Every good pitch deck needs the set up. What is the status quo and how do you hope to disrupt it?
In 2011, most people transferred money abroad in two ways: either via money exchange services such as Western Union or via their bank. It was the latter that TransferWise had its targets set, highlighting the hidden margin in a bank’s own high exchange rate, in addition to a fee.
“You exchange with peers at mid-market rate,” reads the TransferWise pitch deck. In return, it would charge a simple flat rate fee of u00a31. That,u00a0Hinrikus told me, served as a “good and simple message” and worked while the startup capped transfers at u00a32,000. However, the pricing was a little naive, he admits, and has since been replaced by a low percentage fee, depending on currency.”,In one sense, this is exactly how TransferWise works today, with a few huge caveats:
Hinrikus saysu00a0the early product was a very rough MVP, even by the standards of the day, and in retrospect is kind of embarrassing, conjuring up that well-cited Reid Hoffman quote.
He also told me that none of the processes were automated back then. Instead, every evening co-founderu00a0Kristo Kaarmann would record each pending transfer in a spreadsheet and move the funds manually.
“Yes we started off all manual and that is the right way to test ifu00a0stuff works, obviously once you hit volumes you’ve got to be quick inu00a0automating,” saysu00a0Hinrikus.
The takeaway: doing unscalable things to scale.”,This slide on traction should have spoken for itself, but this was 2011 and seed money in Europe was still in relative short supply, at least by today’s standards.
Notably,u00a0 just a few months after launch over u00a31 million had been sent through TransferWise, with 70 percent repeat customers. That is dwarfed by the over u00a31.5 billion per month transferred today.”,As well as just two currencies supported (in contrast to 45 currencies today), money could only be sent to TransferWise via bank transfer. Card payments were still on the to-do list (note: Stripe wasn’t even founded till the following September).
It is also worth noting that even in early 2011, TransferWise had plans for an API. As I recently wrote,u00a0it wants to be the platform for moving money around the world and a consumer-facing app was always just the start.”,Competition was plenty even back in 2011, while today the space is even more crowded. Money exchange is arguably a commodity service and is a feature of a number of other fintech startups’ products.
However, the incumbent banks still hold a large share of the money exchange market, which remains ripe for the taking. And, arguably, TransferWise has built one of the best brands in the business.”,At the time of TransferWise’s seed fundraising, the team was just six people! Today over 800 people work at TransferWise, although it is hard to fathom what they all do.”,TransferWise was targeting seed funding of around $1 million based on the exchange rate of the day, an amountu00a0Hinrikus says was on the high side and possibly contributed to the difficulty he andu00a0Kaarmann had closing.
Up until that point, the startup had been funded by about u00a325k of the pair’s own cash, and small pre-seed funding from Seedcamp, who were bullish on the burgeoning company.
That would pay off greatly for Seedcamp this year, after the sale of its stake in TransferWise helped contribute to a 4.1x return for Seedcamp’s 2010 fund II.”,I’m sure there were lots of questions. But, as they say, the rest is history.”,Left to right:u00a0Hinrikus,u00a0Kaarmann, and an early TransferWise developer. All have aged considerably since.”,
Nearly seven years ago, TransferWise was readying the launch of its international money transfer service with bated breath. Co-founder Taavet Hinrikus would later tell me that he wasn’t entirely sure at the time if anyone would use the product. It certainly put the minimal in MVP.
The startup’s first media coverage (on TechCrunch, of course) led to the first $1,000 being transferred. Fast-forward to today and TransferWise is moving $2 billion every month.
A few months after launch, however, the U.K. and Estonia-based startup was still trying to raise its first seed round. Targeting a mere $1 million, Hinrikus tells me it proved by far the hardest to close.
The company has since gone on to raise nearly $400 million and counts the likes of IVP, Richard Branson, Andreessen Horowitz, and Baillie Gifford as investors. Today TransferWise is reportedly valued at $1.6 billion and is very likely a candidate for IPO in the next couple of years.
That makes it a good time to have a look back through this European unicorn’s early pitch deck, dated 31st of May 2011. Alongside each slide, I’ve added my own commentary based on an interview with Hinrikus in October.
Steve O’Hear was best known as a technology journalist at TechCrunch, where he focused on European startups, companies and products.
He first joined TechCrunch in November 2009 as a contributing editor for TechCrunch Europe, where he worked alongside longtime TC veteran Mike Butcher to help build TechCrunch’s coverage in Europe.
In June 2011, Steve took a break from journalism to co-found the London and Prague-based startup Beepl. In his role as CEO, he helped the company raise its first VC round; in November 2012, Beepl was acquired by Brand Embassy.
Steve left TC in 2021, joining a startup before launching his own thriving public relations shop soon after. Steve passed away in 2024 after a brief illness.
