Taavet Hinrikus, part of the original team that built Skype, has launched a campaign to help European start-ups save money and focus their resources on growing their business.
The campaign makes use of the technology Hinrikus developed for TransferWise – the peer-to-peer money transfer service he co-founded in 2011 – to give 1,000 start-ups $100,000 worth of free international money transfers ($100 million in total).
TransferWise uses peer-to-peer technology to cut out traditional bank fees. Instead of instructing your bank to send the cash to Spain, you send it to their UK-based account instead, and they send the corresponding amount of euros from their eurozone bank to the recipient in Spain, so the pounds haven't literally been converted to euros.
Meanwhile, the euros at the other end are paid in by a user in the eurozone who is looking to convert their euros to pounds, and the same process happens in reverse. Usually customers pay a small service charge to access this, but for start-ups taking part in this campaign, it will be free.
Hinrikus hopes that free access to the TransferWise platform will stop start-ups wasting money on the bank charges they incur when they pay employees or suppliers abroad, attend international conferences, set up offices overseas or raise investment from a foreign firm.
“I remember all too well how depressing it was to throw away the precious little resources we had in the early days of Skype. We didn’t have investment and were struggling – every pound and euro needed to count,” said Hinrikus
“Working between London, Tallinn and Stockholm, meant we were constantly wasting money on banking fees. It was important to me to do something about this for other start-ups when I got a chance – TransferWise’s technology and this campaign is my small way of doing that.”
The campaign has already received support from 25 prominent startups and organisations including Niklas Zennström, CEO of Atomico and co-founder of Skype; Peter Thiel, co-founder of PayPal; serial entrepreneur and investor Sherry Coutu; and Sir Richard Branson, founder of Virgin Group.
“This innovative idea for shaking up the financial services sector while helping start-ups in a practical way has caught the eye of many new businesses already – as well as established brands like Virgin,” said Branson in a blog post.
Start-ups interested in taking part should visit the TransferWise website to claim a voucher for free transfers up to $100,000. There are 1,000 vouchers in total, and they will be distributed on a first-come, first-served basis.
Startups less than two-years from launch will be eligible. Registration closes on 10 May 2013 and vouchers expire on 10 April 2014. Startups do not have to use the full $100,000 voucher in one go, they can apportion it as they see fit.
TransferWise supports currency transfers between Euro, British Pound, Polish Zloty, Danish, Swedish and Norwegian Krone. It also supports transfers from these currencies to US Dollars.