Foreign Exchange Fintech Startup Aims to Take on Wise

  • A fintech backed by the founders of Robinhood has set about taking on FX giants Wise and Revolut.
  • Atlantic Money aims to undercut the incumbents by charging a flat fee on transactions of any size.
  • Founder Patrick Kavanagh said the startup was standing on the “shoulders of giants.”

A fintech founded by two former Robinhood alumni plans to become the new standard-bearer for international money transfers by undercutting the industry’s established giants like the now-listed Wise and banking app Revolut.

Atlantic Money, founded by Patrick Kavanagh and Neeraj Baid in 2020, has attracted a wealth of top-tier investors, including Coinbase-backer Ribbit, Kleiner Perkins, 20VC founder Harry Stebbings, and the creators of Robinhood, Vladimir Tenev and Baiju Bhatt.

The startup, which emerged from stealth mode earlier this year, offers money transfer services for a flat £3 ($3.90) fee which it claims is cheaper and simpler for users, than existing offerings. Wise helped break down the stranglehold on money transfers over the past decade held by financial institutions by dropping the commission it charged on FX.

Instead, Wise began charging a variable fee on transactions that made it considerably cheaper than its banking rivals. Now, Atlantic aims to do the same to Wise with its flat fee structure. While a £20,000 transfer on Wise would cost in the region of £81, Atlantic claims the same transaction would cost £3 on its service.

Atlantic’s cofounder Patrick Kavanagh is keen to recreate the success of the first generation of fintechs by solely focusing on one product.

“The first wave of fintech had one job which was to create a good quality product to convince people to do finance on their phone,” Kavanagh told Insider.

“We’re past that now – those companies have mass-market adoption, all kinds of people do financial services on their phones. These companies have built products to serve everyone but this is not feasible long term.”

Atlantic contends that

fintech startups

have too often looked to become “super apps” or offer too many services to users that they are not best in class or market-leading in. Kavanagh gave the example of a customer making FX transactions who may not also be on a platform to trade crypto.

Both Kavanagh and Baid, who raised $5 million in a seed round in March, said offering too many functions ultimately results in customer service suffering as a result. Fintechs thriving to become a one-stop-shop financial app typically cross-subsidize services to make prices attractive to all users.

“We are standing on the shoulders of giants in many ways,” Kavanagh said of the now-established fintechs. “But to compete with us now Wise would have to cut down on its offering to copy us. We’ve gone to the mountaintop with them but we are higher quality and more focused.”

Atlantic Money charges a single fee that looks like a fairly hefty sum for small transactions in foreign currencies but could well be more cost-effective for larger deals. As it stands, the company offers nine major currencies and uses local payment networks, meaning transactions could take a couple of days to clear.

The startup is now regulated by the UK’s Financial Conduct Authority according to Baid who said Atlantic had also drafted in Callum McWhir, another former Robinhood employee, to head up its compliance operations.

Atlantic currently employs 14 staff, all working remotely, with plans to hire more throughout the year. 

“We do lots of volume, so don’t want to be understaffed,” Baid added. “You don’t have hyper-growth by default when you are a focused business.”

The pair want to emulate the success of their former employer Robinhood, and added that they were lucky to be part of the brokerage firm’s journey. 

Atlantic’s founding duo indicated that understanding customers and a sense of shock and awe from users in the product were key to growing the business. 

“When you look at disruption over time, it’s about getting better customers,” Kavanagh said. “Cross-selling doesn’t work, the person who wants the best money transfer service isn’t the same person who wants the best insurance.”