, whose firm is based in Luxembourg, believes that the only revolutions that has lived the part in recent years have PayPal and computerized banking and other companies have simply cut costs without contributing nothing new.

“For example, Transferwise have a good product but musical show in a niche [foreign exchange] a part [banking], and when you’re in that position, how much can it grow?” He insists. “For me success comes when you build a big business and you get to exchange or sell it. Among the Fintech not feed success stories, “he concludes. “There will always be skeptics and believers,” argues Hinrikus. “Valen Uber and Airbnb thousands of millions? I do not know. But what are solving big problems? Yes.