The foreign exchange payment firm that was way ahead of its time
The co-founder of a private fintech company tells Candice Krieger why he believes entrepreneurs should follow their instincts and face any issues ‘head-on’
When international payments pioneer Paresh Davdra set up his foreign exchange company 16 years ago, the term ‘fintech’ didn’t exist. Sending money abroad was costly and inefficient. But, determined to disrupt the market, Davdra and co-founder Rajesh Agrawal, the now deputy mayor of London, launched RationalFX, the UK’s first online foreign exchange service for private clients.
Fast forward to today, and the foreign exchange (FX) market is the largest financial market in the world. An average of $6.6 trillion (£4.7 trillion) is traded on foreign exchange markets every day.
RationalFX, the largest privately owned, self-funded FX house in Europe, has played a key part in the industry’s transformation, processing more than $10 billion (£7.2bn) in payments for some 200,000 clients.
Davdra, 41, says: “Rajesh and I were working at another international payments firm, but felt we could offer an online platform that was more efficient. I guess we were a little ahead of our time. Did you know that we offered pre-paid cards in 2007? Revolut launched this product nearly 10 years later and is worth $7bn (£5bn).”
The duo also launched Xendpay in 2011, a platform that helps migrant workers send money home– again ahead of its time.
Both Davdra and Agrawal still own the business but have since stepped back from its day-to-day running; Agrawal to pursue his passion for politics, and Davdra to spend more time with his family – he is married to Jewish entrepreneur Karina Davdra, the founder of Stilla Crystals. But four months after stepping back, Davdra was diagnosed with cancer, aged 38. “I spent most of 2018 in the hospital undergoing chemo and surgery – I am super-lucky to have beaten cancer and be completely clear. I am now living in Portugal, enjoying the sunshine and work remotely when I need to.”
Davdra says overcoming cancer has made him appreciate life more. “I am no longer getting to a stage where I have sleepless nights over the business. I tend to take it much more in my stride, because you know what… everything is going to be alright.”
Self-made Davdra comes from humble beginnings. He set up RationalFX aged 24 with no savings, three student bank accounts with overdraft facilities, two credit cards and a car worth about £8,000, which he sold. “Rajesh had taken a personal loan telling the bank he was going to buy a car.”
The pair didn’t take a salary for 18 months. “I was in about £40,000 personal debt by then.” But Davdra was ambitious, determined and, by his own admission, “super naïve”.
He had inherited a strong work ethic from his family, who came to the UK from Uganda as refugees in 1972.
“They worked extremely hard to provide a great life for me and my sister. We have a large and close family and have grown up with these values. Nothing is given to you, and if you want something, you have to work hard for it. But if you are determined, you can achieve anything. The Ugandan Asians are statistically the most successful migration of people to the UK – I am super proud of that.”
Davdra acknowledges the Jewish community is of a similar disposition. “I believe we share the same family values and have a big community spirit. There tends to be a genuine want to help one another.
“Work ethics are also there – nothing is given to you and you have to graft
for what you want.”
Davdra says he would love to do business in Israel one day. “I have been on holiday to Tel Aviv and Jerusalem and it was by far the best holiday I ever had.”
The pandemic has been challenging for the company which, like many other businesses, has had to make difficult decisions. “But we have been lucky that we have such a strong team and when the going gets tough, the tough get going.”
For entrepreneurs who have struggled this year, he advises: “It’s easy to let it all get on top of you. Don’t bury your head in the sand either. Face your issues head-on, be positive and you will find a way to move forward.”
When it comes to current FX trends, Davdra says the pandemic has “distracted from a real issue, which has been Brexit”. He explains: “There have been significant changes in regulation and licensing and a lot of our focus has been on that. We are still seeing a large number of companies in fintech receiving funding.
“The industry is still growing and becoming more sophisticated with the help of technology. I think we will see an acceleration as companies start to normalise and get used to the new ways of working.”
For now, Davdra is enjoying his “new life in Portugal”, helping his wife with her successful business selling healing crystals, which she launched during the pandemic.
“I’m mostly packing boxes,” he laughs. To others looking to launch a business, he says: “I think gut feelings are super-important and if you feel passionate about something then don’t over think it – just go for it. Remember you don’t have to know everything from day one, the fun part is dealing with obstacles as this helps you learn and grow.”
On the RationalFX link-up with Jewish News, he says: “We are excited to build more bridges with the community. We will save people money and create long-lasting relationships. I think this will evolve and grow.”
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