Startup of the Day: Latvian fintech startup Nexpay

Founded in 2017, Nexpay provides banking infrastructure for digital businesses, as well as a number of payments and accounts products. To date, the startup operates in 36 countries and open over 600 business accounts.

In the Startup of the Day column, CEO of Nexpay Uldis Teraudkalns shares details about the startup’s idea, its product, and future plans.

“The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.”

Tell us about your startup. How does it work?

We are a fintech startup that provides banking services and infrastructure for digital businesses. Simply put, we offer payment accounts for businesses. Our API enables businesses to offer their customers seamless integration between Nexpay and their systems, leveraging a range of payment, account, and other products developed by us. With our team of banking and digital assets’ industry experts, we aim to help our customers build new solutions with reliable, convenient, and powerful alternatives to legacy financial institutions. Nexpay is a licensed Electronic Money Institution authorized and regulated by the Bank of Lithuania.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

Nexpay was founded in 2017 when blockchain and cryptocurrency popularity was in full swing and the Baltic startup ecosystem was growing rapidly. Large corporate banks, in most cases, are not welcoming to companies working with new business models such as digital assets, gaming and others. With a wealth of experience from banking, digital assets, and investment management, we clearly saw a niche for providing the digital assets industry with banking services and payment infrastructure.

How long did it take to reach the prototype or MVP? What did you encounter?

Nexpay grew out of the crypto exchange Globitex – during the crypto winter of 2018, we were looking for ways to best serve the industry, and we realized that all companies in the space share a big challenge, namely fiat payments. Nexpay had already acquired a license from the Bank of Lithuania in 2017 to process payments, so it was just a matter of launching this new service for the customers, which was done in early 2019. Even though the beginning was quite challenging, the customer response was and has been outstanding. This new service quickly became the main business, keeping the exchange as a value-added service for Nexpay customers.

When exactly did you launch your product? Or when the launch is planned?

For the first few years, we experimented for quite some time, looking for the most successful market-product fit. In 2019, the EUR wallet ‘powered by Nexpay’ was launched. We switched away from retail and focused our services on the business segment. Now, Nexpay is helping over 600 businesses build the future of money with a range of payments and accounts products.

Tell us about the startup’s business model. How do you monetize your product?

We are a transactional business and the majority of our clients are also transactional businesses, driven by the transaction volume being processed. While we maintain several pricing plans to fit the needs of businesses of different size and maturity, at the end of the day the main driver for our business is the transaction volume that the client drives. The bigger the clients, the more fixed payments at lower rates are set. Therefore, we have a certain amount of stable income, and the rest depends on the clients’ business activity. Consequently, we are also interested in helping our clients’ businesses grow and supporting them as much as possible.

What are your target markets and consumers?

There is a wide variety of use cases we have seen for our services – digital assets business, crypto exchanges, payments providers, law offices, forex brokers and many more. We understand the digital asset industry players since our roots are also from there. Thanks to this heritage, we are better suited to serve digital businesses whose businesses are mostly conducted online, working in innovative industries that traditional banks are not typically interested to serve.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Our team is constantly growing and expanding. Whereas last year we had about 20 employees, by the end of this year our team will have more than 50. We try to have the typical fintech startup culture, with a significant focus on efficiency. Currently, we are looking for a range of positions in Lithuania and Latvia, primarily developer, AML, legal and account management. A list of vacancies can be found on our website, paynexpay.com. It’s a fast-paced environment, but we have a team of professionals that are very passionate about helping the digital assets’ industry grow in a healthy way.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.

The basis for the business was formed on a seed round with a group of private investors. Because Nexpay had grown directly out of another business, we were in a good position to tap into an existing customer base. Interest for our services has been strong and growing, and we are proud to say that we are now profitable. Given the current climate around fundraising for startups, we are not in a hurry right now to start the fundraising process again. But it’s always good advice to start raising before you actually need the money. It’s something we are keeping an eye on and balancing the environment and our needs as a growing business.

What’s next? Tell us about your future plans.

With an established brand in markets where we operate, we have plans to increase market share further. We’re definitely going to offer our customers new products, excellent service and long-term relationships. Over the past few months, we have made a number of improvements to the usability of Nexpay, and we also look forward to offering even more payment products shortly. In addition to EUR IBANs and SEPA payments, improvements will include new currencies and payment methods.