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The company's CEO Ramón Ferraz © CompassList

Banking on the opportunities afforded by blockchain, 2gether is owned by its customers who get commission-free financial services in euros and cryptocurrency

Madrid-based fintech startup 2gether is positioning itself as the world's first collaborative financial platform in the brave new financial services sector afforded by blockchain and tokenization. The startup was founded in 2016 and is owned by its customers, who are set to profit from the commission-free platform.

2gether currently offers its own cryptocurrency 2GT, transactions between euros and 12 principal tokens, and a Visa debit card allowing the withdrawal of euros from cashpoints. It's currently awaiting regulatory approval from the Malta Services Financial Authority for 2GT to be recognized as a Virtual Financial Asset. Crypto-friendly Malta is the only EU country so far that has a regulatory framework for crypto-assets.

2gether launched this year in 19 eurozone countries and plans to include more banking services and reach at least 1m users. Backed by Lanzadera, Spain's biggest accelerator, and an unnamed bank, 2gether has won €3.3m of funding so far and is in the midst of raising €4.5m more.

The company's CEO Ramón Ferraz spoke to CompassList at October's South Summit conference in Madrid.

This interview has been translated from Spanish and edited for length and clarity.

Q: Is 2gether's corporate vision to disrupt traditional banking like other fintechs? 

Ramón Ferraz: Without understanding our vision, you can't understand 2gether. We think blockchain is the strongest disrupter in the financial sector for decades. Why? Because it brings one fundamental change: the decentralization of trust. Banks and financial institutions have been around for centuries because they own the trust, so  a whole new economy is created when you decentralize this trust and new financial services become necessary. 

If new services are required, banks need to service that new economy. It's not about challenging the banks and disrupting; it's about constructing what the banks will need to be eventually. I don't know who will be competing in five years but if it's still JP Morgan, I know they'll be offering Libra – if that cryptocurrency exists then – to the clients demanding it. 

If it's not JP Morgan, then it will be 2gether. It's not that we see a problem we are trying to solve but rather a trend that is unstoppable. We believe that positioning ourselves as disruptors makes a lot of sense. If not, you're the disrupted.

Tell us about your initial recently launched product offer.

We believe that in the future we will manage digital assets of all kinds, not only cryptocurrencies. What we have today are the first-use cases of those digital assets. We have launched a product where people can do the same thing with their euros and cryptocurrencies, such as paying for a drink via our app. It is a kind of bridge product where you can seamlessly manage a transactional experience for both crypto and euros from your mobile. We launched it in the 19 countries of the eurozone in April 2019. 

Users can spend their money anywhere with a Visa card with crypto credit on it. They can withdraw euros against their cyrpto positions, transfer crypto peer-to-peer, deposit crypto from the outside and also withdraw it. So it is full utility and full liquidity for your crypto, whether it is Bitcoin or Ethereum or 10 other tokens. That's the first thing that we've launched. 

At present, you decide which cryptocurrency you wish to spend at any time in the app. What we're developing right now is a functionality where it is the app that decides which coin you are going to use at any time based on real-time market values. 

Just imagine, for example, when crypto is expected to go up because of technical sentiment analysis, then the app will pay with euros. But when that analysis expects crypto to go down, it will pay with the crypto that the system expects to depreciate the most. It is like buying currency when it's low but you don't have to take that action. Your card automatically does when you pay with it. You don't need to think about it. AI lets you do that and we're in the process of rolling it out. 

We have also launched our own token, the 2GT, precisely because we are the world's first collaborative financial platform. With this token, the user funds the company, participates in the decisions and, more importantly, the user captures the value that he creates.

What are the benefits of a collaborative financial platform for you and how will you monetize? 

The biggest value proposition of our platform is the collaborative model around tokens because it enables us to create a financial service that is not only completely commission-free, but also gives back the value that you create for the platform. 

In the traditional world, we all think that free is the maximum value a company can give us, but it's not true. Google is free but worth US$1tn because your personal data is worth €2,000 to them. You are creating value for them. So when you get into incentive models around the token, and you use the models to give back the value that the client creates, you have all that value potential to give back. That is so powerful. 

Once we achieve breakeven, we don't need to make a bottom line – only meet costs. Everything else we give back to the user. In the way we are structuring the token, by issuing a capped amount, and in how the service creates demand for the token, then the unit value of the token grows and everybody has a return. You don't need operating margins. You don't need dividends. If everybody is aligned on the token and you have a system that raises demand for the token, the return is for everyone. 

You were not one of the original founders. Who set it up and how did you become involved?

In 2016, Salvador Casquero, who has been a banker all his life, a leading trader in FX and with a strong technological background, saw that blockchain was the disruptor of banking and also its future. So he decided it was the moment to start promoting a platform that could service the new economy brought about by blockchain.

He was joined by Luis Estrada, a hardcore technology guy who had a team of 100 people in his tech company and together they started to execute their plan. I was a consultant and we did a pro-bono project for 2gether as a consultancy. That's how we got acquainted. Then, in the summer of 2017, these guys came to me with the idea of doing an ICO for a bank with blockchain. I did a project there and got more and more engaged and then the co-founders finally asked me in 2018 if I wanted to join as CEO. I said yes, of course. 

Both the co-founders, though brilliant businessmen, are also humble and recognized that neither had the management skills to make this bigger. That's how they put it to me. They said that they thought  I was the piece that was missing to make this one of the biggest banks in the world.

Who are your potential clients and how many do you have on board?

We have a very clear segment that is the crypto community but there are adjacent sectors that like the project. After deep analysis of the European landscape, we call them the “ European bankers,” people always looking for new solutions for their finance, and the “European experimenters,” who like new kinds of business models and collaborative models. Among those two segments, from the analysis we did, we are talking about 29% of the adult population. 

We are, at present, in the 19 countries of the eurozone, but we don't set our boundaries geographically. We market according to segments, not geography. 

Previously, we launched a beta version where you needed to invest a minimum of €10 in the token to become a user, but we removed that condition in September and now anyone can download the app and start using it at no cost. After making that change, we acquired 1,300 clients just in September and since then we have increased client numbers 1.5 times week on week. It should take us to 20,000 clients by year-end.

Besides your token, will you deal in other native financial products?

Our next product experience will be a marketplace for financial products, so we are never going to come up with our own. We want to distribute them via third parties. The difference with other marketplaces is that we are going to distribute products from banks, insurance companies, fintechs and decentralized autonomous organizations, or DOWs. 

So we are about distributing the best financial services for everyone. Sometimes, those services will be decentralized; sometimes they won't be. However, we won't try to have as many products as possible per vertical. We prefer to analyze each vertical and give you the best options on the market, independent of whether they are from banks, fintechs, etc. We will sell deposits, credits, funds,  insurance in the marketplace – any financial service or product attractive to our customer base. 

Finally, we want it to be a platform that allows people and companies to actually issue their own tokens and their own models around their own tokens. In the end, the user will be able to handle all of their future finances based on the euro, different tokens, different financial positions and so on. 

On top of all of that, we have built our data lake that is native from the beginning. All the information is on it and it's the perfect platform to incorporate AI and ML. Our idea is to use that to provide complex solutions that users won't even understand but which will improve their personal finances. 

Everything we do at 2gether is technology. We have a team of 20 and 16 are tech people. Every two weeks, we are developing new things and launching them on the market. 

How have you been financed until now and what are your current needs?

We have been funded as we developed. We did an FFF round of people who believed in us in 2018, in which we raised €1.8m We are now doing a Series A for €6m but we have already secured €1.5m so are still looking for a further €4.5m. A bank, whose name I cannot yet reveal, put in €1m and the biggest Spanish accelerator, Lanzadera, put in €500,000. 

Now, we will start spending on marketing so that people become aware of 2gether – something that we haven't done yet as we have been spending on tech and the products launched. Our technology stack all runs on Amazon Web Services and is fully scalable horizontally. To get 1m clients is not a problem with the infrastructure we have built and not everyone can say that. We don't have a VC onboard yet, but believe me they are getting interested!

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Edited by Matt Stanley

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