to top

TransferWise success story

Christo Karmann is the co-founder and CEO of TransferWise, a fintech startup that helps make transfers without hidden costs and saves billions of dollars to its users. The company was founded in 2011 and has already raised $ 1.1 billion over ten years of operation.

Let’s analyze the success story of a TransferWise startup

TransferWise has received funding from well-known investors such as Andreessen Horowitz, Index Ventures and Richard Branson himself.

TransferWise was founded in London and is also headquartered there. However, Karmann himself was born and raised in Estonia when she was still part of the Soviet Union.

When Estonia finally separated from the Soviet Union, there were not many “mature” businesses in the country. This prompted Karmann to move to the UK in 2007 and work as a consultant for Deloitte. There he could truly understand how large companies operate, especially in such a large market.

Karmann and his co-founder Taavet have similar stories, and through this they became friends. Then Taavet worked as a manager in Skype, they met at a party and realized that they had common problems.

Kermann worked as a consultant in the UK and has a savings account in Estonia. To transfer his salary to this account, he would have to pay an international transfer fee. Then he thought that a one-time translation would cost him only € 15, as it was written in the conditions. With his solid salary, it was a small amount.

Karmann’s mistake was that he did not study the hidden cost of transferring money abroad.

Hidden costs

While the terms said it would only cost € 15 per transfer, his bank actually used an exchange rate that was 5% below market rates. This is due to the fact that banks usually make money with currency spreads, but Karmann did not understand that this applies when transferring money. The bank charged him extra money for each transfer.

“So I paid my British bank £ 15 and transferred £ 10,000, and a week later I saw that the Estonian account received £ 500 less than I expected,” says Christo.

Its co-founder Taavet had a similar story when he tried to transfer money from Estonia to London. His salary was still transferred in euros to an Estonian bank, but all living expenses were in pounds.

In January 2011, Karmann and Taavet started blogging on TechCrunch (it was much easier back then). Their product allowed users to transfer money abroad at a set market average rate for a 0.5% commission.

Ways to stay focused

They received positive feedback because the problem was familiar to many. Even though it took them 6 months to develop the idea, they eventually realized that getting the product to market was more important than improving it.

Initially, they developed without outside help and paid the first employees from their own salaries and savings. They were already processing up to 800 transactions per week, initially focusing only on European countries, especially Estonia.

The startup was actively growing, and they realized that they needed money to scale the company. They decide to travel to New York for the first seeding round. In the first round, they raised $ 1.3 million from IA ventures.

Startup founders are often advised to create a solution to a problem that they personally face. This may not be the easiest path, but this is how successful projects emerged.

Have you ever used TransferWise? Share your opinion in the comments below! I would be happy to answer any questions or submit your project to my team at Astorts Group for evaluation.

Alessandro Rocco Pietrocola is an entrepreneur and investor based in London and operating mainly in Europe, Asia and Oceania with main focus on UK, Baltic Countries, Russia, China, Hong Kong, Malaysia, Singapore, Middle East and New Zealand as area of interest! At the moment is the CEO of Astorts Group. He is an UK FCA (Financial Conduct Authority) Approved Person and is has great experience as director of regulated companies. He uses to dedicate part of his life to inspire others and help them achieve the most out of their life. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.


Please write me an email with your specific case or book a Skype call, my team and I will be more than happy to help you to find the best solution for your business need or to advice and support you to start the new business venture.

Leave a Reply

Your email address will not be published. Required fields are marked *