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Taavet Hinrikus, one of the co-founders of Estonian money-transfer service TransferWise, has announced that he’s organizing a campaign to offer 1,000 startups up to $100,000 each in free international money transfers. As part of the campaign, Hinrikus has recruited a number of major supporters to contribute. There are really too many to list here (a full list can be found at here), but the most prominent backers include PayPal co-founder Peter Thiel, Skype co-founder Niklas Zennstrom, Jon Bradford from TechStars, serial entrepreneur and investor Sherry Coutu, and many others.
The application period is not open indefinitely, however, and interested startups need to apply before May 10, 2013 if they are interested in participating. As the funds are distributed on a first-come, first-served basis, those interested in participating should probably apply as soon as possible. We’re told that only startups less than 2 years old will be eligible to participate and that the funds are delivered in the form of a voucher. Startups which receive the vouchers do not need to spend the funds in one go, but they need to know that the vouchers will expire on April 10, 2014.
Hinrikus explains this initiative as an effort to use the technology that TransferWise has developed to support fellow startups by offering them a way of better allocating their funds at this early stage. Hinrikus says that he has first-hand knowledge of the financial challenges that startups face from when he was director of strategy at a little startup called Skype from 2002-08. He says that he remembers well the frustration of having fees eat at his company’s resources as they managed accounts in various countries and needed to transfer funds and wants to now assist EU startups in avoiding these hassles.
TransferWise founded to provide customers with an alternative to banks and other wire transfer services. Just recently, we’ve seen they and Lithuanian competitor TransferGo emerge as cheaper alternatives to traditional services. As Natasha lives in Germany and I live in the United States, we’ve learned from personal experience how costly and challenging it can be to transfer funds internationally. We actually began using TransferWise a few months ago as they charge a very minimal transfer fee. They don’t list their fee, as the company’s site states the current inter-bank fee constantly fluctuates, but there is an interactive tool on the site for figuring out how much money will wind up with the recipient. The service is a bit limited at the moment, as we’re told they currently only process transfers involving British pounds, Euro, Polish zloty, U.S. dollars, and Norwegian, Swedish, and Danish krones. Money can be converted into U.S. dollars, but the reverse is not yet possible (though coming soon, we’re told).
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