Careers at TransferWise
TransferWise’s mission is to make the process of moving money from one place to another secure and quick at a minimal cost.
TransferWise was founded by Taavet Hinrikus and Kristo Käärmann, natives of Estonia. The friends were living in London and faced an administrative headache. Hinrikus was employed by Estonia's Skype and paid in euros, rather than in British currency. Käärmann was paid in pounds, but had a mortgage in Estonia (having moved from there) requiring him to pay in euros. Every time Hinrikus transferred money from his Estonia bank account to his UK one, he would have to pay conversion fees as high as 5%. Käärmann also had to deal with these types of charges due to his situation.
The two brainstormed a solution to their predicament. Each month, Hinrikus would put euros in Käärmann’s Estonian account, while Käärmann would put pounds in his friend’s British bank account. They would then pay their bills using the correct currency, allowing them to avoid fees. The two later realized that they had saved thousands of pounds through their strategy. This led them to the idea of establishing a company that could offer a related service to consumers in different countries.
They launched that firm, TransferWise, in 2010. Customers use the service when they are moving money to a location with a different currency. Instead of sending the money directly to the recipient, TransferWise redirects it to the recipient of an equivalent transfer heading in the opposite direction. Thus, both recipients receive the money in the correct currency, enabling the sender to pay low (or no) bank fees.
The company got off to an auspicous start, being named one of 2011’s winners of Seedcamp (a program that invests smart capital into pre-seed and seed stage startups). In 2012 it received $1.3 million in seed funding from a consortium that featured several prominent venture firms and individual investors. This was followed by a $6 million investment in 2013, a $25 million investment in 2014, and a $58 million investment in 2015, for a total of $91 million.
TransferWise has gone on to be one of the hottest financial technology (FinTech) start-ups. Its first year saw transactions totaling €10 million. By February 2015, it supported more than 300 currency routes. Further, the company has been named to several “best of“ lists, including The "East London's 20 Hottest Tech Startups", Startups.co.uk's “Top 100 UK Start-Ups of 2012“, TechCrunch’s five "Start-Ups to Watch" and CNBC's 2015 Disruptor 50 list.
Benefits at TransferWise
Business model of TransferWise
TransferWise has a mass market business model, and does not make significant distinctions between different customer segments, as all have the same need.
Its early customers were expatriates, international students, and pensioners who moved to a different country; however, it is increasingly used by small and medium-sized businesses also hoping to avoid currency conversion and transfer fees.
TransferWise offers two primary value propositions: innovation and cost reduction.
The company created a solution that consumers never imagined was possible for their problem – paying high bank fees for frequent transactions. In that sense, they introduced an innovation that disrupted the banking industry by bypassing the institutions themselves.
The company helps consumers reduce costs. The first way is by redirecting the flow of money (as previously described) to ensure that the right currency is sent from the sender to the recipient (avoiding conversion fees). The second way involves reducing transfer fees. All TransferWise transfers are handled using the real mid-market exchange rates that banks use. However, while banks charge transfer fees for hidden services, TransferWise applies a low, nominal flat fee for small transfers (just £1 on transfers up to £300). Between the system’s launch in January 2011 and April 2012, it saved users over half a million pounds. As of 2016, it has saved them over £135 million.
TransferWise’s main channel is its proprietary software platform, through which its customers carry out most of their tasks. However, it also operates through the mobile channel. Customers can utilize its mobile app, TransferWise Money Transfer, to conduct their transactions on-the-go.
The company markets its services to consumers through its main website and social media pages, and addresses any questions through its customer support phone lines.
TransferWise’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. That said, there is also a personal assistance component as they can speak with its customer support team if needed.
TransferWise’s key activities focus on platform management. The company’s business model entails maintaining a common platform between two parties: the sender of currency and its recipient.
TransferWise maintains an affiliate program. Members of the program who bring new customers to the company receive a commission. The firm provides partners with all of the tools and support they need to accomplish this task.
TransferWise’s main resource is the technology staff it employs to maintain its software platform.
It also depends on its customer service staff to answer user queries.
Lastly, the company is supported by a team of investors; these include IA Ventures, Valar Ventures, Kima Ventures, Index Ventures, Virgin, Seedcamp, and Andreessen Horowitz.
TransferWise has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions.
Its biggest cost driver is a fixed cost, transaction expenses, due to the nature of its business.
Other major expense drivers are customer support and operations and sales and marketing expenses, both fixed costs.
TransferWise has one revenue stream, the fees it charges customers to conduct transactions through its platform.
It applies whichever amount is higher between the fees charged to the sender and the recipient. For example, the fee for pounds is 0.5%, and the fee for Indonesian Rupiahs (IDR) is 1.5%. This means that a transfer from pounds to IDR would be charged at the 1.5% rate.
info: Taavet was the first employee at Skype, and helped build the company. He has assisted various companies as an advisor and an angel investor. At TransferWise, he is in charge of marketing, product development, PR, and investor relations.
info: Kristo previously held finance positions at PricewaterhouseCoopers and Deloitte, working with banks and insurers. At TransferWise, he oversees all operations activities, technology, development, compliance, and regulatory issues.
info: Nilan previously worked as the VP, Growth at HouseTrip and as Chief Marketing Technology Officer at Holiday Extras, where he oversaw technology, marketing, and customer acquisition. He advises a number of early stage startups on growth and traction.
info: Harsh prevously worked as Director, Product Management at PayPal Mobile and Director, Engineering at eBay Local. He has experience working for large scale Internet companies as well as assisting and acting as an advisor to many early-stage start-ups.
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