For me and my fellow MBAs, the year at INSEAD opened a whole new world of fintech companies:
“Can you Revolut me?”
“Please send the rent deposit via Transferwise!”
“I only have Monzo.”
“My primary card is N26.”
A student body from 79 countries and constant international travel created the need to optimise money transfers and currency exchanges and identify the cheapest, fastest, mobile solutions—a niche which traditional banks have been losing to challengers.
Yesterday, we visited one of the early players and frontrunners of this space, Monese, whose customers transacted over $3 billion last year. Walking into their tech office in Telliskivi, a trendy neighbourhood of Tallinn, we were welcomed by a big, beautiful dog (one of many wandering the office). The history of the company started with “moving countries,” when founder Norris Koppel moved from Estonia to the United Kingdom and struggled to open a bank account without sufficient UK documentation or a local credit history. In 2015, he launched Monese to “solve the access problem,” so that people could open a bank account without extensive paperwork or even needing to visit a bank.
Opening an account with Monese is easy: after downloading their app, identification is done by uploading a snap of your ID and taking a selfie with your smartphone’s camera, which are verified by their AI-powered algorithms. You can get your account within 2 minutes and use it for transactions in the UK and across the EU. Every month, around 90,000 new customers do just that.
At the end of our meeting, Monese showed us how it will get even easier: they handed us each a fresh bank card, which we could start using immediatelyby downloading the app to activate it.
The company doesn’t have a banking licence, so they specialise in debit cards, fast bank transfers, and global ATM withdrawals. The idea from the start was to build a primary account for people who moved countries and today, indeed, 75% of incoming funds of Monese’s customers is from salary payments. That’s why from the day one Monese allowed cash deposits – a feature that most other challengers only added-on at a later stage.
Monese’s Head of International Expansion Lauri Haav feels that the space for challengers is still quite free as traditional banks are not fully addressing customer needs and there is room for organic growth and everyone can find their niche. The company is also looking into geographical expansion outside the EU zone, for example the US or Latin America. In September 2018, Monese secured $60 million in their Series B Funding to support product development and international expansion. PayPal, European investor Augmentum Fintech, and International Airlines Group participated in the round. So far, Monese is not planning to apply for a banking license as the current business model provides flexibility for developing new products and even if they decide to go for providing credits – it can be done by creating a marketplace for peer-to-peer lending.
We are definitely excited to follow their journey in the future (and for my fellow pirates to Monese me back some cash for dinner last night…).