Success at Deutsche Börse FinTech Hub, part 1: CASHLINK
Success at Deutsche Börse FinTech Hub, part 1: CASHLINK
The FinTech Hub is an initiative to support the fintech community in Frankfurt and in the Rhine-Main region. Alongside dedicated consulting and networking services, it also offers fintech start-ups like CASHLINK co-working spaces and a modern event location. We spoke to Michael Duttlinger, one of the founders of CASHLINK – a new facility that enables easy money transfers via link.
Mr Duttlinger, you are one of the founders of CASHLINK. Please tell us more about your partners.
The CASHLINK team consists of Lars Olsson, Jonas Haag, Niklas Baumstark and me. We all studied at the Karlsruhe Institute for Technology. Two of us are business engineers and two are computer scientists.
So, you have all known each other since college and founded this start-up immediately after graduating?
Exactly, when we founded CASHLINK, we were all students, and we developed the idea for CASHLINK while still in college. I was the first to graduate, with the others following suit. Now we are here at the Deutsche Börse FinTech Hub and already have three interns and one full-time employee.
How was the idea for CASHLINK conceived?
We organised a lot of events while in college. Since we always assumed the role of organisers, we often had to collect money from many fellow students. Often, the problem was that you would not get your money back. It is a cumbersome process. People always have to enter their PIN and TAN. You have to exchange IBANs, which people are of course reluctant to do. We wanted to change that. Nowadays, it is possible to send a WhatsApp message by one click, but it is still very, very complicated to make a bank transfer. The reason for us to found CASHLINK was to finally simplify such transfers between private individuals.
How does it work? At first it seems a little strange. You don’t need an app, only a link, but apparently the money ends up in the right account nevertheless.
Yes, CASHLINK allows you to receive money from friends into your own bank account directly through WhatsApp. The only thing you must do is send a link, without anybody having to register or download an app. It is all very, very simple, and that’s been very important to us. This is how CASHLINK works: the person who advances the money, e.g. for cinema tickets or any kind of event, visits our homepage. That can also be done by mobile phone. There you create a link, such as: Tanya’s birthday, €3.20. You can then forward this link via any channel of communication, such as WhatsApp, Facebook, e-mail or text message. Your friends click the link, confirm their IBAN and the money is transferred from one account to another by our partner bank, solarisBank in Berlin.
So, one person creates a recipient account and provides you with his or her bank details. The others merely enter their IBANs and the respective amounts?
Exactly. As a consequence, IBANs are not being exchanged directly; they are transmitted subject to the highest data protection standards. You don’t need a TAN, you don’t have to log in to online banking, and you can also make a transfer while out and about – within seconds.
Is there any upper limit regarding amounts?
At present, the limit is €100. This is due to regulatory reasons. We execute business transactions within the framework of Germany’s e-money legislation, which sets a limit of €100 per month for receiving and sending money in line with anti-money-laundering laws. In the future, it will be possible to raise this limit. In that case, you will have to verify the identity of the person making payment or of the recipient. This can be done via video identification, i.e. the person concerned will hold his or her identity card to a camera and will then be verified via an external service provider.
Is CASHLINK suitable primarily for a limited group of participants, e.g within a circle of friends or a sports club?
Currently, these are some our key target groups, but our service is also geared at schools, teachers having to collect money for school trips, or associations. You can also simply use it if you have lent €10 to a friend and now need it back.
How did you end up in the Deutsche Börse FinTech Hub? How did you learn about it?
When we reviewed our first ideas in Karlsruhe, we found that we travelled to Frankfurt very, very frequently. In the fintech sector, Frankfurt is clearly the place where things happen. The community has grown immensely over the past 12 to 18 months. The number of events, founders and start-ups is rising steadily. That is why it was absolutely clear to us that Frankfurt would be the only viable location for our company. We then got in touch with Deutsche Börse Venture Network at a conference and realised very quickly that this would be precisely the right place for us to continue growing and embark on the next steps. The speed at which developments unfolded took us very much by surprise. Actually, it rather reminded us of a start-up. We found it very impressive and fascinating that you did not spend two years on drafting a concept; you simply implemented it very quickly and then continued to develop it. Deutsche Börse made the office available to us on great conditions. Moreover, we have been able to exchange ideas among the four start-ups within the FinTech Hub. We are all facing similar issues such as regulatory requirements or bank cooperations. Exchanging views with Deutsche Börse Venture Network also adds enormous value, as we are all in need of funding. Having access to investors and events, among others, has been extremely helpful to us.
How many people already use CASHLINK?
We are now available to everyone in Germany. At present, we have a four-digit number of users. Now we need to raise awareness. We will focus primarily on students, as the student environment is very open to new technology. At the moment, we only have one WebApp, but there will also be a native app, which people will be able to download in the AppStore.
Is CASHLINK limited to Germany or does it work across Europe?
Currently, we are limited to Germany. Everybody with a German IBAN can use our services. Of course, we plan to expand to other countries. For the time being, however, the focus is on Germany and on facilitating the transfer of higher amounts. One of the objectives for 2017 is to enable users to first activate higher limits through video identification and finally to send money without restrictions. This feature will be implemented into our app by the middle of this year.
What are the next steps? How will things continue?
I have already mentioned our medium-term goals. Beyond that, we are going to continuously add features to the app to enable users – at some point in the future – to use additional banking functions on top of the standard bank transfer. We want to find out which functions users are actually looking for. That is why we start with a lean product that first of all solves the problem we encountered during our time at college: collecting money among friends. Once we have achieved that, we will see what else our users require and continue to develop our product in line with their needs.
What advantages does this location offer?
Due to the growing fintech community, Frankfurt is extremely attractive to us. Immediate proximity to Deutsche Börse Venture Network is very, very important. And of course, Berger Straße is a very interesting location, as we are right in the city. This is great for our employees, many of whom also live here. It’s a nice urban district, we have a fantastic office – we couldn’t be happier with the location.
Perhaps you could briefly describe your current financial set-up?
In the beginning, our funding came from family and friends. Last year, we started preparing the seed round, which is near completion now. We found investors that are absolutely convinced of our product and our team. We are planning to conduct a series A financing round in early 2018.
Can you give us a rough idea as to the volume of the seed financing?
It will be a six-digit figure. With these funds, we primarily seek to expand our team and generate user growth.
What kinds of investors are interesting for you, and why are you interesting to investors?
At our current stage, we are interesting primarily to business angels or family offices. Venture capital funds only start investing when it comes to higher amounts, especially in series A rounds.
Since our product is mainly relevant for the German market at the current stage, we need investors that are truly at home in the German market. It is also important to us that they do not only support us financially, but also through their networks, their expertise and their experience.
Thank you very much and all the best for the future!
Interview: Jürgen Pfeiffer