The idea of disrupting one of the largest industries in the world has become quite popular in our region. After all, even if you get a minuscule part of the pie, you are a billionaire. So companies such as Holvi, Transferwise and Isepankur are trying to do just that – making a dent in one of the largest, inflexible and controlled industries – Banking. But they are not alone, we have gotten in touch with Victor Lysenko a co-founder and CEO of Rocketbank in Russia.
Before we go into the details of how Rocketbank is aiming to take over the bureaucratic banking world of Russia, it is of interest to note that Lysenko is the former CEO and founder of Darberry in Russia. For those of you who do not know, the controlling stake of Darberry was bought by Groupon just six months after they launched. At that point it was renamed to Groupon Russia.
We reported on Cherry success last week but when we look at Lysenko and Darberry, it makes you realize just how big the market in Russia is. As the CEO of Groupon Russia, Lysenko and the team grew the company to reach $100 Million turnover with 500 employees in under 18 months. At IPO, Groupon bought out 100% of the company and Lysenko decided to move on.
For the first couple of months they were considering many different projects but the financial sector proved to be the most interesting because it is conservative and there is a lot of room for innovation. Moreover, Lysenko noted that it is also much more difficult and exciting than e-commerce. The idea for Rocketbank was born.
The thought is simple, you get a credit card that is tied to an application in your mobile phone or a tablet computer. Thus it is a mobile bank that allows full functionality of a standard bank in your phone. The business model is based on a monthly subscription of 250 Rubles (6.20 EUR) per month and also profits from the interchange rates. Except for a few details, this might sound familiar. There is a company in the states called Simple that launched a similar service.
And although there is no denying that the Darberry story was clearly a copy-cat phenomenon, Lysenko stated that it is different in this case:
“The idea is similar and Simple is more of an inspiration rather than a base. We were waiting for Simple to launch and were expecting to see a thing of beauty in their functionality. They were coming to the market for 3 years, but when we saw it – we were disappointed. In this case, its different. We think we can do better.” – Lysenko
Rocketbank was able to handle Russian bureaucratic very well and together with their banking partner they are expecting to launch a fully featured product during the summer of 2013. On a similar note, Lysenko mentioned that Russia and Europe are in fact miles ahead of USA in many ways. As an example, Lysnko said that in order to send funds to your friend, when you make the choice on your phone, Simple prints out a physical check for you and mails it by post.
We also talked briefly about why it is the start-ups that are trying to break the norms in the industry and not the banks themselves. According to Lysenko some banks are making progress, they simply do not have access to the right talent that understands the modern concepts of quality and different aspects of building a successful internet solution. So it is only logical for startups to attack this industry and perhaps take it over.
After the initial launch, Rocketbank wants to consider other European countries as well as rapidly developing countries such as Turkey, Mexico and Brazil. Asia is also an interesting consideration, but they are going to first tackle Russia and then consider an expansion. We hope they reach the Arcticstartup Region.