Travel debit card start-up Currensea is targeting overseas markets for its next phase of growth after a rebound in holiday demand helped the fintech grow its user base by a third this summer.
Co-founder James Lynn, a former Barclays executive who launched Currensea in 2020, told City AM that the company is also mulling several new products after fresh investment and organic growth.
He said the London-based firm currently has more than 160,000 cardholders, up from just over 120,000 in early summer.
Currensea claims to have saved travellers more than £5.25m in foreign exchange (FX) fees since launch with a card that cuts out normal fees levied by high street banks on overseas transactions.
The card uses open banking technology to link with a user’s current account and make payments directly without having to pre-pay.
“With the cost of living crisis and the challenges around that, everyone wants to save money. And so giving someone a product when they can save money easily and it’s really focused on pure travel,” Lynn said. “It just makes total sense.”
James Lynn, Currensea’s co-founder
A July funding round on the Seedrs platform saw Currensea raise just over £3.3m from almost 1,500 investors, smashing its initial £1m target within just four hours and landing a £28.5m valuation.
Lynn said the firm also received second tranche of investment from existing backers Blackfinch and 1818 Venture Capital.
“I think post-Covid, there’s been a lot of revenge travel spending. And even with people tightening their belts, those memories of not being able to travel are still quite fresh,” Lynn added.
Currensea is now pursuing a payment institution licence in the EU to offer its products across the continent and has opened a small office in the Netherlands.
“We’re just touching the edges of a massive market in the UK, and then you take on Europe and start looking at the potential there – it’s just huge,” Lynn said.
“Would we go broader? Would we go to the US, et cetera? That will play out in the future at some point.”
Currensea: Taking on Revolut and Amex
Currensea is also eyeing up new business lines as it expands both within and outside the world of travel.
“Once you’ve created a platform where you can introduce debit cards which work with existing bank accounts, a lot of things change,” Lynn pointing out that Currensea already offers a product for building consumers’ credit scores using its technology.
He added that the firm would look at broadening its core travel offering with an eSIM to combat unexpected roaming charges.
Currensea is using recent investment to develop its co-brand initiatives. Last month, hotel giant Hilton launched two new debit cards powered by Currensea, which earn the kind of reward points offered by credit card giants like American Express.
It is now looking to grab a bigger slice of what Lynn considers an under-penetrated market.
“If we look at the co-brand space, it’s a little-known fact that in the UK 85 per cent of transactions are on debit cards, so only 15 per cent of transactions are on credit cards – and yet historically co-brands have always been on credit cards,” he said.
Despite competing directly with large neobanks like Revolut, Lynn was bullish on Currensea’s prospects in the travel card market.
He pointed to research showing just 13 per cent of Britons use a challenger bank as their primary bank account.
“So if you’re going to be using a Revolut, Starling, Monzo et cetera for travel purposes, you’re basically saying to someone ‘Open a whole new bank account, transfer some money across, keep topping it up while you’re abroad,’” Lynn said.
“And that’s a big ask I think for a lot of people.”
He added that as Currensea does not hold funds, it is not exposed to a plethora of know-your-customer challenges in which banks must invest heavily.
“Because we are sitting on top of existing banks, it just makes things so much easier when it comes to rules around money laundering and who the customers are – because they’re already customers of those banks,” Lynn said.
Looking ahead, Currensea is starting to consider whether it will focus more on new funding or its own profitability next year.
Lynn acknowledged the latter has moved up the agenda after higher interest rates made fintech investors more wary of ploughing money into lossmaking firms at sky-high valuations after 2021.
“We have a couple of choices. One is to grow organically and move into profitability. The other is to look at additional fundraising and grow faster. And that’s something we’ll look at in 2025,” he said.
“There needs to be a clear path there. And I think venture investors are also very wise to that now.”