Finance Monthly had the privilege to interview Paresh Davdra, the co-founder of the world’s first free money transfer, Xendpay, as well as the UK’s first online foreign exchange service, RationalFX. Paresh is a serial entrepreneur and business leader, an expert on FX markets, currency trends and overseas property advice and trends.
Paresh’s experience in the FX and IT industries spans over a decade and his key skills include sales, strategic thinking and an expansive knowledge of the financial markets.
Paresh grew up in Harrow, London with his close knit family. His father is originally from Uganda but was forced to leave with the rest of the family back in 1972. They arrived in London with £50 between them and Paresh and his sister were the first family members to be born in the UK. With the entire family living under one roof, Paresh learnt about family values and ambition – traits that he attributes for his success today.
Whilst at university, Paresh worked at a brokerage firm and went onto work there for a year after graduating. It was here that Paresh got his first taste for foreign exchange, and after a year, he and Rajesh quit their respective jobs and moved to Brighton. With one phone, one computer and no money, RationalFX was born.
Paresh is an advocate for all things entrepreneurial and encourages those starting out to be brave and tenacious, and this is reflected in the company culture which he describes as a ‘learning environment with no revolving door policy’.
What more can you tell us about Rational FX? What are the company’s beginnings, values and mission?
The idea for RationalFX first came to us whilst Rajesh and I were working together at a brokerage firm. With expert knowledge in the field, we had spotted a gap in the market for an online foreign exchange service and decided to take the leap. Rajesh and I packed up, moved to a small flat in Brighton and started the RationalFX journey with as little as one phone, one computer and £20,000 (a small ‘car loan’ Rajesh had taken out).
First of all, we identified a key customer base – the overseas property market – which provided excellent potential for growth. With this in mind, we then chose to target overseas estate agents, who recommended us to clients in return for a small fee.
One of RationalFX’s key values is innovation – we don’t want to simply move with the times, we want to be the change makers. Fintech is shaping the future of the financial services industry and we are delighted to be a part of it.
Another value is our people.
What were some of the complexities that you faced when setting up the company?
We founded RationalFX not long before the 2008 financial crisis, when many organisations failed due to the recession. We were becoming successful in the three years leading up to the crash and when it hit, everything slowed down. In the financial services industry in particular, recessions make a monumental difference.
Thankfully for us, the financial crisis did not hit us too badly – in fact, it presented a real learning curve for Rajesh and I as founders. I, in particular, learnt to be more responsible with money, as we can never fully predict when a crisis will hit, or even how much it will cost.
You founded Xendpay as an independent company in August 2012 – what is the history behind starting the business?
Xendpay came from an idea Rajesh and I had resulting from friends’ complaints over the costs of sending money back home to India. We did some research into the fees money transfer companies charge and were astounded by the additional amounts they requested. In response to this our friends’ worries, we decided to try and solve the money transfer issue for good, creating the world’s first free money transfer service, Xendpay.
What motivates you about working within the Fntech field? How challenging would you say is to provide online exchange and money transfer services?
The Fintech industry is extremely fast-paced – innovation is key to the survival of the sector and this creates an exciting environment to be a part of. It makes me proud to be able to give customers more choice as opposed to just the traditional banks on offer. Since the financial crisis, customer trust for these institutions faltered greatly and they need to know that there are more options available to them.
What is the achievement from the past twelve months that you are most proud of?
We have managed to grow and compete in a very competitive market whilst remaining privately owned. Last year we grew at close to 70% and we have continued to reinvest in technology to further bring down the cost of money transfer. But I would have to say that the biggest achievement has to be being able to pass on that value to our clients via our online platforms. Whilst our competitors have continued to burn extortionate amounts of money in marketing, we have been busy giving that back to our clients using our ‘pay what you want’ model.
How is Brexit going to impact the Fintech sector in the UK, and in particular, your businesses?
With the recent PMI data indicating positive gains across the UK industries, the economy as a whole does not look as if it is going to struggle as much as expected in response to Brexit. With the capital of the UK holding first position for Fintech globally, this was also in danger post-Brexit. It is much too early to tell however, as talks regarding passporting rights for financial services are yet to be finalised. At present, the Fintech sector remains strong – there is every possibility that London will remain the Fintech capital for the foreseeable future.
Your business partner Rajesh Agrawal was recently appointed deputy mayor of London for business – how is his appointment affecting Rational FX and Xendpay?
Rajesh is now the non-Executive Chairman of our group. Whilst we feel very proud that he is doing such a great job for London businesses, he also has his hand full and is extremely busy in his new role… I am lucky that he has been such a great mentor to me over the years and I am able to apply that knowledge as CEO.
What would be your top three tips for young entrepreneurs willing to ‘go the extra mile’?
Perseverance is crucial to being an entrepreneur. Life is challenging, and starting your own business is equally so – if you believe in what you’re offering, stick with it and others are sure to believe in it too.
Another tip, in the same vein, is to be brave and take risks. We took some gambles when RationalFX was starting out – we had no money and no salary for the first few years – but it eventually all paid off. When a good opportunity comes your way, grab it with both hands. Don’t worry about being perfectly prepared because you’ll learn a lot along the way.
Finally and most importantly – never give up. Stick to your values and you can’t go wrong – this isn’t to mean you won’t fail, but it’s worth a try if you’re fighting for something you really want!