The TransferWise story
“There must be a better way.”
It’s the thought that’s launched a thousand startups, and central to the ethos of every disruptor.
With TransferWise, this frustration was targeted at money transfer, and the whopping fees that banks charge for what, in the new millennium, is essentially just moving electrons around. So, two Estonians living in London – Kristo Kaarman and Taavet Hinrikus – set out to change that.
The lightbulb moment came when they realised they didn’t actually need to transfer money at all. One was being paid in euros, but needed pounds for life in London. The other was being paid in pounds, but needed euros to pay a mortgage in Estonia.
So, instead of using a bank to transfer money and being charged either a high fee or high exchange rate, they helped each other out. They googled the real exchange rate, and paid into each other’s accounts – one paid pounds into the other’s British account, while the other paid euros into his friend’s European account.
And this is what TransferWise does on a massive scale.
Of course, it helped that these two were better placed than most to make this dream a reality. Taavet was the first ever employee at Skype (which, if you didn’t know, was developed by Estonians and still has 44% of its employees in Estonia), while Kristo’s work as a management consultant meant he’d got a bit of experience with how financial institutions work.
Together, they built a clean, transparent platform that allowed people to send money all over the world for a low fee using the real exchange rate.
TransferWise launched in 2011. Since then, it’s attracted investment from the likes of Sir Richard Branson and PayPal co-founder Peter Thiel, been valued at $5bn, and helped over eight million companies and businesses in the last financial year.
Oh, and it’s made a profit four years in a row, which is not something you can say about too many fintech startups.
via https://www.AiUpNow.com
October 25, 2020 at 08:16PM by Alec Hawley, Khareem Sudlow
