Innovation award category winner: Coindrum offers homegrown solution to foreign coins problem
The start-up company is of the finalists in the New Frontiers category
Lucas Decker (left), founder of Coindrum, has developed a way in which travellers can use leftover foreign loose change by exchanging it for duty-free shopping vouchers.
One of the great frustrations of overseas travel is the loose change in foreign currencies that builds up over time. You can’t change it in a bank when you get home and it usually ends up gathering dust in the back of a drawer somewhere.
Coindrum, a start-up company founded by entrepreneur Lukas Decker, has developed a solution to this problem which not only gets rid of the useless coins but offers travellers something worthwhile in return for them.
In a variation on a theme of the change exchange machines operated by some retailers, which take coins from shoppers in return for a voucher to the value of the coins less a service charge, the Coindrum machine actually gives shoppers a voucher worth 10 per cent more than the value of the money deposited.
Coindrum can do this because of the deals it strikes with its duty-free shopping partners. The machines are located in airport departure halls and the vouchers are only redeemable in airport retailers. “We help solve an inconvenience for customers while helping to drive shopping traffic to retailers,” Decker says. “We help customers spend money in duty-free shops by providing them with vouchers. A key success metric for airport retailers is the footfall in the airport and we help convert this into a higher percentage of shoppers.”
He explains that the voucher will generally only represent a small proportion of an individual shopper’s actual spend in the duty-free shop. It prompts them to make a purchase which they might not otherwise have made.
“The shopper might deposit €5 worth of coins in the machine and get a voucher for €5.50 to spend in the airport shops’” he says. “But when they go to use it in the shop their actual spend might be €50 or more. It’s a win-win for everyone: the shopper gets rid of their coins as well as extra money in return for them while the retailer gets a customer they might not have had.”
In other words, the value bonus is in reality a discount offered by the retailer.
The idea for the innovation came to him on a trip to Italy. “I am a frequent business traveller and I understand the inconvenience of carrying large numbers of coins around. I was in Italy a few years ago and I had to have coins with me to throw in the bucket to pay motorway tolls. The lightbulb moment happened in the airport when I thought about how solving the problem with coins could also drive shopping opportunities.”
That was just the beginning. “Once I had the idea, I had to develop the technology,” Decker says. “I had a great technology partner in Scan Coin who helped with that. I was also very fortunate to have Declan Ryan, the co-founder of Ryanair, as my first funding partner.”
The first Coindrum machines were launched in a trial in Dublin Airport in 2014.
“The trial yielded very exciting metrics from a location in the airport that didn’t look very promising. That led to us winning the world’s largest duty-free company, Dufry, as a customer. They have 1,300 outlets in 65 countries around the world and they are responsible for one in four duty-free transactions globally. We launched with them in Milan airport and we have since expanded into Faro airport in Portugal. ”
The success of the service has been mirrored by the company’s fundraising efforts. “We have just completed our latest funding round,” says Decker. “We were looking for €1 million but within four weeks had €2 million on offer from a range of investors. We have a great mix of amazing people on board as funders.”
These include Declan Ryan who says: “Lukas and the Coindrum business is one of the best start-ups I have seen come out of Ireland. Coindrum has great growth opportunities through many airports globally.”
Nicole Junkermann, whose previous investments Songza and RelateIQ were acquired by Google and Salesforce respectively, says, “The beauty of Coindrum is in its simplicity and its international scalability. It’s one of those ideas where you immediately think ‘why hasn’t anyone done this before?’”
Coindrum backer and board chairperson Bobby Healy adds: “The concept, metrics and ambition of the team made this an easy investment decision. I believe this will be another great Irish success story in travel tech.”
And the retail partners appreciate it as well. “Dufry’s size means that any solution that drives better commercial results and is scalable is of interest,” says Dufry vice-chairman Andrés Holzer. “Coindrum definitely falls into that category. Coins were neglected in the past due to their comparatively low value. It took Coindrum to show they can be used as a psychological trigger to outspend their value at the tills.”
Decker intends scaling the business internationally as quickly as possible. “Just 10 companies have a 60 per cent share of the global duty-free shopping market between them. That means we only need a handful of customers to gain a large share and we are talking to all of them.”