How we built one of the UK’s most profitable fintechs

Digital money transfer service Azimo is one of the few UK fintechs to have achieved profitability. Its boss tells CLIC how this Tech Track 100 company has done it, and why it matters.

Richard Ambrose well remembers the hazy, crazy days of the first dotcom boom. In the late 90s, he worked for a couple of web start-ups that went on to fail. In the vapour trails they left behind, he learned a great many lessons.

However, Richard also inhaled the sweet smell of success. After watching the dotcom bubble burst from within, he joined eBay and later PayPal – spending six years at each. He recalls: “When I arrived at eBay UK in 2003, it had 25 staff. You’d go to parties and still have to explain what it was.” By 2004, no such explanations were required, as the eBay steamroller had chugged its way into our national consciousness. Later, at PayPal, he became Marketing Director in the UK and then Chief of Staff for EMEA, absorbing even more digital expertise and management skill. 

When Richard joined money transfer service Azimo in 2017 as COO, he possessed the sort of intellectual property that any digital big-hitter would covet. Now, as CEO – a role held since July 2019 – he’s in pole position to draw on his knowledge to plot a winning route. 

So far, the route looks like a good one. In the second quarter of 2019, Azimo became one of just a handful of fintechs to become profitable. It now employs 170 people – 140 in Krakow and 30 in London. Since its launch in 2012, the company has raised £60m in funding and has enabled more than £2bn-worth of transactions from over a million customers. Furthermore, the volume of Azimo’s transfers increased by 60% year-on-year during its most recent full financial year.

Richard says there have been three elements that have been critical to Azimo’s success.

1) Find a noble purpose that ignites passion.

“One of the biggest reasons I joined Azimo is its mission. We want to democratise financial services for people who’ve historically been poorly served. Our service allows migrants to send money home to their families, but we only charge a fraction of a traditional high street shop fee of 5-7%.

“Some of our customers are migrants who don’t see their children from one year to the next; in some cases, they haven’t been home for years. We felt there was deep unfairness about the transfer charges they had to bear and we saw an opportunity to use technology to offer that service more cheaply. I love our mission. It’s a noble thing to do.

“That sense of purpose drives everything we do. It animated the early months of setting up the business and today it enables passion, allowing us to attract people who not only share our vision but who are equally inspired by it.” 

2) Evolve passion into professionalism.

“Professionalism grows from passion. As you evolve, you must impose order and structure on a business, so that you don’t grow out of your skin.

“The harsh lessons of the first dotcom boom of the late 90s apply here. In particular, it taught me to be careful with how much your business spends. That’s not a blinding insight but it still trips up many start-ups. You have finite cash reserves – it’s vital to remember that. You can’t fund yourself out of trouble forever. Lots of young companies lose sight of their cash, revenue and cost trajectory. Burning too much cash too fast can very quickly kill your mission. 

“Alongside effective cash control, your compliance and regulation have to be spot on too. We’ve recruited a brilliant team who work very hard on that. 

“We’ve also built a great marketing team who’ve turned customer acquisition into a science. We’re not targeting mass audiences; we’re marketing to distinct groups such as Nigerians in Manchester, Colombians in Madrid and Moroccans in Paris. The challenge of targeting such specific groups is fascinating from a marketing perspective. 

“Another way we have moved from passion to professionalism is through our feedback-gathering. We ask for customer feedback after every transaction. This generates thousands of pieces of feedback each month. We use them to continually improve our service.” 

3) Become profitable to control your destiny.

“Two years ago, we decided it was desirable to break even. That may sound strange but there are plenty of businesses who legitimately say: ‘We’re going to focus on growing our customer base and not worry about the bottom line. We can handle that later.’ 

“However, we recently concluded that if we didn’t become profitable, we’d lose control of our destiny. Why? Because we’re passionate about our mission to democratise financial services and improve the lives of migrants. Achieving that goal requires longevity, autonomy and independence from external capital.

“Being profitable buys you time. It allows you to look beyond short-term payback strategies and play a longer game. It changes the conversations you have internally. For example, we recently started sending money from Hong Kong. We wouldn’t have been able to do that if we hadn’t reached profitability. Opening a new market is a one-year-plus game. If you rely on external capital, you’re often restricted to projects that will pay back in just a few months.” 

CLIC’s final word

The strategy sequence outlined above by Richard Ambrose is satisfyingly logical and straightforward. Equally clear is his company’s purpose or mission. Azimo – which means “support” or “assistance” in Swahili – exists to improve the lives of migrants – some of the world’s most vulnerable people. It is rare and refreshing to hear a fintech CEO talk about a “noble mission” yet this raison d’être is perhaps the real secret of its success. This noble purpose leads to passion. Then, the passion becomes professionalism. In turn, this leads to profit. And, it is this profit that turns the purpose into reality. This is what many would call a truly virtuous circle.