Dublin startups tell their stories, powered by DCU Ryan Academy.
Meet Lukas Decker, CEO of Coindrum.
Tell us about your service…
Coindrum operates self-service machines in airports that passengers use to convert unwanted coins into duty free retail vouchers, especially when they are about to fly to different currency countries. As an extra incentive we give people 10% more shopping credit than the deposited coins were worth and there is also a charity donation option. It’s a simple convenience service for travellers that don’t want to carry foreign coins and also increases the percentage of passengers that shop for airports and their retailers.
What inspired you to start Coindrum?
I spend a lot of time commuting between currency jurisdictions, so I was always annoyed by the dead weight of foreign coins I was carrying around. So one day I was paying motorway toll and threw a few coins into a machine out of the car window, I heard myself thinking “This is how easy I want it to be to get rid of my coins in an airport…” And that’s exactly what we do. I was half way through my Masters in UCD and really wanted to start a business rather than going into the corporate world. Once I came up with the concept for Coindrum I quickly committed, wrote the business plan and started presenting the concept.
How is Coindrum different?
I did extensive initial research, just to make sure I had clarity for myself on the opportunity and the way I would approach it. There was just no solution in the airport market that addressed this inconvenience.
What market is Coindrum targeting and how big is it?
We target departure and transit passengers in the departure gates of international hub airports. There are over one billion international travellers every year and if you just look at the Euro zone, over €4 billion in coins are passing through the departure gates every year. Looking only at flights leaving the Euro currency countries from just three key airports (Frankfurt; London Heathrow; Paris-CDG), the annual addressable market size is €356 million. Every international airport could also do better in terms of customer service, speeding up security checks and driving retail revenue by being a Coindrum partner. We won’t run out of airports to partner with for a long time.
— Coindrum (@Coindrum) May 20, 2015
What’s your business model?
We make it easy for our airport and retail partners to say yes to the service by offering our technology for free with a fully serviced solution. We only charge the retailers a commission when we send them a new customer that starts spending money in their shop. No risk or set up cost for them, only upside.
What was the funding process like?
We raised two rounds already and are about to do a third. Overall, it’s safe to say that my experience has been great due to the fact that we found the right partners for the company, including Ryanair co-founder Declan Ryan. Declan and his company Irelandia Aviation have been of great support, way beyond their financial input. Being German, I voted with my feet when it came to choosing Dublin as the place to start Coindrum, and I have not regretted it. I am concerned, however, about the need for tax and financial incentives that would encourage early stage investments and unlock much-needed access to funding during the fragile period of any companies’ development. We need something similar to the UK’s highly successful SEIS scheme.
Who are your investors, and why does that matter?
Our founding investor Declan Ryan has followed his money since the initial angel round. We also got money from Enterprise Ireland and will soon be doing another round to fund our scaling process. Beyond the shareholders we also were able to attract a very strong board early on, which lends a lot of credibility to the business and has other benefits, amongst them mentoring from experienced people and concrete introductions to relevant decision makers. People are everything, and getting that part right is key, especially when it comes to parties that will be with you for the entire journey, shareholders in particular.
What are the biggest challenges your business faces today?
The main challenge used to be having to sell our airport partners and retailers on expectations; now we have very strong metrics that make the demand side of the business a lot easier to manage. As we are transitioning into scaling, the challenges are different. Now it’s more about finding the right talent and making sure we keep up the factors that has made us successful in Dublin Airport.
What do you think motivated your investors to write that check?
I raised the first angel round when I had nothing but a PowerPoint, and I think the money was given based on my determination to make what seemed like a strong concept work. If there is little or no traction or proof of concept the idea is not much to go on, so the entrepreneur is a big part of the investment consideration. I made sure that my commitment was clear, working full time for the business from day one of graduating from my Masters.
For the money we’re raising now, there is a lot more to go on – we proved the model technically and commercially. Coindrum may be small in terms of ‘lagging metrics’ such as revenue or footprint, however the ‘leading metrics’ that venture investors like are incredibly strong. These would include things like rapidly growing user uptake, repeat business or the fact that we issue vouchers that are worth on average €5.50, but people end up using them to spend a lot more than that at the tills.
What milestones do you plan to achieve in the next six months?
Close the next funding round, hire more people and roll out into some of the major airports we have in our customer pipeline.
What advice can you offer companies in Dublin who are just starting out?
Do your homework on the support that is available to you from the Local Enterprise Office, Enterprise Ireland, accelerators and start up competitions. Build a team with the right skill balance and don’t be overly generous with handing out equity early on.
Tell us something you love about Dublin as a startup community and as a city?
Dublin has quite a few similarities with my home town Hamburg in that they are harbour cities with a little too much rainfall but very friendly and approachable people. When I think of getting squeezed into the Tube in London, it has a nice population density. For business it’s good in many ways: it’s English speaking and leads itself to scaling efforts in the US, the talent pool is young and educated, the informal and social culture means you can get in front of people and generally, it’s an open economy with a big reach.