Shawn Du, CEO, Revenir

Today we're meeting Shawn Du, the CEO of Revenir. The company works with banks and FinTechs to make reclaiming VAT on purchases abroad easy and form-free.

Over to you Shawn - my questions are in bold:

Who are you and what's your background?

My first ever job was actually part-owning a computer shop when I was in high school and was aiming to become a computer engineer. But my first actual paying job was at Deloitte as a consultant. I have a background in finance and accounting, but I figured out that I need to move into a higher-paced environment, so I moved to investment banking and m&a. 

These roles gave me the opportunity to understand the discipline of how to work, but also showed me the drawbacks of a larger corporation. Consultancy really taught me how to think out of the box, but it's a very repetitive role where things can happen very slowly, and it can be very difficult to actually implement those out of the box ideas. It was these roles that pushed me into launching my own business quite early on in my career. And I'm now on my fourth startup.

Would you give us a flavor of those startups?

Of course. In 2014/15, as I was entering into investment banking, I started a co-living company, which was a nonprofit. The investors didn't really understand why they wanted to give me money without any direct payback - it is a tricky concept! However, that taught me what is important for me in my career - how can I help individuals? Later on, we actually figured out a possible financial system and a business model for us to continue - and that is still helping to grow the local economy.

My second one was a French school. I come from the French side of Canada and if you speak French, you can accelerate your permanent residence application by about a year. With that one I had to collaborate with the local school boards, with local government, and the Home Office. It’s where I started to look into how we can create something that is tangible and directly impactful on the daily life of the individual. 

I have exited one and I'm still investing in another one. But then I came to the UK for my Master's degrees to educate myself a little bit more.

Did you always plan to be in financial services?

I'm pretty good with numbers, so originally I was aiming to be an engineer of some sort. But I also have a student loan to pay off, so financial services was an intriguing career path for me to take. And I really saw the benefits for individuals to educate themselves and turn their livelihoods around. I think financial services have really spoken to me, and so I have leveraged my networks and my knowledge within the financial industry.

What is your job title and what are your general responsibilities?

At Revenir my job title is CEO. My responsibilities are leading the company on innovation, collaboration and impact. And my secondary title would be Janitor. I sort out the plants and clean up the cups. We have a very small team and I want to create a space that everybody loves so that they take ownership and want to join me to collectively achieve something.

Can you give us an overview of your business? 

When I came to the UK, I only came with one bag. I was going to finish and go back to Canada. But when my friends and family visited me, they did a bit of shopping, nothing too fancy but they were supposed to be able to get back, let's say £50 worth of VAT. We had to line up at Heathrow for two and a half hours and then we were told that that half of the receipts were not eligible and we’d got the wrong form and then we had to take the FX cut because we wanted Canadian dollars. In the end we got no more than about £19.

After that experience, I started looking into the industry. I thought that there must be a better way of doing it. So we started the company with just one email address and we would send it to friends and family offering to calculate how much money they could get back, forward it to HMRC and return it to them.

For a small fee, I assume.

Well no, we weren't charging at first. We wanted to prove the concept, but also I was a student, so I probably shouldn’t have been working for profit from the Home Office point of view. We went to every single airport to try and explain it to people. Later on, I brought my classmate to hold the line for people while I did the paperwork on the laptop, so if I couldn’t do it, they still had their queue position and could get their money back that way. One gentleman got it and saw the money come back to him and he started advertising on our behalf which eventually led to security kicking me and my classmate out of Heathrow airport! But that's how we started. And then we applied for Y Combinator, still with no product, just one email address.

I'm a massive fan of the whole YC concept. Can you give us a bit more of a flavor of it?

I remember being on stage with all this talent around me - people from Stanford, from Cambridge, from Oxford, from Google, from Meta, all with engineering degrees or computer science degrees. And it was just me standing there with a finance background and my one email address. The whole room started laughing, but the Y Combinator moderator said something that is still ringing in my ears, he said, “that's how you do it. You shouldn't be building anything if you haven't tested or you haven't gone to your market, you haven't spoken to your customers. 

Tell us how you are funded?

The first ever funding was actually from Imperial College London. We won one of their pitch competitions and because of that money we bought the domain, Google workspace etc and it really gave us the opportunity to plan and bootstrap. We bootstrapped for nearly a year before we entered into Y Combinator and then got a pre-seed round of £150,000. But because COVID hit and nobody was traveling, we had to pause and again bootstrap and change from a BtoC product to change our business model to a B2B2C one. After COVID we did another round, which we called pre-seed, because our pre-seed was intercepted by COVID, and that was £3 million or so nearly three years ago.

Interesting Shawn. Where did you get the company name from?

I'm actually not the best person in thinking up names. So, thanks to our network we had access to a free session on naming. By design, we didn’t want it to be about VAT, we wanted it to be about simplicity. The moment you make the payments, we're there to help you to clean up the money, and the money will be returned to you. So Revenir in French means return.

Who are your target customers? What’s your revenue model?

It's all about VAT refunds. The current business model is very inefficient and very complex and individuals and corporations experience a lot of frustration. We wanted to make the technology work for us and make what seems to be very complex, accessible.

We take a 25% cut of monies returned and that undercuts the industry average by 10% and with no hidden fees. I convinced my wife to try some of the incumbents, and when she had finally gotten over the stress of it, we figured out that she was charged 71%. But as an individual at the airport you're trying to catch a plane, there’s a long queue there, you might not have the right receipts. The moment you have the cash in your hands you don't worry about anything else. You're good to go. And so you don’t realise the charges. 

For corporations, it’s actually a market 30 times larger than for individual travelers. I consulted with a Canadian company early on and they didn't know how to claim back the VAT in Europe. Different countries have different taxation policies and it’s so fragmented. Plus, you often need to speak the local language as well. That company was forgoing the VAT returns completely because it cost them more to hire someone to deal with it. The majority of people just give up - it’s millions and millions of dollars left behind. 

We want to collaborate with our banking users and make sure that it's very transparent, a flat fee, and people, wherever they travel, will always get exactly the right refunds.

How big is the market?

From the retail sector, we're looking at $116 billion (or £100 billion) every single year left unclaimed by international travelers. In the EU alone that’s £33 billion. The incumbents are only processing 12%, so 88% of the world is underserved. And with corporations, the numbers are 30 times larger for corporate VAT expenses left unclaimed.

What kind of routes to market are you thinking about, Shawn?

I think that embedded finance has changed the landscape of individuals' personal banking and how they wanted to utilise their hard earned money. Revolut would be the perfect opportunity for us to add another great value added feature - enjoy VAT free shopping whenever you travel.

Airlines as well. For example, British Airways is in collaboration with American Express. High frequency travelers who love to purchase on their credit cards now have more perks if they’re American Express users. Not only can you enjoy lunch in the airport, but you can actually see your money coming back to you - maybe you can be wealthier than when you actually set off.

Do you think this is an example of the traditional systems being intentionally complex and it needs a FinTech to come in and chip away at that complexity?

I believe so. I think it goes beyond just the design complexity, but also comes down to the regulatory side. You have to navigate through a very complex and fragmented VAT process with significant difference between countries. Some countries don’t even call it VAT, in Canada, for example, we call it GST and PST. And for businesses, it's the same thing.

Without Revenir there is a threshold in which it's not worth it as a consumer. As an individual that’s maybe £50 or £100, for a business, maybe a couple of grand. Below that, it’s just not worth it.

The mission statement behind Revenir is simplicity - making inaccessible procedures in the process accessible for everyone. You don't have to queue anymore. You don't have to worry about all of the paperwork. You don't have to go to the till to make sure you have a VAT receipt. The journey is so cumbersome that we're trying to digitise it entirely.

How do you communicate that to banks?

That's the billion dollar question.

In today's world the tier-one banking system has been created for the sake of security and for preventing fraudulent activities. Traditional banking is structured in such a way that it is very difficult for innovation to happen. However, they still have to be profitable and they're looking for innovative ways to increase their card usage and bring their own card to the top of wallet. In my wallet, for example, I have six different cards and use different ones for different things.

What we can offer is a partnership with financial institutions, traditional banks, to share a commitment to customer-centric innovation. Because we are driven by cross border transactions, by design, because all of the purchase is made internationally we can then share our own part of the commission directly with the banking partner. In that way, we're actually increasing the bargaining power of the individual cardholders, because the banking partners can bypass the fees to the customers. We're directly bypassing the FX because we're collecting hard currencies from Europe and our customers are getting it to their Sterling account or US dollar account, so the FX can be presented very competitively because you don't have to make the FX to justify the business model.

The main partnership we can bring is to drive their uniqueness, innovation, and to help the banks increase their user engagement by bringing their cards top of the wallet. That's the main focus for us and we want to collaborate with as many financial institutions as possible to offer such a service.

I love this and if banks adopt this, it makes me love my bank at least for one or two weeks every year. If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?

As I'm in the UK, I would eliminate the love affairs with jargon. Financial services can be very intimidating. It took me a good ten years to really understand the ins and outs and the overuse of technical terms doesn't really help. We have so many young graduates wanting to join the financial services sector and I think a little simplicity will go a long way in making this sector more inclusive and accessible. I have seen so many people after a meeting Google all the acronyms they’ve just heard. Sometimes I would spend half an hour trying to understand what a meeting was about. So, if I had a magic wand, I'd probably start with that.

Where do you get your Financial Services/FinTech industry news from?

I’m currently using something called Morning Brew, where you select the different platforms you want to get your news from. The main sources for me are FinExtra and Financial Times so that I can get the financial leaders’ perspective, and understand where the market is going.

Can you list 3 people you rate from the FinTech and/or Financial Services sector that we should be following, and why?

• Jack Dorsey, the founder of Square
• Reid Hoffman, because I'm listening to the Master of Scale, his book about LinkedIn
• And Paul Graham, the co-founder of Y Combinator

What FinTech services (and/or apps) do you personally use?

 Recently, I converted from Monzo to Chase in the UK, because they offer a first year 5% interest rate. And also, part of Chase because they bought them, Nutmeg.

What’s the best new FinTech product or service you’ve seen recently?

 When I was in Canada, my first ever credit card also came with a cheque book and I had to use one, or sometimes both, of them to purchase anything. Nowadays, I barely carry any physical cards at all. When making a purchase the other day, Klarna showed up with a 0% interest rate. I can just select that and pay, it’s amazing! Imagine embedded finance that seamlessly exists in daily life, you don't need any education, it's just there. I think that is one of the best things to ever happen to FinTech - simplicity. Embedded finance has changed my way of banking, spending and saving. 

What is your message for the larger players in the Financial Services marketplace?

 Collaboration beats competition, period. 

By working together, all of the C-levels, the larger corporations, the city banks and all the FinTechs, we can create an ecosystem that genuinely benefits customers and the consumer. Let's innovate to elevate. We already have an ecosystem that is very trustworthy, that’s been designed to be a secure place and has earned the trust of millions of citizens. So give the FinTechs an opportunity to collaborate with you and bring that customer centric focus and innovation back to your customers. That is the key.

Thank you very much Shawn!

You can read more about Shawn Du on LinkedIn and find out more about his company Revenir at www.revenir.ai.