New CODE_n SPACES resident STYRA is shaking up the world of global payments
Payment systems such as online wallets, mobile money and crypto wallets – all have one thing in common – they are to a large extent siloed networks. In other words, it is not possible to directly send payments from, for instance, a PayPal account to an M-Pesa account and at the same time provide the user with a seamless experience. STYRA has decided to change that by creating unprecedented interoperability and liquidity for those disparate payment networks. Driven by their own personal stories, STYRA’s founders are set to disrupt the global payments market by leveraging emerging technologies and an innovative business model. Today is an important day for our new CODE_n SPACES residents as the they are officially launching their startup. The CODE_n team wishes Julian, Ernest and Martin a warm welcome and is excited to accompany them on their entrepreneurial journey. Read our interview with co-founder Julian Schulz and find out more about their cross-ledger technology and how it will impact global payments.
Iulia: Hi Julian, what is STYRA all about?
Julian: We are a BMWi-funded startup (In German: Bundesministerium für Wirtschaft und Energie) from Stuttgart, Germany using the Interledger protocol suite (ILP) to connect different payment systems, such as online wallets, mobile money, and blockchains hence bringing interoperability and liquidity to those payment systems. We are thus addressing the online payment industry as a whole, starting with cross-border payments. Today is an important day for us and we’re extremely excited to announce that we are officially launching our company – STYRA Technologies!
Iulia: What is the problem you are solving?
Julian: Nowadays, payment networks are siloed, disconnected and not interoperable. Payments are relatively easy within one country or if the sender and recipient have accounts on the same network, blockchain or other ledgers. Try sending to someone on a different system though, and you may be out of luck. Where connections between ledgers do exist, they are manual, slow and expensive. For example, from a PayPal account in Europe you cannot send money directly to a Nigerian Mobile Money account. On top of that, there are high costs of transaction included (8.7% for a transfer from Germany to Africa) when using financial service providers such as Western Union or MoneyGram.
We are tackling this problem by using the open-source Interledger technology (ILP) to create flexible payment channels. If a PayPal customer wants to send money to an M-Pesa customer, they establish a payment channel for the transmission of funds. The payment channel can be closed and reopened at any time or even kept open if frequent transactions occur. We provide the technical infrastructure and source the necessary liquidity on-demand.
Iulia: How did you come up with the idea and how did you build your team? What made you decide to start your own business? Tell us your startup story in a few lines.
Julian: My co-founder, Ernest is constantly confronted with the problem of international money transfers. He regularly provides financial support to his family in Nigeria, which convinced him to take the entrepreneurial plunge and come up with a unique solution. It happened that both Ernest and I had the chance to work simultaneously at GFT Technologies – in the CEO Office for Mr Ulrich Dietz. During this time, we discovered the huge potential of various innovative FinTech solutions. We were inspired by Mr Dietz’s entrepreneurial spirit and decided to figure out an innovative concept and business model to reduce the cost of international money transfers. Through a contact we then got to know Martin, our IT specialist, who has just completed his PhD in Computer Science at TU Berlin.
Iulia: How are you different from other companies using distributed ledger technology to solve cross-border payments? What’s unique about the solution you’ve developed?
Julian: What makes us different? Actually, the answer is very clear. At the moment, there are no direct payment corridors between different payment systems. Currently, customers have to send their money via third-party providers (e.g. Western Union). We don’t want to be another third-party provider. What sets us apart is that we directly connect different providers with each other and thus, we are set to create completely new possibilities for online financial transactions. The different payment providers do not have to enter into any partnerships or agreements with each other. Therefore, we clearly address a B2B market.
Iulia: What are the first business markets you’ll be focusing on?
Julian: First of all, we will be focusing on the interoperability of different blockchains. This is where we see our first customers. We are addressing cryptocurrency exchanges that want to design the infrastructure with us. Based on this, we are able to integrate payment providers in Europe and connect them with payment providers in other currency areas from all over the world.
Iulia: What motivated you to join us at CODE_n SPACES to push ahead with your startup?
Julian: I worked for CODE_n myself, so I was always inspired by the entrepreneurial spirit that characterizes the SPACES. We quickly agreed to become part of CODE_n as there was no doubt for us that the SPACES help lift great ideas off the ground. Having the chance to interact with other start-ups is of great value, especially when it comes to critical questions. The CODE_n team provides important access to contacts and various events. It also motivates us to stay in closer contact with Ulrich Dietz, the initiator of CODE_n. He is a proven expert in the digital financial sector and therefore one of our first advisors.
Iulia: What are your plans for 2019?
Julian: We have set ambitious goals for ourselves this year. As a first step, it is important to upgrade our MVP into a scalable product. Furthermore, we want to win the first customers with whom we can build a direct payment corridor through the Interledger network. We are also gearing up for our seed round, which is an extremely important milestone for us. Moreover, we are looking for new team members.
Iulia: How do you plan to scale the team in the near future?
Julian: Currently, we want to expand our software development capacities. We are therefore actively searching for a working student and freelancer with the possibility to join the team at a later stage. We offer interesting opportunities of growth to our future employees. Furthermore, raising capital for our startup and closing a seed investment to be able to further expand our team is crucial.
Iulia:Thanks a lot, Julian for this interview! The CODE_n team wishes you all the success you have ever dreamed of with your new startup!