Startup of the Day: myTU, Lithuanian mobile banking platform
Founded by Raman Korneu and Tomas Navickas, myTU is a digital banking platform. It offers payment and loyalty solutions for private consumers and business clients with focus on travel and hospitality industry. The startup has already boasted over 25,000 customers. In September 2022, myTU raised €5 million in a seed funding round. Currently, the company aims to embed its services in various platforms, from travel providers to e-commerce.
In the Startup of the Day column, the founding team of myTU shares more 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?
myTU is an innovative neobank founded in 2019 and headquartered in Vilnius, Lithuania. We’ve fully embraced cloud technology, making our banking platform not only highly efficient but also lightweight and secure. Our emphasis on automation and AI allows to maintain efficiency with a small IT team, while our core team of experienced bankers provides top-level customer care and financial expertise.
How did you come up with the startup’s idea? What was the reason/motivation behind it?
The inception of myTU was an amalgamation of experiences, industry insights, and a clear gap in the market. Having spent 25 years in the banking sector, Raman Korneu, CEO, has been part of over 40 capital markets and M&A deals. Raman’s initial efforts to secure investors were met with challenges. Yet, while myTU had a comprehensive grasp of the banking domain, the team lacked technical prowess. This gap was bridged when Tomas Navickas joined the team as co-founder and CTO in 2019, and together, they embarked on the myTU journey.
Co-founders also added that they had two primary motivations propelled the startup’s foundation:
“First, observing market trailblazers like Revolut highlighted the potential and attainability of our vision. Second, our insights into niche sectors, especially the “mobile” customers, revealed a considerable finance gap. Our differentiation was clear – while giants like Revolut had massive teams and resources, we viewed our leaner setup as our strength.”
How long did it take to reach the prototype or MVP? What did you encounter?
After initially partnering with a third-party banking provider, we decided to take its tech stack in-house when it became clear the partner’s solutions were too expensive, unreliable and slow to iterate on. We made the decision to build entirely on Google Cloud, making us one of the first digital banks to run entirely on the public cloud. This allowed myTU to scale while keeping IT costs extremely low.
myTU launched targeting the travel industry, with the name myTravelUnion reflecting that focus. However, when COVID decimated the travel sector, myTU pivoted to family banking.
When exactly did you launch your product? Or when the launch is planned?
In June 2020, the Bank of Lithuania granted us an Electronic Money Institution (EMI) license. Our goal was always to acquire a banking license. We commenced with an EMI license, viewing it as a stepping stone.
Tell us about the startup’s business model. How do you monetize your product?
As a fintech company, we generate income through various revenue streams:
- First, we offer banking services, such as European IBAN accounts, Visa debit cards and SEPA transfers, to individual clients, for which we charge a monthly service charge of the payment card.
- Second, we earn interchange fees from payment card networks (VISA and Mastercard) when customers use our debit card for transactions.
- Third, we open accounts and provide online banking services for businesses, for which we charge a fee to open an account for high-risk companies, followed by a monthly subscription fee. For lower-risk businesses, we do not charge a fee to open an account.
- Fourth, we serve as a marketplace for businesses to showcase their products and services, deriving revenue from listing fees, commissions based on sales, and performance-based affiliate bonuses.
After obtaining the Consumer Credit Provider License, our plan is to provide travel loans that either cover the entire travel package or allow travellers to enhance their experiences (e.g., upgrading from a 4-star hotel to a luxurious 5-star stay). We will charge interest to individual clients and partnership fees to travel companies for this service.
What are your target markets and consumers?
Our primary focus is on Central and Eastern Europe. myTU is looking at countries often left in the shadow of the big fintech players, like Revolut. Specifically, countries such as Lithuania, Latvia, Slovakia, Croatia, Bulgaria, are our key focus areas.
Since February 24, 2022, the EU has registered over 6 million refugees from Ukraine, further amplifying the demographic shift in the region. These migrants constitute a substantial portion of our target audience.
“This trend is mirrored in the business sector, particularly within the IT industry, as companies relocate their workforce and establish new offices in the CEE region. Furthermore, we are providing these businesses with the opportunity to leverage our loyalty system as a means of motivating their employees.”
If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.
Today, myTU has over 25,000 customers across over 100 countries, with 30% weekly active users. As for our product offerings, we currently have a mobile banking app that includes SEPA IBANs, Visa cards, family banking features, a kids’ app, a marketplace, and a loyalty system.
Currently, we are working on launching Google Pay and Apple Pay. We also aim to expand our services, such as enabling transactions beyond the Eurozone and initiating international transactions.
What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.
Our entire IT operations are managed by just 2-3 dedicated professionals. Yet, they have the capacity to seamlessly serve up to half a million clients without a hitch. Instead of manually going through documents for hours, our AI quickly reviews and summarises all necessary materials in mere seconds.
We aim to stay lean, with a goal of fewer than 100 team members, even when scaling up significantly. In the near future, we’re keen on boosting our customer support and sales departments. We foresee bringing on board about five to six talented individuals in the next year, effectively doubling our development prowess.
Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.
In September 2022, myTU raised €5 million in a seed funding round. A group of angel investors who have built businesses in banking, IT, travel, and pharma led the round.
What’s next? Tell us about your future plans.
Within a month, we integrated AI into our platform to extract insights from user profiles, like determining political exposure from occupations. We’re actively exploring product enhancements, including “travel now, pay later” loan models, partnerships with travel platforms, and potentially transforming our loyalty system #TIME into cryptocurrency.