The co-founder of Plum talks building a business, European expansion and why Plum has a point of difference from the competition.
It was while studying for an MBA at the international business school INSEAD, that 35-year-old Victor Trokoudes took an interest in the fintech industry.
An executive from PayPal came to the visit the business school and talk about how it was revolutionising the world of online payments.
It was a turning point for Trokoudes, a Cypriot entrepreneur, who began his career in finance working at Morgan Stanley.
Trokoudes, who also studied economics at Harvard, went on to set up Bluebird Global, an ipad-Point of Sale (PoS) reseller, which he sold on for a profit before joining Transferwise, where he helped launch the fintech unicorn in 25 markets.
He came up with the idea of savings app Plum, which launched in early 2017, when he was in his early 30s, after feeling guilty for not saving any of his income.
Trokoudes set up Plum with fellow Cypriot Alex Michael aiming to help millennials better manage their money, hoping to ride on the mania for digital disruptors.
Like rival apps, Plum uses Artificial Intelligence (AI) to calculate what users can afford to save by scrutinising their bank transactions, making micro-savings on behalf of the user.
There is also an investment element to Plum, allowing users to invest in different options, such as ethical companies or tech giants like Apple and Facebook, which there is a £1 charge.
The third component to Plum- which recently launched its app for Android phones, complementing an existing iOS app and Facebook Messenger chatbot- is to help users with bill switching, for example if it thinks a user is paying too much for its utility provider.
"We are getting to a place where we have a complete product," says Trokoudes, who believes Plum's three pillar strategy is a point of difference to rival savings apps like Chip.
"I think we are definitely the only app that are trying to bring the three components together. The other apps are focusing on savings, or they focus on investing, or they focus on bill switching. And we’re bringing all of those together,” Trokoudes said.
“We are not bringing a replacement to something you have but rather a solution to something that is not happening.”
Plum’s novel savings features include the 52-Week Challenge, which looks to save users £1378 over a year, and a "fun rule" called Rainy Day Rules, which puts aside funds whenever it rains.
"Different people want to save in different ways, " points out Trokoudes, as an explainer behind Plum’s different features.
Plum now has amassed 650,000 users in the UK, its only existing market, but Trokoudes won't say how many users are active, citing different definitions of active user numbers making such a disclosure irrelevant.
According to TechCrunch, around 70 per cent of Plum’s users are active monthly users.
The entrepreneur says a further point of difference to other UK fintechs is that Plum's user base is not overly "London heavy" and says there is a lot of headroom to grow in the UK with a potential market of millions.
According to some reports, Plum is hoping to reach the two million user mark in the UK by the end of 2020.
Staff levels at Plum are 32, with employees based in Athens and London offices (where Trokoudes divides his time between), a mix of engineers, customer support, marketing, compliance, and product managers and designers.
To date, Plum advertising has come via paid marketing on Facebook, word of mouth, and customer referrals.
Plum recently raised €2.7m (£2.3m) in additional funding to help fuel its growth and expansion to new European markets.
The additional capital means Plum's total funding comes to €8.4m (£7.2m) to date.
Supporting this fresh round of funding were existing investors the European Bank for Reconstruction and Development (EBRD,) and VentureFunds. The money, says Trokoudes, will be used to fuel European expansion.
Entry into big European markets like France, Germany, Spain and Italy is on the cards, says Trokoudes, who believes that European markets “have little in terms of digital financial assistance”.
“We can’t really say what sequence but those are the countries we will be launching first for us,” he says.
Customer service backlash
Like other fintechs, Plum has faced criticism about its customer service, with several recent criticisms, such as delays on withdrawals, surfacing on the consumer review website TrustPilot.
"It wasn't a significant problem," says Trokoudes. "When you start scaling and you use external parties and you are acquiring a lot of costumers, it sometimes puts loads on those external parties."
"We are very open about it. We are putting a lot of pressure on our various external parties because of the number of users that we are acquiring it. It doesn't happen regularly."
Hitting profitability and the future
Trokoudes is speaking to AltFi from Athens but is heading back to London in a few days, where he is busy planning Plum’s expansion plans.
The business is on the verge of becoming profitable, says Trokoudes, who is a frequent cycler in London and swims as a hobby.
"By the end of next year, we think the UK could be profitable with all the product launches coming,” he says.
He believes the time is ripe for Plum, with big opportunities in Europe (in Spain, Trokoudes says, a quarter of the population don’t have savings at all).
He hopes Plum can capitalise on a customer backlash against the current financial systems which he says to a degree is designed to “screw people”