Paresh Davdra, Founder and CEO of RationalFx and Xendpay (Image credit RationalFX, Xendpay)
Paresh Davdra, Founder and CEO of RationalFx and Xendpay

Paresh Davdra is the co-founder CEO of RationalFX and Xendpay, both are based in London. RationalFX is the UK’s first online foreign exchange service, it has just 108 staff but operates internationally with an annual turnover of over $3 billion. Xendpay is the first Pay-What-You-Want money transfer service with offices in UK, France and Spain.

ET:         Who is your inspiration and why?

Paresh Davdra:  I take inspiration from a number of different people for different reasons. My father came here in 1972 with his brothers, sisters, mom and dad without any money as they got thrown out from Uganda. They came here as refugees and they’ve all managed to run successful lives. Got good jobs and supported us, actually. That to me is a really big inspiration.

Another would be my business-partner Rajesh who I started RationalFX with some 12 years ago. He came to the country just over 15 years ago. We setup and started what today is a successful business and he’s now the deputy mayor of London. He’s from a very humble background and told me that the first ever international flight he ever took was to London. When he flew over London he said “One day I’m going to really make a difference there.

ET:         How would you describe your leadership style?

Paresh Davdra:  It’s consultative. I speak to all of our managers a few times a day to find out what’s happening. If they have any ideas, we run through them together. It’s more informal than a formal weekly meeting and catch up. It’s an open floor and there is a lot of interaction with everyone which I think is great.

ET:         What are your personal challenges for the next 12 months?

Paresh Davdra:  In August I’m getting married in Tuscany which is very nice. I don’t speak any Italian and I think this is going to be quite a big personal challenge to make sure that it will go smoothly. Right now that’s probably the biggest personal challenge I have.

ET:         What was your darkest business day and how did you overcome it?

Paresh Davdra:  It was quite soon after we started the company in 2008 when we had the big banking crisis and the recession. When we started the company in ’05 I was 25 years old. Quite immature I think and I thought I’d be a millionaire within a year. I was borrowing money and buying a nice car, things like that.

In 2008 there was a bit of a reality check with the recession. The markets moved significantly and we had to do margin calls on clients. The private market of people buying properties abroad dried up. We had to have a solid focus on business customers which is what we do today. 80% of our revenue comes from business clients using our services to transfer money abroad. There was so much uncertainty at that moment. I was 27 turning 28 and it was a big learning curve for me. At that point we didn’t know what was going to happen or whether we’d be around much longer.

ET:         How did you overcome it?

Paresh Davdra:  The biggest problem in life is probably fear. Fear creates all kinds of other obstacles including uncertainty. The main thing I did was face it. I said, “I can’t change what’s going to happen but I can face it head on. Be courageous. Take it on and fight.” That’s exactly what we did.

ET:         What is your proudest moment?

Paresh Davdra:  There’s been a few. I think the proudest was quite recently when we moved into our new office in Canary Wharf on the 32nd floor. My dad came up with some of my relatives to show them the offices. Seeing his face and showing them around made me very proud of what we’ve achieved. He turned around and said: “Your grandfather would be really proud.” My grandfather was a successful businessman in Uganda.

ET:         Can you share a tip for new startup CEOs?

Paresh Davdra:  I would say be patient. Believe in what you’re doing, grab that opportunity with both hands and really go for it. You can’t feel bad about trying really hard and then potentially failing, which is unlikely if you really put everything into it. If you don’t put everything into it and it’s a half-hearted effort than you’re very likely to fail.

ET:         What’s the latest business book you’ve read?

Paresh Davdra:  I’ve never really read any business books. I read a lot of autobiographies which I quite enjoy. More for enjoyment than much else. A lot of them are quite inspirational from Ghandi to Steve Jobs.

ET:         Do you get the influences from any other external sources?

Paresh Davdra:  I have attended a course at Cranfield on leadership and strategy. It was a short course. Pretty much everything that I’ve learned has come from running the business. I’ve been very fortunate in having a business-partner who was our CEO originally and a massive mentor for me. I’ve been extremely fortunate in being able to lean on him over the years and learn more while squaring the business.

ET:         What are your key business challenges for the next 12 months?

Paresh Davdra:  Brexit. We employ a huge diverse number of people. More than 50% of our revenue comes from Europe. That’s businesses in Europe that send money abroad. We’ve got huge French, Spanish and German teams that sit in our office. Not knowing what’s going to happen is a big deal. Ever the optimist that I am, I think that there will be a solution. Ultimately Europe need the UK just as much we need Europe.

ET:         Have you got any thoughts on the potential impact if Brexit brings the end of freedom of movement?

Paresh Davdra:  I don’t think that businesses are really thinking that it is something that is going to happen. Companies like Apple setting up their headquarters in London show that they must be quite confident that the freedom of movement is going to potentially continue. It would be a big impact I think if it wasn’t. There would be huge skill shortages in various sectors. You only have to look at the NHS.

ET:         Which technologies do you think will influence your industry most over the next few years?

Paresh Davdra:  The biggest one that’s being talked about right now is blockchain. There’s various debates going on right now whether 2017 will finally be the year of blockchain or whether it will be a number of years before it really comes to the forefront. I think that it’s heavily dependent on regulations and an acceptance from the banking world which we’re yet to see, to be honest. I think that’s the biggest game changer. That could potentially happen to our industry.

ET:         We are seeing blockchain come into areas like Supply Chain and indirectly into finance. Banks are slowly coming around to the idea of blockchain but not necessarily one overriding blockchain platform. The challenge seems to be agreement on a common platform. Do you have any views on that?

Paresh Davdra:  I would tend to agree with you. Banks make a lot of money from moving money around. Essentially all the companies such as Xendpay or RationalFX tend to still use the banks eventually to get the money to where they need it to be. Blockchain offers a lot of transparency and efficiency. I can see that if the banks can’t control or commercialise it and I can see them having an issue with it. I also think that there’ll be a point where they may not have a choice. We’ve got companies like Swift, which is what the banks work off, that are developing their own blockchain technology.

ET:         Do you see an opportunity for yourselves to get heavily into blockchain or is it a case of waiting for the banks to do so?

 Paresh Davdra:  I think there is a little bit of wait and see. It’s really important to ensure that we create our platforms so they’re almost blockchain ready, if that makes sense.

ET:         What’s the worst and best decision you’ve made as a CEO?

Paresh Davdra:  I can’t think of something that I would consider being my worst decision so far. I guess it would have a detrimental impact on the business. The best I think would be really pushing on Europe and moving heavily in that direction. It’s added a lot of value to our company.

ET:         What are the key challenges faced by your industry?

Paresh Davdra:  Brexit and regulations go hand-in-hand. We all need to be up to speed with compliance. I can see that it would hurt some companies because it’s quite a costly affair. In order to make sure that you are staying, not just keeping up to speed with the industry but staying a little bit ahead you do have to spend a fair amount of money. I think that’s a challenge. Additionally, last year, the statistics say that we saw more than 50% used mobile apps over desktop. There are many companies that still don’t have apps. I think that’s the way the industry’s going to move.

ET:         How do you see the company changing in the next two years? How do you see yourself creating that change?

Paresh Davdra:  Being a lot more technology focused. Right now we still do a lot of offline deals because many of our customers like to have that handholding service. They want to talk about what’s happening in the market, strategy and things like that. In the next year or so a lot of that’s going to move online. We’ll be able to provide a lot of online tools so they can do or receive that same service that they’re getting over the phone but online in a more effective, efficient, and a self-service style manner.

ET:         Your international expansion is achieved without opening offices, how do you do that?

Paresh Davdra:  We target overseas in a much more efficient way. A lot of companies have grown organically and don’t have the bandwidth in terms of management. When they try and setup overseas offices they hit a wall. Once it’s out of sight it’s almost out of mind and out of control. Although we have many customers from France, Spain and Germany, we don’t have physical offices there. We have foreign national staff that are placed here and we have virtual offices.

ET:         In terms of approaching other markets, you’re looking to expand into Australia and other places, are you looking to follow the same method?

Paresh Davdra:  We would like to but there’s a bit of an issue. It’s not just time zone, you can overcome that. It’s the regulatory aspect of it. With Europe obviously we can passport using the FCA across Europe and there’s no issue. That allows us to open local bank accounts in European countries. That lets our customers pay locally and make domestic payments which is easier, simpler, and more effective for them.

In Australia, without having the right regulation no bank will entertain opening a local account for us. It would mean that we would have to physically go to Australia, setup over there, and get a licence.

ET:         Are you looking to expand into the U.S.?

Paresh Davdra:  The US isn’t really on our horizon at the moment. With the US you actually need a licence for each state, bar maybe two. If you had a licence in California you can’t have customers in New York which is amazing.

ET:         How do you prioritise your day?

Paresh Davdra:  I think every day’s quite different. I spend a fair amount of time researching and looking into what’s new, what’s happening and any kind of movements from our competitors. A fair amount of time is spent talking to the heads of the different desks in our company with regards to how they’re getting on and whether they’re on track. I ask about anything that they need help with or pushes from other departments in any kind of direction. We also talk about anything that they’ve seen that we should be aware of. That takes up a fair amount of time. Once a week I sit with our CTO. We discuss what’s happened during that week. If there’s anything new that’s coming about. Any ideas that we think that we should be exploring. Overall making sure that we’re on track to achieve the objectives that we’ve set out for the year.

ET:         What’s the one question you’d like to ask another CEO to answer?

Paresh Davdra:  How many eureka moments do you have and how often?

ET:         How many eureka moments do you have and how often?

Paresh Davdra:  They don’t happen that often if I’m absolutely honest. We’re very creative because I think that we’re still a small team. The communication is so great between everyone that there are many creative ideas that are thrown around. Being nimble we are able to try a lot of different ideas. We didn’t know that we were going to be successful in targeting European businesses because there’s a massive fit around culture and things like that but we have been. We only did that from taking that risk and trying.

ET:         Thanks Paresh


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