UK based startup, Ebury is merging forex with fintech

Ebury is a financial services company designed to empower small and medium-sized businesses that want to trade internationally. You might have heard about the company because of its recent deal with Sandtaker that granted the bank 50.1% of shares of the company. While adversity between banks and fintechs has now become somewhat of a standard in this particular case this wasn’t like that.

What does Ebury do

Ebury allows companies to make transactions internationally through foreign exchange, money transfer, and various currency services to small and medium businesses and their banking partners. While forex and fintech don’t have a long history of working together this startup managed to successfully merge the two to deliver the best experience for the users of both. But the company doesn’t plan to stop there. According to the latest announcement by Ebury, they purchase another fintech, Frontierpay, hoping to tackle international payroll solutions.

Ebury offers great services for businesses that are just starting out in forex since they get to enjoy better exchange rates, use emerging-market currencies and can make transactions in more than 100 currencies. It has a large client base, with over 3000 mid-size businesses but this partnership might bring the company the push it needs to expand even more. 

Considering the amount of forex fraud and fuss about the cryptocurrencies it can become hard to trust companies with your assets even if they seem to have a perfect record. For example, some markets that saw a very quick increase in forex traders then had to deal with fraud cases on a massive scale, so trustworthy Forex brokers online can be hard to come by. While Ebury hasn’t had any similar scandals, all these criminal cases damage the reputations of fintech and forex brokers alike. This is why going forward it will become more important for these companies to have some traditional institutions backing them or have a regulation in place that would make their customers feel safer. 

On the other hand, these collaborations work well for the banks too, which sometimes feel like they’re falling behind and not using the cutting edge fintech. Fintech bring the innovation, accessibility and their own users to these banks while bank provides an opportunity to tap into other demographics that have a harder time trusting these companies.

The Santander Deal

The Spanish bank paid $452 million for the deal with the London fintech startup. Santander now owns 50.1% of shares in the company but has come out to ensure the users that Ebury will still operate as an independent entity. This is a promising statement considering that sometimes when big companies overtake small but impactful firms like Ebuty often they take away the control from people who made the success happen in the first place. But Santander is aware that it can’t do what the fintech company did and can’t keep up in this particular realm. The best way to ensure that the collaboration like this works is to allow each partner to do what they bring to the table continuously, even after the deal.

Meanwhile, Ebury will use the funding to grow even more and develop in new directions.

But most importantly it will use the funding to establish a stronger presence in Latin America and Asia while working on elevating their existing services and working with the newly acquired customer base from Santander.

Santander which works a lot with SME has was a perfect bank to collaborate with Ebury. From their 4 million customers around 200,000 do international business. Ebury is a perfect partner since it operates in 19 countries and as mentioned above covers over 100 currencies. 200,000 new customers is a great step forward for any company but it might be especially profitable for Ebury, who last year processed almost £17 billion with just 43,000 clients.

This goes to show just how underrated small and medium-size businesses can be and how much-unexplored potential there is. SME is a great driving force for the global economy and both Santander and Ebury know that. Santander has previously invested in other SME fintech startups, the previous one being Sweden’s iZettle. Santander sees the importance of fintech for the banking industry as well as the importance of SME for the global economy. Ebury was the perfect candidate for partnership is currently one of the most promising collaborations. 

The expectations

Santander is optimistic that returns will exceed 25% by 2024. Ebury’s investors and co-founder also invested in these transactions are hoping to expand successfully into new markets. It has long been said that Europe has fallen behind when it comes to fintechs. While the UK has been the leader, producing almost 50% of the continent’s startups Ebury successful endeavors are one of the signs that this trend might be changing. Ebury’s forex services combined with the experience of Santander will likely produce exciting results. This partnership is one of the examples of a successful deal with traditionally unlikely sides that produce the product that the customers will enjoy and actually benefit from, while the fintech and the bank get to advance their skills and expand their scope by working closely with a completely different entity.