With so many different mobile wallets on the market, it’s sometimes hard for the end-users to make up their minds on what the major differences are and what is best for which purposes. Players like Revolut and Monzo are the ones that are raising the huge VC rounds and investing in marketing and growing their customer bases all over the world, and making it harder for smaller local companies in the domain to gain market share. But that’s not exactly the case with Phyre – the founded in 2017 fintech startup that already has 100K+ registered end-customers of its mobile wallet, and provides the wallets of two of the three Bulgarian telecom companies.
“We are actually aiming to build a whole ecosystem of interoperable wallets and add different features and incentives for transactions within it, in other words, a platform which brings convenience and additional benefits to the end consumers and value-added to merchants allowing them to leverage on their transactions data while keeping users privacy,” tells us co-founder and CEO Konstantin Djelebov. His company just raised €1.55M to continue working towards this vision. The round is led by the new local VC fund New Vision 3, and joined by Bulgarian American Credit Bank and several angel investors, who all invested in the form of equity.
Differentiating from the giants: From b2c to b2b
Phyre is an e-wallet that supports local IBAN, contactless payments with both Android and iOS devices, physical and virtual cards, and has a few new features like for instance utility bills payments in the pipeline. It was launched on the market in 2017 by a startup, part of the fintech group Paynetics, whose e-money license Phyre uses, with the idea to target end-customers. “Although we have a dozen thousand users in Romania and the UK, we are a local Bulgarian player, so we are mostly working on functionalities for the local market,” explains Djelebov.
With the b2c model and close to no marketing investments the team of already 21 people managed to reach 115K users, most of who are paying ones. Phyre has a free plan in which users, however, pay for bank transfers (1.1 BGN), top-ups (0.6%) and other features, and a plus plan at the price of €1, that allows bank transfer at a lower price, and free top-ups for amounts under €120. ATM withdrawals cost the same for both plans €1+0.6% of the amount. The price for currency exchange also varies based on the plan. In a nutshell, all registered users of the app can be counted as paying if they have used any of the services ones. The startup, however, doesn’t disclose the number of plus plan users.
“Of course, we experienced a drop in the transaction numbers at the beginning of the crisis, but we already see the numbers increasing again, so I expect us to be back to growth by the beginning of May,” says the CEO.
Although the b2c model is the popular one for companies in this domain, it requires a huge marketing investment but the return on these investments may not come soon. “Acquiring users at scale is quite expensive. Therefore, we’ve joined forces with enterprises that already have a substantial customer base. The recently launched mobile wallets by telecom companies A1 and Vivacom, are running on the Phyre platform and they are part of the same network,” explains Konstantin Djelebov. This, according to him, is currently the growth engine of the company.
The network effects
Phyre’s vision is to build a network of different wallets, not necessarily under the same brands, and allow their users to make all transactions they need to – from peer to peer payments, to utility bills and other services payments, easy and affordable within this ecosystem. Features like loyalty cards and cashback are also on the agenda for the near future.
The company is currently talking also to corporate clients from different sectors. “We have received requests from different markets already, we would be expanding abroad mainly through partners and with the b2b model, which allows us to launch a mobile wallet service for an enterprise client in 3 months or less. As for the b2c part we really want to focus on what local customers need most and develop it,” says the CEO. Most of the financing will also be used for further product development and making the network the one place to go for digital and mobile payments. This seems to be a convincing thesis also for the investors.
“Phyre as the leading and most technologically advanced digital wallet in Bulgaria. Combined with a highly experienced and solid team, we believe that the company fits perfectly with our VC model and is doomed to succeed,” commented in an official statement Konstantin Petrov, managing partner at New Vision 3, the lead investor.
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