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Daumantas Dvilinskas. „TransferGo“ nuotr.
Today, the money transfer startup TransferGo, which has been up and running for a decade now, is among the main contenders for Lithuania’s next unicorn. Over the past 18 months, its transfer volume has increased almost two-fold, net revenue – by 80% give or take, and team size – by a third. The platform has over 5 million registered users in 160 markets and a 4.8/5-star rating on the review aggregator site Trustpilot.
Last year, TransferGo attracted one of the biggest venture capital investments in Lithuanian history – $50, with total amount of funding currently standing at nearly $130M. Although Daumantas Dvilinskas, the CEO, lives in London – the company’s main office, together with the lion’s share of its employees (330 in total), is located in Lithuania.
“The essence of a strategy lies in that, which you don’t do – once I realised this, positive results finally started to come,” said D. Dvilinskas, remembering that period, the failure of his first startup, and advice the piece of advice he wishes he knew before going into business.
– Although TransferGo’s achievements today are impressive, starting a business was not something that you dreamed of since childhood, is that correct? How did your journey in that direction begin? What kind of environment did you grow up in?
– Truth be told, as a child, I wanted to be president. I grew up between Vilnius and Trakai districts, having a variety of hobbies – from playing the guitar to tennis. My parents, who are both lecturers, encouraged me to experiment, so I could discover what I truly love. This strategy paid off and I’m very grateful to them for it. Having a wealth of experiences to draw on not only helps you choose what truly matters, but also boosts your self-confidence, at least if you’re good at several different things. Later, I considered going into politics, but eventually found the traditional career path to be quite boring and risky. It makes you dependent on other people’s decisions.
– What made you decide to go abroad?
– My generation is probably among the first to have had the opportunity to study abroad without much difficulty. I consulted my parents and they said that Lithuania didn’t yet have globally competitive universities in, say, the field of business. I wanted to go wherever I’d have more opportunities, not only in terms of the quality of studies, but also regarding fellow students and the experience of lecturers. Most people who used to be in my circle at the time are now highly successful. We’d spent lots and lots of time having discussions, working on joint projects, etc., all of which inspired me.
– As someone who studied business in the UK, do you think entrepreneurship is something people are born with, or can it be developed?
– It can be developed, but it does require a certain foundation. I like to think each of us has a passion that we devote plenty of time to. For some, it’s art or music, whereas for me it’s business. I like knowing exactly what I have to do and what the result is going to be. For instance, expats send 20% of their income as remittances, and we save 90% on transfer charges for them. This means they and their loved ones can now enjoy a higher quality of life. I can’t even begin to imagine how I could’ve spent the past 10 years that I’ve been with TransferGo in a better way.
– But TransferGo is not your first startup. Tell us a little more about the run-up to that.
– I studied at Lancaster University in the UK, which had a formidable student body and a wide variety of business funding programmes. While there, we started building Pinevio – a startup that can be likened to Pinterest today. It was around 2009 and people were still unsure whether Facebook was going to be anything more than a passing trend. We met with the first accelerators, made a visit to the United States, and managed to raise some funds. Six or so months later, however, Pinterest became the next big thing. Our idea and vision were on the right track – it’s just that we weren’t the ones to implement them.
– What happened next?
– Well, we certainly didn’t file for bankruptcy, as there wasn’t anything to bankrupt. We just spent the money we had and were then fresh out of arguments for raising any more. The day we fully realised our situation was a dark one, I met with my colleague and we agreed that although we’ve learned a lot, it simply didn’t make sense to further pursue our idea. Even knowing there were lots of other opportunities out there, and that I was now stronger and more experienced, didn’t make it that much easier – it was a dark day. Afterwards, I spent a good deal of time working on myself.
– Given your predicament at the time, what helped you to recover the most?
– I decided not to get stuck at home and instead went outside and talked to people. Together with the same team, we organised a 3-day conference for startups in Lithuania that was attended by 500 people – including some investors from Twitter. I came to realise that very few people ever manage to find their golden mean. It often seems as though, if only you were to become wealthy, you’d be the happiest person in the world. On the other hand, if you failed and went bankrupt, it would be a total tragedy – you’d essentially no longer even exist. Neither is true. One of the best pieces of advice I’ve ever heard is that, if you’re young and don’t have family or other obligations, all that failure can possibly do is send you back to sleep on your parents’ couch for a while. You don’t really have anything to lose. The ego only exists in our heads. By the same token, even the day when you achieve the success you’ve always dreamed of, and worked for, may turn out not be all that joyful. Money brings new problems, opportunities, risks, and needs – the wheel just keeps turning. The most important question you have to ask yourself is: “Did I do everything that I could?”. It’s also the same question that investors ask themselves when their businesses fail.
– How did you guys get started? And how is TransferGo related to linen products and the “Company of Four”?
– I met a lot of smart people at university, one of whom was Justinas Lasevičius – co-founder and current Executive Director of TransferGo. We started a business together, making bags in Lithuania from Belarusian linen and selling them to libraries in the UK. We had to make lots of international transfers, which was an absolute nightmare. Eventually, after we found a solution for ourselves, I decided to quit and started Pinevio. Justinas also continued developing the idea on his own. We stayed in touch, exchanging messages and contacts. After some time, we got 2 other friends to join us, and I myself came back to the company.
The essence of a strategy lies in that, which you don’t do – once I realised this, positive results finally started to come.
– What is TransferGo today? How would you describe it?
– It’s a team committed to making the transfer of money back home as convenient as possible. We’ve reduced the price of money transfers and optimised the timing of receipt. Our first geographical region was Western and Eastern Europe, the second – Europe, Ukraine, and Turkey, and the third – Europe and Africa. We’ve also recently announced our entry into Morocco, and have been successfully growing in Nigeria and Ghana. In addition, we’ve launched our card in Poland this year, and started shifting from money transfers to banking services.
– In the past 10 years TransferGo went through several highly contrasting business development stages. What insights do you have for making businesses succeed?
– I think of our first 5 years as those of mere survival. We founded TransferGo with an investment of €150K, which most people would think is insufficient for starting a business today. We begged to differ, but it certainly took us a while to find success. Regarding the very first stage, my advice would be: “Get more money”. Later on, we started competing with other companies, building up our own organisation, and taking care of regulatory matters. And now we have all the conditions necessary for success. However, despite currently being in the best shape we’ve ever been in, the answer to the question, “Are you successful?” will only become apparent at the end of this journey.
– What would you like to have known 10 years ago, and which mistakes would you like to have avoided?
– “The essence of a strategy lies in what you don’t do” – once I understood this, our results started improving. Business founders often think doing more is better, which is a big mistake. The chance of you founding a successful business is small to begin with. And if, on top of that, you spread your focus far and wide, you end up a jack of all trades and a master of none. At first, we did many different things and expanded across several client segments. That was a mistake caused by my thinking we had to be multifaceted, to diversify our returns. Luckily, however, I had good advisors and managed to realise in time that I was rushing ahead too much.
– How do you see your mission at TransferGo today?
– To be frank, my personal goals and duties at TransferGo change every 18 months. My job increasingly demands making, rather than implementing decisions. Furthermore, the importance of decision-making is growing, and they’re becoming riskier and riskier, and related both to our team and our clients. To people, essentially.
– Is it difficult to share failure? To acknowledge that you don’t yet have the right solution to something?
– I’m glad that my relationship with Justinas remained close, despite all that we had to go through over the years. I’m also grateful to my partner, who is now building her own startup and probably understands me significantly better than before. Support is crucial. But, at the end of the day, you’re left to grapple with the questions demanding answers by yourself. Rather than running away from them, my strategy is to dive right in and try to understand what’s really going on. Although it’s important to surround yourself with people who can help you grow, business founders usually remain their own judges. Talking and sharing brings results, certainly – but you’re still the one making the final decisions.
– I know you have some unusual habits. What does your time off work look like?
– I don’t really like basketball, but love watching shows about it. Usually, I don’t even look at the court – I’m just interested in the analysis and the general gossip.
– Many startup founders today look at economic forecasts with not a little worry. What’s your prediction regarding early 2023?
– We’re used to bad situations being resolved by “releasing” more money into the economy. The curve representing this would be V-shaped. I believe things are going to be different this time. Recovery will be longer. Everything’s getting more expensive, wages can’t keep up with increased spending, businesses are contracting, and we’re seeing downsizing everywhere from Twitter to Meta, and even outside the tech sector. It’s going to be a difficult period. But we should also take account of the context – this is all happening right on the heels of an economic boom of historic proportions. Some time will be needed for the situation to stabilise. This process will show us what’s real and what’s not, meaning – what’s uncompetitive or fraudulent to begin with.
– What advice would you give to young startups or those reliant on investment for growth?
– We’re not yet seeing any signs of contraction with regard to the early stages of business development. The largest contraction is taking place in later stages, including the stage we’re currently at ourselves. I would advise those who are just starting out to make sure of securing a bigger gross profit margin. You must be developing technologies capable of solving real social problems already today. What’s needed right now is to focus on building sustainable businesses able to grow without relying on outside investment.
– Have you adjusted TransferGo’s development strategy to reflect the above risks?
– We’ve always had less capital than our largest competitors, which necessitated a strong push toward maximum sustainability and profitability. While seeking growth was obviously necessary to generate revenue, I believe the reason we’re going to stay in the lead in the future comes down to the things we always did right. For instance, if you have one business that’s growing by 30% and generating 8% in profit, and another that’s growing by 70% and generating -20% in profit, the former will be seen in a much more positive light. Lithuanian startups are still well regarded in Europe, which opens us some opportunities.
– But you’d also attracted some impressive investments. In 2021, you closed one of the biggest venture rounds in the history of Lithuanian startups with €43M. Could you tell us more about raising such a massive sum? How did it happen?
– It took a long time – about a year, which is twice as long as before. Digital sales were riding high during the pandemic, but there was hesitation due to fears about a long-term recession. By the way, most of our investors are people we’ve been working with for many years. For instance, once some of them refused to invest during earlier stages, we came back and convinced them by showing that our promises actually panned out.
– How do you TransferGo’s future? You’ve recently updated your employer value proposition with the slogan “The world needs migrants”. What are your long-term goals?
– We genuinely want emigrants to become wealthier. Both me and that Romanian over there, figuratively speaking, who goes abroad to pick strawberries, are in the same boat. We’ve all left to make things better at home. We’re aiming to build an entire financial service ecosystem and to become global players based in Europe. Additionally, we’re trying to shift from being a startup to an innovative corporation that would facilitate sustainable growth, long-term decision-making, and retention of talent. I’m used to the “faster and more” approach, so it’s going to be a challenge for me as well. However, we do have an excellent team, which is a big asset. I can say with certainty that TransferGo gives me more than I give to them.
