Oct 19, 2015 Katja Toropainen
TransferWise was launched in 2011 by Kristo Käärmann and Taavet Hinrikus who were brought together by a common frustration. They were both Estonian expats in London. Every month they lost a significant part of their salaries because of the bank transactions they had to pay to move money between the UK and their home country. Eventually they came up with a solution that turned out to be the idea behind TransferWise.
TransferWise promises to send money abroad at the lowest possible true cost without any hidden fees. How does this actually work? They offer transfers between pounds and euros finding and matching bill payers in both currency areas in need of the other currency. The company achieved rapid success, moving $4.5B across the platform in just a few years and it nowadays supports over 300 currency routes across the world. Kristo tells that their goal is to make the world a bit better by helping to make the financial system fair. “The greatest success is seeing the very real impact our product has on people’s lives. We put €30M of our customers money back in their pockets in the month of September alone”, explains Kristo.
We knew each other before we started the company. I was working in London and being paid in pounds but paying for a mortgage in Estonia in euros. My co-founder, Taavet, had a salary in euros with Skype, but lived in London. This meant that every month we’d give up a significant part of our respective salaries as bank fees. Eventually we came to a solution. Every month, Taavet would put euros in my euro account and I would put pounds in his UK account. We then used the official mid-market exchange rate to avoid paying any bank fees. After realising there were millions of other people that needed a system just like ours, we set up TransferWise.
These days you may only need a website to validate if your product gets traction. In our case, it was slightly more complicated – since moving money is a regulated business, we needed permission from the British Financial Conduct Authority (FCA). So we needed to delve deep into regulatory documents and it meant sacrificing a lot of our free time. In the end, it took us 9 months to get the first license with no external help.
When we launched with a TechCrunch blog post in 2011, the amount of customers that started coming in took us completely by surprise. By the end of the day we already had dozens of people wanting to transfer money and calling us up for support. This overnight success required a quick response, so the same night I went through my phonebook and closed the first hire. On the other hand, having too many customers is probably a challenge every startup would like to have.
The concept of a universal bank cannot really keep up with the product innovation coming from startups challenging different verticals of the traditional banking sector. I’ve written a personal blog post on how banking may look like in the future: http://kaarmann.com/my-own-little-bank/
Bank branches might not disappear overnight, but people expect speed and convenience. 25% of our transactions go through our iOS and Android apps; our customer support is open 22 hours a day; the majority of our transfers are completed in one day. It’s hard for traditional banking to compete with the shift towards digital convenience.
1990s were the time when Estonians had to rebuild the country. This took a lot of entrepreneurial spirit. The generation that grew up in the 1990s saw all of this first hand and inherited the attitude that when something is broken, you’re the best person to fix it yourself. Paired with good technical education and modern infrastructure that had to be built up from scratch during 1990s, it’s brought on a positive feedback loop of innovation coming out of Estonia during the last 10-15 years.
Brian Halligan, the Founder & CEO of Hubspot opened up the Founder stage on Day 2 by telling us what was the word of the year chosen by Dictionary.com – misinformation. There is a huge trust issue between buyers and sellers, which companies need to react to. This is where customer experience comes in. During […]
Justin Rosenstein, the Co-founder of collaboration tool Asana opened the Pink Stage with the useful hands-on advice on building powerful ideas and ‘growing smart’. He also announced the recent Asana’s $50 million Series E round, which catapulted Asana to $1.5 billion valuation. Justin, known as the creator of the Facebook’s “Like” button shared how through […]
Modern Meadow has been pushing the traditional leather industry to the edge by creating biofabricated materials from growing cells into a new type of material inspired by leather. We had an opportunity to have a chat with Andras Forgacs, the co-founder and CEO of Modern Meadow and get a sneak peek into some topics what he […]
Fumiko Kato, CEO of WAmazing, is one of the speakers of Slush Tokyo 2018. WAmazing provides a free network service for the tourists coming to Japan. Since she founded WAmazing in 2016, the highly qualified system has been evaluated and the application has more than 80,000 downloads. Now, the service is opened only to tourists […]
Obvious Ventures was founded three years ago on a simple belief that the most valuable companies of our time will be the ones solving humanity’s biggest problems. Today, Obvious Ventures has invested in more than 40 world positive companies. I got a chance to hit up with their Founding Partner Vishal Vasishth who co-founded Obvious […]
Funding Circle has one mission: to become the world’s leading small business lending platform. Since 2010, they have channeled more than $5 billion to more than 37,000 small businesses around the world. This has created roughly 100,000 new jobs and produced an investor network of 72,000 individuals, companies and institutions. Behind this is CEO Samir […]
Leila Janah is the founder and CEO of Samasource, a self-funding nonprofit, which reduces global poverty by outsourcing digital labor to impoverished places around the world, and LXMI, the organic skincare brand. Both companies were recently highlighted on Fast Company’s Most Innovative Companies list. Leila is one of the Slush 2017 speakers and I had […]
In just two days, the world will descend upon Helsinki. Entrepreneurs, investors, journalists, students, scientists and professionals will come together in Messukeskus, the biggest convention space in Finland, to experience the highly anticipated, full-packed days of Europe’s leading startup event. Who better to prepare us for the action than team captain, CEO Marianne Vikkula? Below, […]
Nokia is heading into the growing VR industry with OZO Live, a software solution that runs on reference hardware and enables the OZO camera to broadcast live VR experiences at scale. Visitors at Slush get to have a glimpse of premium live broadcasting of 3D 360 VR video as well, since selected programs from Black […]
Join the other 70,000 tech heads and subscribe to our newsletter to know about our ticket sales!
We collect cookies to make your experience here smoother.