At number three in Dun & Bradstreet’s Accelerate50 is Wirex, a fintech firm that spotted huge potential in cryptocurrency early and has expertly ridden its choppy waves to accelerate growth
Bitcoin has occupied the more extreme end of the technology hype cycle for a number of years now. In the last six months alone, it has grabbed major headlines after PayPal said its customers will be able to buy and sell cryptocurrency using their PayPal accounts, once-sceptical institutional banks like J.P. Morgan and Morgan Stanely vocalised their interest in the market and Tesla revealed it plans to accept it as payment for vehicles.
Cryptocurrencies are now ever so gradually being seen as a viable alternative to conventional currencies with their virtual, decentralised medium of value exchange, independent of governments or central banks.
Back in 2014, however, few people had heard of bitcoin, the oldest and best-known cryptocurrency, and if they did it was more likely due to notorious stories around its use in online black markets such as Silk Road. Yet it was at this time that Pavel Matveev and Dmitry Lazarichev saw an opportunity.
“We were reaching the peak in our previous careers,” says Matveev. “I spent my entire career in investment banks, developing trading systems and trading strategies for the likes of Morgan Stanley, Barclays and Credit Suisse. We were looking for a new venture and challenge, and we saw bitcoin and blockchain as quite an interesting technology.”
Crucially, they saw its potential to be used in more traditional financial services such as payments, if only its poor reputation as a facilitator for crime, and even beyond that a lack of understanding of exactly what it is, could be overcome. The best way of reducing confusion and making it more trustworthy, they decided, was to make it more physical.
“The physical bank card is something people trust,” Matveev continues. “Our idea was to bring together the two worlds: a bitcoin wallet, holding a virtual currency you can send anywhere in the world in real time with almost no fees, with a physical card.”
Wirex was born with a first-of-its-kind product: a bitcoin debit card that connected to a bitcoin wallet and allowed users to spend their virtual currency in an existing network of more than 50 million merchants accepting Visa and Mastercard in over 200 countries. Matveev and Lazarichev, as co-founders and co-chief executives, have since built Wirex as a market leader in a burgeoning sector that includes thousands of cryptocurrencies.
Borderless payment platform
The Wirex app has evolved into a borderless payment platform that enables customers to buy, store, exchange and spend both conventional and digital currencies quickly and securely, with no hidden fees. Executing on its mission to make crypto and traditional currencies equal, accessible and simple to everyone has driven CAGR growth of 426.33 per cent in the last three years, placing Wirex at number three in the Accelerate50 awards by Dun & Bradstreet.
Of course, simply being early in the crypto market did not, in itself, mean Wirex would be a success. The lack of regulation in the crypto market, coupled with its reputation, left Matveev and Lazarichev struggling to find the partners they required to get their idea off the ground. It was so difficult that the pair very nearly gave up altogether.
“We were excited by this idea, but we needed to partner with a card issuer and it was a challenge to even open a bank account,” says Matveev. “Everyone we spoke to said they will never work with a bitcoin company. We were really getting close to desperation, and thinking even about just doing something else, when we decided to call one final company. Long story short, that turned out to be the card issuer for our first product.”
When the product finally came to fruition, its total uniqueness in the market soon met enormous demand, which resulted in exponential growth, starting in Europe before expanding into Asia and then, this year, into North America. When it came to scaling up to accommodate the demand, Wirex found one element easy and another quite difficult.
“From a technology point of view, it was an easy exercise for us. As a platform, 99 per cent of Wirex is built in-house and it is cloud native. Rather than traditional banks that have to migrate legacy infrastructure to the cloud, facing lots of painpoints along the way, we were born on the cloud, which made it so much simpler scaling from serving just one country to serving multiple continents and thousands, and then millions, of customers,” says Matveev.
“The more difficult part of scaling at pace, however, and I think a lot of other startups would resonate with this, is trying to retain your culture. When you’re getting a lot of new employees, you need to train them and communicate your vision. If you don’t really focus on getting that right, and people don’t share the values and goals of your team, you can end up with a toxic culture. Culture was very important to us from day one.”
Wirex remains a young business in a young, fast-changing industry and its plan in the coming years is to solidify leadership in its three main markets: Europe, Asia-Pacific and North America. Data intelligence is pivotal to customising its strategies for meeting customer demands in all these markets, as crypto adoption continues to mature and competition grows from more established organisations such as PayPal and Amazon.
“People use our application differently,” says Matveev. “Some people use it just as a card because they love receiving crypto back. Some people use it for trading. Some people use it for sending money to their friends and families. Data allows us to segment these customers into 15 different personas based on their user behaviour. Through this segmentation, we can ultimately understand, incentivise and serve customers better.”