December 7 and 8 are the days when one of the world’s biggest tech events, TechCrunch Disrupt 2015, takes place in London.
Earlier in September, the LTP team had the pleasure of attending TC Disrupt in San Francisco which turned out to be a great experience. TC Disrupt in London is certainly as great and exciting since it gathered industry influencers, top CEOs and thought leaders in the tech space at one place for insightful discussions on upcoming trends in the technology industry.
While the conference is gaining momentum, social media is getting actively filled with positive vibes around discussions and interviews on stages. When it comes to FinTech, it was especially great to see women discussing finance onstage.
It is also worth mentioning the hackathon that happened prior to the conference on December 5 and 6. Talented entrepreneurs and enthusiasts were building fascinating solutions from the ground up to share the power of technology and innovative ideas.
Among interesting findings at the conference was Turkish startup Twentify with its Bounty app. Twentify brings FinTech and the labor market together with Bounty, enabling users to find quick jobs for a small pay up to $40. The app’s top user is now bringing in $2,000 per month doing “gigs,” as company calls it, through Bounty. The app counts 70,000 users doing jobs for 40 customers in Turkey, Canada and Mexico.
Another interesting finding from the FinTech sector was Yoobic, focusing on increasing sales for merchants through efficient marketing efforts streamlined in one app. Yoobic allows merchants to see how in-store experience is aligned with marketing expenses and converts in sales. Using Yoobic, brands engage with store managers and corporate marketing teams to monitor the pricing, placement and promotions around their products.
For the record, Yoobic was one of TC Disrupt Battlefield’s finalists along with another FinTech startup Max, which focuses on last-mile delivery services for urban Africa. Through APIs built into text messaging and other ordering platforms and pricing based on distance instead of weight, Max gives merchants a way to have their goods to be delivered to customers within three hours of the order being placed. Moreover, around 70% of Max couriers are full-time employees on branded motorcycles, with extra, crowd-sourced couriers who are paid per delivery.
YayPay is a London-based startup that was launched on a stage at TC Disrupt's Startup Battlefield competition, presenting its solution for easy, faster and better invoice collection. With a SaaS model, the company targets SMEs that make less than $5 million in revenue and don’t have any incentive to pay a dedicated accountant. As Co-founder and President of YayPay, Saul Frank said to TechCrunch, “YayPay takes all our users’ invoices and we bundle them into statements. The idea behind the statement is that you get a collection of invoices, and when you remind customers that they need to pay, you remind them once.”
Satago is another FinTech startup focusing on invoicing. The UK-based startup has a simple mission—to help small businesses and freelancers get paid on time. As described by TC, Satago users link their Satago accounts with their in-house accounting software, and Satago uses anonymized data to create a database that shows how well (or how poorly) companies are keeping up with payments owed. Satago was launched two years ago at Berlin's Startup Battlefield where freelancers and SMBs could report anonymously when they got paid by particular clients. Satago made its platform free to all users and introduced a new premium version called Satago Invoice Finance, which is supposed to open up a revenue stream.
One of the most notable chapters at the conference was a discussion by Klarna Co-founder and CEO Sebastian Siemiatkowski about his payment startup and the wider financial tech ecosystem in Europe and in the US. Klarna is known to the LTP team for its innovative approach to authentication using horoscope.
Founded in Stockholm in 2005, Klarna is one of Europe’s fastest-growing companies offering safe and easy-to-use payment solutions to e-stores. Valued at about $1.4 billion in 2014 when it raised roughly $100 million from existing investors, Klarna has nearly doubled its valuation in is 2015 funding round by reaching $2.25 billion. With a 10% market share in Europe, the company is actively rolling out in the US and going public would seem to be the next step. However, as Sebastian shared with TC, the company has no plans to do so.
Speaking about the US market, Sebastian commented at TC Disrupt that even though there are more players in the US, there are still a lot of opportunities as other players seem to be more complicated to use.
Klarna has a unique model where it allows customers to pay back to Klarna in 14 days while Klarna covers the expense to merchants. By doing so, company separates the shopping process from the actual payment by covering the expenses to merchants and then collecting payments from customers at its own risk.
As Sebastian shared at TC Disrupt London, Klarna wants to disrupt the massive retail banking market. He also added that there has virtually been no innovation in the banking world in Europe for a very long time. However, with international borders being blurred and markets become more open, Klarna has an opportunity to play on market insufficiencies, which required Klarna to become a registered bank in Europe.
As mentioned, Klarna is looking to explore and extend presence in the US; the choice of the market wasn’t accidental. At TC Disrupt, Sebastian argued that out of all the markets he has looked at, the one he found most competitive is China with a very strong player, Alipay. Sebastian also mentioned that markets like India, Brazil and Japan are far more interesting because there’s less competition there, which creates better opportunities for Klarna.
Another company that gathered attention was TransferWise, a UK-based startup, which moves over $778 million all over the world in transfers. The year 2015 was an important and big year for the company; Taavet Hinrikus, TransferWise Co-founder and CEO, took the stage to tell the company's founding story.
As a reminder, TransferWise utilizes P2P model for money transfers to save on bank fees moving funds internationally between accounts. The company matches users with funds in different currencies that want to send money internationally. Moreover, transfers are completely transparent.
With the success the company is achieving internationally, TC Disrupt for TransferWise was dedicated to the origins of the idea.
Sharing the story, Taayet commented, “During my time at Skype, when I realized this problem, at one point, I moved from Tallinn to London. I had to go to a bank branch every month and move my money. I looked at my statement and wow—first of all, it takes way too long for the money to arrive, and second, I realized some money was missing.”
Taayet also expressed excitement about the past year’s results as the company has achieved a lot, “This year has been the year we’re becoming a global business. In a pretty short time, we’ve gone from a European player to a truly global player. We launched in the US this year. We launched in Australia last week.” The company is also planning to expand to New Zealand, Hong Kong, Singapore, Japan and more.
Earlier this year, TransferWise raised $58 million from Andreessen Horowitz, Valar Ventures, Index Ventures and Seedcamp. Even with growing competition in the FinTech sector, Taayet didn’t indicate any concerns on TransferWise's position in the market, commenting, “I think it’s a very highly defensible business. It is very hard to build a brand online. I challenge you to find another financial startup that has a 5% market share. Making sure that we move tens of millions every day is hard as well. I’m actually feeling pretty good.” TransferWise has been extraordinary in showing attitude towards banks pushing fees and even went with some clothes off in London, referring to total transparency in contrast with banks. The company shared the experience in the blog, posting some pictures from the “naked” gathering. Taayet also touched on bitcoin as two years ago, the company discontinued supporting it, “And the trouble with bitcoin is that nobody is asking for it.”