SAN FRANCISCO — Taavet Hinrikus has boyish looks and a quiet tone.
But don't be fooled. The co-founder of money-wiring site TransferWise, recently valued at $1.1 billion, doesn't mince words when it comes to describing how banks make him feel.
"I built this company because banks were screwing me without telling me," says Hinrikus, who launched London-based TransferWise with Kristo Kaarmann in 2011 after the two tech veterans — Hinrikus was Skype's first employee — found they were getting charged big fees to wire money to friends and family in their native Estonia.
"As consumers in general, and with Millennials in particular, we're getting used to everything being cheaper, faster, better, and banks aren't keeping up," he says, pulling out his smartphone. "This right here, this is the only branch that matters."
Hinrikus says the recent Wells Fargo scandal, which found employees creating fake customer accounts and took down CEO John Stumpf, is part of a post-2008 financial crisis reckoning for large banking institutions.
"It's not like we loved banks before (2008), but the crisis showed us that they're not looking out for us," he says. "They're greedy bastards out for themselves. That's eroded a lot of trust people have in banks."
TransferWise has raised $115 million, including a $58-million Series C round in 2015 led by Silicon Valley firm Andreessen Horowitz. Earlier rounds were funded by Richard Branson and Peter Thiel, the maverick PayPal cofounder who has kicked a hornet's nest recently with his fierce support of Republican presidential candidate Donald Trump.
According to a February McKinsey & Company survey some 2,000 financial tech, or fintech, startups have sprouted up to try and challenge the hegemony of banking institutions. Despite the boom in companies with names such as Kantox and SmallWorldFS, TransferWise is among the few with mushrooming scale.
Now operating in 35 countries, TransferWise offers customers a tech-fueled service to transfer money for a fee that ranges from 0.5 to 1% of the transaction. Critical to its consumer proposition is the fact that TransferWise uses a mid-market exchange rate.
Banks sometimes provide a money-transfer wire service for free, "but then make their money on a high FX (exchange) rate," says Hinrikus, adding that a wiring money with TransferWise is roughly "eight times cheaper than using a bank."
The CEO made a stateside visit last week to announce that TransferWise, which opened its consumer-oriented business in the U.S. a year ago, would begin offering a new business-payments service. Hinrikus estimates that roughly a million businesses here routinely send money overseas to full-time and contract employees.
During an interview with USA TODAY, Hinrikus confirmed that while the company generates roughly $6 million a month in revenue thanks to nearly $1 billion in monthly transfers, the company is not yet profitable. And he's not concerned.
"We have plenty of money," he says, noting that while TransferWise isn't on the hunt for more funding, he is glad that the connection to plugged-in Valley players like Marc Andreessen means "we know what's going on with the funding ecosystem even if we aren't looking."
Asked about Andreessen's influence on the company's mission, Hinrikus laughs. "It's not like we weren't thinking big when we founded the company," he says. "But if we were thinking global, they're thinking intergalactic."
That's likely because of the size of the pie that TransferWise is slicing into.
"There are about 200 million people who live or study abroad," he says. "That might be a small niche in terms of banking, but that group is moving many trillions of dollars a year. In the U.S. last year, we moved $2 billion, saving customers $100 million in bank fees. That's real money going back into the economy."
Hinrikus says TransferWise's biggest market is the United Kingdom, where it has 8% market share (compared to less than 1% globally).
When it comes to safeguarding those transfers in an age of increased hacking, Hinrikus says his company is diving deep into machine learning algorithms that can detect potentially fraudulent activities.
"Companies that are natively technology focused I would trust more than a bank," he says before offering yet another quietly confident pronouncement.
"We are maturing for sure, but these are still early days," he says. "If we can ultimately dominate this (money-transfer) category, that would make us a sizable company."