The Business Owner: Doron Cohen, Covercy
Split between London and Israel, Doron Cohen talks about his payment transfer business - which is battling against the big banks
Name: Doron Cohen
Company : Covercy
Founders: Doron Cohen, Boaz Zaionce and Gonen Tiberg
Location: London and Israel
Proposition: Covercy is here to provide certainty to the UK’s small businesses by offering cross-border payment transactions which are 80% cheaper than traditional banks. Unlike other competitors, it offers guaranteed rates, in real time to businesses, meaning they know exactly how much a transaction will cost, at first glance.
Size: 10-20 employees
Describe your business model:
Covercy offers quoted, guaranteed rates which through its own, unique algorithm, meaning businesses know exactly how much their overseas transactions cost before committing to use the service. If businesses instead go with a traditional bank for such a payment, firms won’t know until they’ve actually made the payment, how much it will cost their business. It is effectively a blind gamble for a business.
Also, exchange rates are fluctuating wildly due to sterling’s huge plunges in value, meaning firms making day-to-day cross-border payments can’t adequately budget for what it will cost them to conduct such payments.
How is your business different from what’s already out there?
Covercy’s quoted rates are guaranteed through its own, unique algorithm, (unlike personal online exchange and remittance providers), meaning businesses know exactly how much their overseas transactions cost before committing to use the service. In addition, all cross border transactions can be tracked and traced in real time by a business owner, meaning complete peace of mind.
At the moment the market is dominated traditional big banks such as HSBC, Barclays, RBS, and Citi who have a stranglehold of 95% of the international business money transfer market. The traditional banks also rely solely on SWIFT technology, which means at least four financial institutions are currently involved when transferring money around the world as a business.
However, technology has advanced to such a level now that you can work with just one payment institution, such as Covercy, which is 80% cheaper than the banks and which is licensed by the UK’s Financial Conduct Authority (FCA) as an Authorised Payment Institution.
How did you finance your business?
We closed a $2.5m (£1.9m) funding round led by California based venture capital firm SGVC this year.
What is the most important thing to keep track of in business and why?
Innovation and adjustment – if you stop innovating, someone will come by and simply have a better product. If you do not adjust your offering and product to the market demands, you will be left with no one to sell your product to.
What is the biggest day-to-day challenge you face?
Delivering a customer centric user interface, despite the regulatory hurdles and outdated infrastructure, that enables our customers to make payments seamlessly.
What marketing techniques do you use to attract new customers?
Currently we have an online marketing lead generation, sales and remarketing combination in order to bring new clients to the company. We use different online channels and customize our messaging based on user behavior and feedback from the sales team. All decisions taken are data driven and constantly being tested in order to further improve the onboarding process.
Do you think it’s important for small businesses to export, any tips?
UK companies have the luxury of a domestic access to a large market. However, when seeking growth, exporting is normally one of the most obvious solutions.
Tips: seek those target markets where you can bring an advantage over competitors. English speaking countries are normally easier for UK companies, EU exports (at least for as long as the UK maintains access to the Single Market) are easy in terms of bureaucracy and taxation compared to non EU competitors.
But most important – find a target market where your product has a natural fit and advantage, so you only have to make a few (if any) adaptations.
What’s the business app you couldn’t do without?
Slack. It is a really effective communication tool.
Describe your company’s culture in three words:
Performance driven innovation.
What would you like the government to do for small business?
Small businesses are the socio-economic pillars of society and in most western countries consist of more than 70% of total businesses in the economy, yet, they are not given the same opportunities and benefits as their large businesses counterparts. Governments should encourage and support their local small business sector so that it can grow as it will benefit the country as a whole.
Like in every business, the early stages of a business are usually the more crucial ones for success. Funding for example, could be supported by the government in specific fields that a government has interest in. The know how of how to start and run a business could be done in the form of government supported accelerators that have experts in different fields that can guide new businesses.
Who’s your biggest small and medium enterprise hero?
Our hero, or heroes actually, are our clients, who are taking risks on a daily basis in order to take their business to the next level. Their determination, drive for success and the search for non-traditional solutions, like Covercy, when it comes to international bank transfers, is something to learn from, appreciate and push forward.
Where do you want the business to be in three years?
We’re building Covercy to be the preferred way for businesses to pay their suppliers overseas. In three years we aim to make inroads into the stranglehold that the bank’s have over the international business payments industry.
What’s your top tip for keeping it lean and making profit?
Assess all the tasks needed to be done in order to take the business from A to B. Take into consideration time and the impact on the business and be decisive and go for quick wins, low hanging fruits, that have great potential to help you in your decision making regarding the bigger things – go for them first as they might have saved you a lot of development time on something that might not have been defined correctly.