Our tech start-up of the week is Coindrum, a company that installs machines at airports to enable travellers to convert their unwanted coins into duty-free retail vouchers.
“Not only does it solve their coin inconvenience, especially when flying to different currency countries, but it also adds an extra 10pc free shopping credit on all coins deposited,” explains Lukas Decker, CEO of Coindrum.
“Coindrum operates self-service machines in airports that travellers use to convert unwanted coins into duty free retail vouchers.
“Airport retailers then benefit as a by-product as an increased percentage of travellers that start shopping, which is their key success metric.”
Coindrum targets intra-currency airline passengers in the departure gates of international hub airports.
“On a B2B level we work with both airport authorities, where top of the list are key hub locations that host most traffic, as well as travel retail chains. The latter offer an attractive scaling opportunity as there is only few companies with a large majority of market share.
“We work with these players to demonstrate the economic potential in one of their portfolio airports, to then sign roll out contracts and expand into their global footprint.
In terms of market size Coindrum addresses a globally unsolved pain and over €2.5 billion in coins are passing through departure gates within the Euro zone per year.
“Looking at only flights into non-Euro currency zones from three key airports (Frankfurt, Heathrow, Paris-CDG), the annual addressable market size is €270 million.”
Decker founded the company when he was still in business school and describes himself as a full-blooded entrepreneur with a very international background
“Which is also why the foreign coin annoyance eventually made me think of a solution,” he explained.
“My formal education was focused on business and I graduated from a European Masters degree at UCD, for which I first came to Ireland as well, as I am originally German.
“The company attracted an amazing board very early on, including our two time investor Declan Ryan (co-founder of Ryanair), Declan Fearon (owner and CEO of Tipperary Crystal) and Prof. Frank Roche (Chairmen of the Dublin Business Innovation Centre and Deputy Principal of UCD’s Business and Law School).
“We are actually also hiring a business development executive at the moment.”
Decker says Coindrum’s technology is very sophisticated thanks to some great partnerships he was able to form.
“We made deals with both the European market leader in coin processing technology as well as with a Dublin-based provider of loyalty solutions. These partnerships allowed us to make the solution the best it can be by integrating the hardware and software of both companies into our final product. It also paved the way for rapid growth as we have little risk of internal supply bottle necks.
“Our machines have touch screens and are PC based, giving us lots of customisation and programming flexibility. Depending on where they are placed we can accept up to four currencies all at once poured into the machine, which will then print a voucher in return (also has a QR code with all details to be scanned by the cashier at check out).
“On the backend all transactions get synced with an online database in real time, so we have full control of the metrics, how many vouchers were issued to what amount and when, etc. We can even take over machines remotely and see the coin tank capacity and all sorts of other details.
Decker says Coindrum proved both the technical feasibility as well as the economic potential of the concept in its recent project at Dublin Airport.
“I am now gearing up to repeat the success in every major airport worldwide, it's a win-win solution and they should all be our partners!”
Trial of champions
Decker said the key objective was proving what Coindrum was promising to the industry in a trial project.
“That was recently achieved and we are hence very excited about the next steps, mainly showing to some of the major travel retailers worldwide what we can do for them. We raised two rounds of finance so far and I am not actively looking to close another one right now.
“However, there will be a next round as we will require roll out capital and we maintain good relationships in the investor community so they are comfortable with the way we work and the progress achieved.
Sparking a revolution
Decker said it was a tough grind to bring the first project together as the company was introducing an innovation into a relatively conservative industry.
“Without a track record this is tough. Airports get swamped with business proposals, often have governments involved and are unlikely to let you get away with a Minimum Viable Product.
“It took a lot of effort, a very well thought out and researched proposal, proven technology and team of high credibility to make the first deal. We managed to deliver on expectations since and will be able to leverage this successful case study in future.”
Choosing Dublin over Berlin
Decker says the Dublin start up scene in particular has been of great benefit to Coindrum.
“Being German and having spent five years in London people might think I would gravitate either there or to Berlin, however I made a conscious decision to settle here.
“The list of benefits is long from the informal and accessible culture, tax, availability of funding and young, highly educated talent, presence of many relevant MNE's and in my case the global relevance in the aviation sector.
“There is of course still work to be done, especially when it comes to promoting all these factors internationally. I actually recently joined Minister Nash's 'Advisory Group on Small Business', which means I get to voice these kind of concerns for young entrepreneurs in Ireland.”
Decker’s advice to other start-ups is to stay hungry.
“Don’t get comfortable and go for it, it's a great time to start a business. You have to think big if not to say global and be aggressive in the pursuit of your ambitions. Also, surround yourself with people that are where you want to be.
“When it comes to the daily grind make sure you are informed about all the opportunities and support that the Irish ecosystem has to offer – speak to Enterprise Ireland, your LEO and other entrepreneurs to learn what's available.”