Foreign exchange provider Travelex has announced a £25 million fund to spur digital innovation by partnering with financial technology start-ups and recruiting talent from London's Tech City.
The ‘digital growth fund’ will allow Travelex to make seed investments in fintech and retail start-ups, as it seeks to create new products and services in areas such as crypto-currencies, digital wallets and location-aware technologies.
The fund is headed up by former Google exec Sean Cornwell, who joined Travelex earlier this year as its first chief digital officer, alongside head of digital product development, Dave Wascha.
The move comes as the 38-year old company faces a challenge from new players such as TransferWise, which recently received £15 funding for its peer to peer payments platform from Sir Richard Branson.
However, Cornwell said that, rather than seeing the the start-up community as a threat, it can help Travelex improve its own business.
“There are lots of start-ups out there testing new business models, and some of them have more traction than others, but none have the global physical footprint of 1,400 stores, a global network of ATMs around the world or this globally recognisable brand,” he told Techworld.
“So actually for us the biggest opportunity is taking some of these services and new models and ways of customers interacting with our services, and marrying that with some of the strengths we have got.
“It is about investing in areas like mobile, international payments, e-cards and e-wallets, even stuff like crypto-currencies, and starting to test new business models. This will allow us to build what we think will be some of the future growth engines for Travelex in three, five, seven or ten years.”
The firm is also planning to recruit new employees to drive its digital transformation, seeking staff in a range of fields from data scientists to mobile developers. This will involve engaging with London’s Tech City community, and Travelex will be setting up its own stand at the Bootstrapped's Silicon Milkroundabout event.
“There are only so many things we can do in a particular day or year, and only so many areas we can focus on. Yet there are so many different business models and ideas out there, and new things that are being tested," he said.
"For us it is about being able to partner closely with lots of different start-ups who are doing interesting things, get closer to that innovation and new business models, understand what they are doing and potentially make strategic seed investments when it makes sense, and who knows – maybe somewhere down the line it leads to acquisitions or other opportunities.”