Anyone who has ever been on a foreign holiday or business trip will have a drawer full of random leftover coins – foreign currency that can’t be used or exchanged.  Jeff Paterson had a similar problem, and was frustrated at the ever growing pile, so he, together with his business partner Oliver du Toit, decided to take things into his own hands and come up with a solution – soon to be available in undergrounds throughout London. We chatted to him to find out more.

Tell us a little bit more about your business offering

Fourex has developed a self-service kiosk that can exchange coins and notes from almost any country in the world, for cash.

And where are you based?

We have offices in Kent and central London. Our kiosks will be placed into numerous London Underground stations, as well as Westfield Malls.

Who would your target audience be? Did you see a particular gap that you are trying to fill?

How often have you returned home from your holidays with a handful of coins and notes? This money is almost worthless because the Banks and Bureau de Changes don’t exchange foreign coins, and the fees charged to exchange a few low value notes will often be more than the value of the notes you were hoping to exchange. We saw a huge gap in the market so developed a machine that allows our customers to exchange unsorted foreign coins and notes for cash. The software evaluates each and every coin on face value, and exchanges its value into Pounds. There are no hidden fees, and the customer gets the same competitive exchange rate regardless of size of transaction. The customer gets more options, better exchange rates, and the transaction is completed in a fraction of the time.

What makes you unique and gives you the edge over your competitors?

Our business is unique because by introducing technology into the foreign exchange industry we remove most of the rental and staffing costs – passing these savings onto our customers. And, unlike all other Bureau de Changes, we don’t charge any hidden fees or commission, and we don’t change our rates according to location – we make our money on the spread between what we buy the currency for and what we sell it into the market for. Not only can we exchange coins and notes leftover from international travel, we can also exchange coins and notes from most of the pre-European currencies like Deutschmarks, Pesetas and Schillings. Additionally, we also change all those 1p and 2p coins that fill up your wallet. We then collect these coins until the volumes warrant the costs involved in shipping them back to their country of origin.

The kiosk can also be used as a self-service Bureau de Change by foreign tourists. UK residents can also buy Euros or US Dollars at one of our kiosks when leaving to go on holiday.

How long have you been working on this project?

We have been working on developing the software and hardware for over three years. One of the most challenging aspects has been collecting the thousands of coins and notes that make up the currency database.

Startup_Jeff Paterson

What makes you so passionate about this business? How did the idea for setting it up originally come about?

We love the fact that we have created something that is totally unique. We looked at the problem from a customer’s point of view and saw a huge gap in the market. There are thousands of companies desperate to sell you the currency when you leave for holiday, but nobody was looking at helping the customer exchange the money that is leftover. This seemed crazy because our research showed there was over £3 Billion lying around in homes across the UK, and this was increasing by £900 million a year.  When developing the concept, we decided that the software should be capable of accepting most currencies, so it shouldn’t matter where our customer had travelled to, or what currencies they had in their jar, we should be able to exchange the entire jar, solving the customer’s entire problem.

And your background? How did you come from working or studying to running your own business?

Oliver (my business partner) and I both consider ourselves entrepreneurial by nature and like to try our hand at things when we see an opportunity. We have both had businesses on our own, and together, but knew Fourex was the big opportunity we had been working towards our whole lives. 

Tell us a bit about your childhood and family background. Were there any entrepreneurial inspirations there?

Both of us grew up in South Africa, and I think most South Africans are entrepreneurial by nature. In pre-Apartheid South Africa, you had to be an Afrikaner to get ahead. In post-Apartheid SA, affirmative action prevented progress, so either you were innovative and created employment, or you went without. My uncle John Fielden was one of the most inspirational entrepreneurs who I learnt a lot from.

Can you maybe tell us a bit more about your uncle and his business(es)?

My uncle was a true entrepreneur before there was a name for it. John and my aunt Barbara started a tyre business, and grew it to be one of the largest and most successful companies in Suffolk, supplying tires to 4×4 enthusiasts, farmers and quad bikers. They then incorporated a Honda franchise into the company and eventually listed the company on the AIM (Alternative Investment Market). They were always looking for innovations and new ways to do business, and watching them work as a team was always so inspirational to me. They tackled every project with such enthusiasm, and I try to do the same with each task that I take on. My uncle John was struck down with a stroke at the age of 49, and now over 20 years later they still work as a team to help him cope with his disability.

Was there ever a moment in your life that you think started you down this path? Anything inspirational?

It was motivated by pure frustration at the fact that the company that sold me the currency in the first place was unwilling to buy the currency back from me when I returned from my trip.

startup_fourex_uk_homepage

You mentioned a business partner. Can you tell us a bit more about him?

My partner is Oliver Du Toit. Oliver is one of the hardest working guys I have ever met, and probably one of the smartest people I know. He is the brains behind developing the machine.

Can you elaborate on how you met and ended up working together?

Oliver and I are both actually originally from Johannesburg in South Africa. He went to Highlands North High School, and emigrated to Australia when he was 28. I went to Sandringham High School and had various businesses in Joburg over the next 15 years.

We met in Abu Dhabi where we both worked for Etihad Airways on the construction side, building their Head Office and staff accommodation, amongst other things. We clicked immediately, and started a Project Management company together. The idea for Fourex came to us a few years later, and it took us about three years to develop it from scratch. Every cent we made in our day jobs over that period, plus all our savings, went into developing the technology. The reason we chose London to launch was based on securing the contract with Transport for London. TFL sell over 1.2 billion tickets through their 270 stations every year, and the opportunity to place our unique product in front of this sort of footfall is an opportunity of a lifetime. We believe we have built a product that people will love, and by placing it in a convenient location that people walk past almost every day will be key to our success.

Was there a single most exciting moment for you since starting this project?

We had two major events that changed the course of our business. The first was securing a contract with Transport for London, giving us the opportunity to place our machines in the pathway of a potential 1.2 billion people every year. We had developed a brilliant machine, but needed to get it in front of our customers. Transport for London has been amazing in offering us this opportunity. Not only do we have access to UK residents, but get to offer currency exchange to the millions of tourists that visit London every year.

The second major event was winning Virgin Business Media’s “Pitch to Rich” competition. We were chosen as winners of the “New Things” category out of over 2700 other UK companies, and the exposure we received from this was phenomenal. Being chosen by Richard Branson and his panel of judges as the company with the most potential has exposed us globally. We have been approached by companies all across the world requesting licensing opportunities, and this is definitely the route we are looking at going, once we have successfully launched in London. Virgin has been amazing in promoting us through the competition, as well as afterwards.

And the toughest moment?

Nowadays most investment is going into software, or an app. Our product was different because not only did we need to develop the software, but we also have a hardware component requiring development. This made fundraising very difficult because most investors wanted a prototype and proof of concept before considering investment. This meant we had to fund all the development. After three years of funding the project ourselves, we decided to crowdfund to get the first few machines into operation, and were blown away by the response. We were overfunded by 250% in less than two weeks from 430 investors, giving us enough money to get to market. I can honestly recommend crowdfunding as an alternative way to fund a business.

Startup_couple of coins

What’s the next step for the business?

We are already exploring international partnerships and hope to be established in multiple regions around the world within three years.

And finally, for someone considering a startup, what would be the one bit of advice that you would offer?

Don’t give up! The odds are heavily stacked against you to succeed, but if you have an idea that is worth pursuing, then make smart decisions and back yourself.

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