IRISH TRAVEL TECH startup Coindrum, which puts self-service currency exchange machines in airports, is trialling its product with a number of major travel retail groups.
That’s according to its founder and chief executive, Lukas Decker, who told Fora that several undisclosed airport retailers are “talking with us or already have a deal signed”.
“There are only really 10 big companies that have about 60% of global market share. We’re basically in with all the key players now,” he said, adding that a number of them are “at contract stage”.
Coindrum machines, or ‘units’, allow air passengers to dispose of unwanted foreign coins in exchange for duty free vouchers worth 10% more than the cash value.
The service is currently available in five airports including Dublin Airport. Decker said he expected it to be rolled out to every international airport in the world over the coming years. He said:
Simply put, every international airport hub in the world would be more profitable and better run if there was a Coindrum unit in there.
Milan
Earlier this year, the startup signed a supply deal with Swiss retailer Dufry, which operates more than 2,200 duty free shops in over 60 countries. Coindrum has installed a machine at the entrance of the group’s flagship store in Milan Malpensa airport.
“They now know what we can do for them in Milan, which is probably one of our strongest performing units,” Decker said. “Now we’re talking about putting way more in [other airports].”
Last week, the startup installed a unit in Brussels International Airport as part of an agreement with the International Duty Free group.
“That put us on the map in the industry,” Decker said.
Coindrum raised over $2 million in its latest funding round in January, which was led by a group of high-profile investors including Ryanair co-founder Declan Ryan, Hostelworld co-founder Tom Kennedy and CarTrawler chief technology officer Bobby Healy.
Decker said having well-known industry names on board has helped build the company’s credibility.
Growth
According to the most recently filed accounts, Coindrum reported a loss of over €135,600 for the financial year that ended 31 December 2015, pushing accumulated losses to over €200,000.
Decker said the company is “optimising for growth, not profitability”.
“If we wanted to be profitable we would just stop advertising all the units. They would be profitable by themselves,” he claimed. “We want to grow, to impress our retail partners and show how well they’re doing and educate the market. Those are expensive things to do.
We have the money in the bank. Growing and doubling the unit count over and over again, that’s what we’re trying to do.
Decker said that there are “a lot of complementary arguments to be made” about selling the company to a duty free group or foreign exchange firm, but said his “head isn’t in that space yet”.
“I’m very much in value creating mode, not value extracting mode.”
Footfall
Decker, who describes himself as an “entrepreneur at heart”, came up with the idea for Coindrum while he was travelling.
I was commuting so much between currency areas that I always had the issue of leftover coins and different currencies. It was obvious to me from being in the airport that lots of other people did as well.
“The solution came when I was on the motorway in Italy and paying my toll. That was the moment when I had all these coins in my hand and got the idea of throwing them into a machine all at once.”
Coindrum units are installed and managed by the company itself by contracting cash-in-transit firms and vending companies that already operate in airports.
In return for covering the cost of the machines, retailers offer 10% free credit on every coin deposited, which Decker says they are happy to do because it drives up footfall.
[Issuing the voucher] means somebody is committed with a little paper contract, if you like, to start spending money in their shops. Once they do, the industry wisdom is that they might spend €50 or €60. The retailer is quite happy to offer that extra credit.
Initially, Coindrum approached airport authorities about installing the machines, but Decker found the process was slower because “there are governments involved”.
Written by Conor McMahon and posted on Fora.ie
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