The Ex-Revolut Lead Building a Neobank for Everyday Europe

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We got it. Joel from Bleep. How are we doing today, sir? Hey, guys. Thanks for having me. All good. And you?

We are doing great. Love diving into the the wonderful world of neobanks. I kinda gave you a brief intro, I think you heard, but kinda let people know who you are, what you were doing before, and why are you building Bleed? Yep.

So as a quick intro, my name is Xiao. Before starting to build Bleep, I was building the card product at Revolut. So I was there for around four years building cards globally. So from Europe, Singapore, Japan, Australia, US, Mexico, Canada, Brazil. So everywhere in the world where the card product is live, that's what I was doing.

After Did you cross Rob from Dew at all? Yeah. Was a Of course. No. You guys worked together. Yeah. Yeah. So Rob Rob joined, I think,

two couple of years after me, but I still got caught him there for, like, a year and a half. And, actually, when I was raising money for for Blip, that's when he was raising money for Duo, so we spoke quite a lot.

It's nice. It's nice to have people who are kinda in the

fundraising journey together. We can kind of, like, be be in that. It's awesome. That's awesome. No. I would say it was useful as well from extended, but that's all more like a DEX, like a hyper liquid competitor. I was also raising money at the same time, so it was, like, three or four people exactly at the same time raising money on the crypto side and definitely getting from Revolut when raising money is very, very helpful because, obviously, there's so much support from people that have done it before.

But, yeah, basically, after I decided to build on the I wanted to build on the DeFi space, stablecoin space, really trying to target the I was trying to prove a thesis actually, and the thesis was it's possible to build a better fintech if you are building on top of stablecoins or on top of DeFi, and that's what WIP is all about. So we are trying to bring these better outcomes in things that we think customers really care about, retail customers in that case. And for us, we are super focused on savings.

So we think it's possible to have a higher a better savings if we are building up on chain. And for us, that's higher yield at relatively low risk. We are talking about trading. We think it's really good to build a trading product that's completely on chain where you're able to trade tokens, ETF, like tokenized stocks, ETFs, real world assets, everything in the same UI.

And then on the remittance side as well, like, are now building something super exciting on that part, but we think it's a really good way for you to move money across borders to use the stablecoins to do the cross border part and just do local settlement that you're able to send money abroad faster, cheaper, and at for way more countries than you're able to do it with Swiss, for example. And that that's the sort of intersection where we are.

So retail customers meeting blockchain products without knowing that those are blockchain products, just knowing that those are better products for them. What so you're at Revolut. Walk us through, like, again, Revolut,

titan of industry, you know, great product, part market fit. What did you see that kinda made you want to spin out and say, hey. We're gonna attack this problem differently. You know? Because, again, in some ways, could say your competitor, big dog, you know, underdog. But, again, you can do things as the newer startup that Revolut can't do as nimbly. So what did you wanna specifically attack that you felt Revolut wasn't positioning themselves well to to to to build? Great question. Yeah.

That's a very, very good question. So I think where I saw

so where did that where did I start to see these crazy opportunities that I really couldn't ignore was I was doing global expansion, right, like for the card product. So let's say I need to set up cards in Mexico. And for me to set up cards in Mexico, this means that I also need to build corridors in Mexico in a way that users are actually able to move money there so that they are then able to pay with a card.

And when you are setting up these corridors and you are working for like six months and your output is basically, you're now able to send money from Europe to Mexico in two days or in one day for a 1% fee, and that's actually like an accomplishment compared to the industry standard. And then on your personal side, you are sending money with stable coins everywhere in the world instantly. You start to figure out, okay.

There's clearly a way that we are doing things here that if it was done different, could be done way better. So in this case, like, sending money abroad could be done much better if you are doing it on top of Stelicons than if you are doing it on top of the Swift technology that was invented in 1970. Right? But when we started to build this in 2023, like, of course, now there's all these hype about stablecoins and the things that you can do. But back then, this was not the case.

This was seen as a bit of a risky play, let's say, of how to leverage a bit of a niche thing. So there was really not a lot of openness to build or even willing to try this at the end of the day, this is, you know, classic innovators dilemma. Right? So that's that's one component of it. The second part that I was really interested on that would never be possible there is I really like this concept of the like, are building an uncutiable wall at the end of the day. Right? Of course, we have carbs.

We have all of these services around it, but, like, the core thing is there's a seat rate, and you're able to export it. You're able to take care of it yourself. Because I really believe that building on top of these decentralized pledges is really the best way for you to build a financial app because ultimately, 5,000,000 on it and 10,000 or 10 other companies are building on it. Like, we are just reaching this ledge. Like, two p becomes like across all of these competitors. So I think that's really cool idea.

And but then I it goes completely against everything that the traditional fintech is because there, the moat that you build is the licenses that you're building around the world. And basically, if you are sending money to customers from the same fintech, it's instant. If you're sending it to to other syntax, it's not gonna be an it's not in their best interest that let's say that that moat kind of disappears.

While in our case, like when you're building on top of stable coins, like everyone can build, they can send money everywhere. So I think traditional syntax are never gonna go that direction. Like syntax that has built this moat around, okay, we are live in '20 or 40 countries. So we inside these 40 countries inside our walled garden, everything is already instant. Why would they ever build on top of a decentralized network that is often exactly that is competing against that? So I really thought that not that's it.

Like, it was not really a direction they could go for both innovators dilemma. Like, it was not big enough the opportunity. And on the other hand, it's it's completely it's competing against the moat they've built around themselves. Right? So,

yeah, I think that's why why I really do it had to be done somewhere else. When it comes to self custody, this has been a topic we've we've brought up a lot recently. I'm sure you're following it. Some things have gone on with x in this in this world. And I think, you know, philosophically, we don't need it to go into, like, the benefits of of that. We we've dove into a few times.

But I'm wondering, practically, when you say that users can export their keys and take it into maybe another self custody style in the Eubank, Do you think we're actually seeing people do that? Or, like, how many people are actually signing up for Bleep and bringing in their own wallet in there, and then now they're you know, they can just import all the stuff? Or is is the user behavior right now? It's, hey. Actually, I come to Bleep.

I wanna make a new wallet, and it's more of a peace of mind feature that I could take my wallet with me if I need. What what are you seeing there? So I think customers don't care at all.

I don't think Did that unfazoo? Did you think that would be the case? No. No. I think that I always assume that would be the case because who who wants to sign up to be their own security specialist? Who wants that extra responsibility? I don't think anyone wants to have that. However, and this is the part that is really interesting. Self custody can be done in a UX where the customer doesn't necessarily know it's self custody. Like, for example, we don't have access to the customer funds.

They exist all like, only the customer is able to access those funds directly. And but we don't do this because of the customer necessarily. We do this because this is this solves one of the biggest problems in fintech. So the biggest problem you need to solve when you're building a fintech, like the most extensive one is geographical expansion. You go into a new country and you're saying, okay, I'm gonna keep these people's money on my side.

And once you say these words, the regulators say, that's all fine, but that's the regulating activity. So if you wanna keep money from customers on your side, which means that if you go bankrupt, the customer is gonna has a negative impact. You are going to require a banking license, an EMI license, whatever type of license the local country has.

And this means that every new country you launch, you need to pay $10,000,000,000 more or less like this, the cost of hiring a local team, acquiring a certain license, getting the product up and running. When I go into a new country, we don't own customers' funds. Like, I just don't have it. So you are immediately outside of that regulator regulation threshold. You are a less risky enterprise from any regulator point of view because if LIP goes bankrupt tomorrow, the customer still has the funds. Right?

And this means that I just need to worry about basically how do we exchange those funds, like how to provide the on and off rent, let's say, which is a way less regulated activity like a payment service provider compared to a bank activity. Right? So that's the the main reason why we did it. Of course, I think from my personal point of view, I think it's great that it's non custodial.

But from a company point of view for global expansion, that's the actually, one of the coolest things that you can build with DeFi is if you're able to make that experience work, if you are going to derisk the whole thing because you're never gonna require a banking license or a Myanmar license because you simply just don't have customers' balances with you. Like, you're not at risk, so that wasn't actually the main reason why we did it.

So now how do we contrast this with you got Mika licensing, and you're Mika compliant. So was gonna ask you to we see that. That's the We're also getting licensing. So we're No. But but it's a decent type of license. And actually, Mika was a big a big win for us on the licensing part as well because we are we can onboard customers. When we onboard a customer to our wallet, it's not unlicensed activity. When a customer is trading with us, it's not a licensed activity.

When a customer is putting deposits into a into a DeFi wallet, it's not a licensed activity. Our MICA license, the only thing that allows us to do is to convert fiat to crypto and crypto to fiat. And we use that for what? For when customers want to offer ranking multiple currencies, like we are launching multiple currencies. We have the euro and the MXM. We are launching BRL, which is Brazilian real very soon.

And for that user experience where we wanna give you the same experience you would get in a traditional fintech where you just click next and it's all happening in the background. That's why we got this Mika license. But for the activity of you come to blip, you deposit a thousand USDC. You then invest them with your saving vault, you trade, like, we don't need them license for that. And you are not onboarded into any sort of license for that.

The reason why we got the MICA license was really we wanted to provide the we wanted to provide a smoother experience. So for example, one thing that the MICA license allows us to do that our competitors can't. When you are paying it with a Blik card, the balance comes from your and also wallet. It gets converted on the file. If I didn't have that license, I would have to use a provider. Like, I would have to do an experience maybe more similar.

Like, with Range, for example, they've been here where you first need to off ramp the ballast into a vault or you need to off ramp it into a different vault or into, like, a card. You top up the card and then you spend. Right? Because you first need to send it to that provider, then it's gonna convert it. But because I can do that part myself, I'm able to create this better experience where the same balance that you can use in DeFi, you can use it with to send to other wallets.

You can also use it with a card, all of this happens in the in the background. A user doesn't know. Right? But those that was the only reason we went for it.

What what are some of the features that you find most compelling to the users and and those who are using Bleed today? What are some of the, yeah, the the unique value adds that you're finding are maybe both? And if they these are the same, that's great. But maybe, like, one, what is bringing people to the platform? And then what are you finding actually keeps people around and keeps them sticky?

So we have two types of customers. One type is the crypto customer. Like, we all like like, we are, right, people that are working around the crypto industry or they are super comfortable with crypto. We know how they top up. They bring USCC to the platform. That's the main currency they have. So that's one type of customer. And then we we have what we call the retail customer. We identify these people because they never connect textable wallets, meaning they never stop up from Metamask.

They never bring money to a Coin Bay from Coinbase to Coinbase from Metamask. Like, they just come with euros, and then they start exploring. Yeah. What we've seen in these retail customers that we think is really, really interesting is what bring like, when we used to we used to have high yield savings vaults, we just relaunched them actually silent launch them today and relaunched them Friday as high yield savings. Like, high yield, I mean, 70% in yield.

But when we have these working, we had 30% of retail customers who were using the high yield saving vault. And it was one of the main reasons that these people were coming, and those were the CTS customers. And the average deposit there was around $4,000 that they were putting in these vaults. And also what I found really interesting, like, are in Europe. Right? So we have vaults in euro paying, I think it was 3.5%, vaults in dollars paying around eight to 9%.

And most of the people who are exchanging the euros to USDC or the euro v to USDC, and then making the deposits in the dollar as well. So I I found it very interesting that people were okay with the FX exposure. They really just wanted a higher yield. So for retail customers, Savings Vault is definitely the it's the PMS that crypto has found already and that we are pushing again finally.

And then for the for the future customers, the reason people come to us is really think our top up experience might be the best one in the market right now. Like, you're able to top up directly from MetaMask, Phantom, and it does that thing where it jumps between wallets. You can top up from any chain one to one instantly. Like, again, we provide use our nickel license to do this bridging from any chain into arbitrary, which is the main one. Like, it's super easy to add.

And then for you to spend this USCC in euro or in any other currency, we also have the best fee in the market well, the best effects in the market. So we don't really charge any fee, and we are passing you through the Mastercard rate, which is for the main currencies like Euro, GBP, PLN, DKK. Here in Europe, they are sub 30 bips, like, maybe 20 bips that Mastercard is charging on some, but, like, USCC to Euro Mastercard charging, I think, is three bips on others. So it's really, like, that's mid market rate.

You don't get that anywhere else. Right? So that's the main reason people use this. Of course, we also have some decent cashback offers. But for the big users, like, at the end of the day, what really makes the difference is super easy to pop up, and there's no fees real like, there's actually no fee. We provide the exchange rate, and we are just passing through from Mastercard. So it's really a great exchange rate for you to spend here in Europe in the all of the main currencies.

Drew, I don't know about you, but I just we actually have we've heard probably the opposite on our last few news segments that

are caring less about yield. I And think it just really is depends on, like, who are you serving? What GRU are they in? What currencies are they coming in or out of? I think, like, one of the big ones that we've talked to recently is is Moto, and they're on the side of where people actually aren't caring as much about yield as we thought. They care more about, like, luxury perks, zero They're all they're also going after, like, extremely high end user base.

It's like, I think, yeah, having a really deep understanding of who you're going after,

what they care about. It sounds like when you try to find retail, these are, like, you know, working class typical,

you know, would you say younger? I just do younger, or how old are This was super surprising to me. Our the average age is with 38 years old. So I would say 38. Course. But I was I was expecting something like 20, but no. Actually, skews 38. It skews to college educated. What we see very decent jobs here in Europe, so I'll say upper class. And I'll say that our main competitors there are Trade Republic, ARBA, basically the fintechs that offer the ECB bank rate. We are offering much higher than that.

So but it's not it's not a crypto customer. It's a person that it might have heard about crypto, maybe as Ethereum, some crypto, like some Bitcoin or something in Revolut, but it's not a customer that uses Binance or Coinbase. It's a very I got surprised because we do some user interviews, and it's customers that I would expect to be on a way more conservative profile like, conservative profile. And, no, actually, a lot of people, especially in Europe, I can guarantee these.

Like, they are really looking for high yield savings accounts. Like, what's what's the low risk investment grade saving account that I'm able to that they are able to access. And we see this, for example, Trade Republic, the deposits they have is much higher than Revolut even though they are, like, one seventh of the customers. Right? They have 80% less, and they have a higher deposit rate because they were pay they were paying 50 bps more on the deposit rates than Revolut was in euro. Right?

And just 50 bps made all the difference for, like, almost connects. Like, per customer, it's wild, the amount of deposits that these guys were able to get. So so yeah. But the real question is, does

Revolut have, it looks like, Brad Pitt as a spokesperson?

I don't know what this is about, but I just I just get old to stop by now that I thought it was Oh, mate. Zach, do you wanna you wanna move into rapid fire? Yeah. I was I was just gonna do we've been,

yeah, we've been doing this series. It's been really fun with Dakota. Dakota's moved from they originally started as, like, a financial application and treasury management tool that companies would use, and now they're they're going, like, deeper down into the stack into more of the kind of underlying infrastructure, neobanks and folks building things like we'll be looking to hopefully lean on.

So we're we're working with them to expose and kind of explore how people in your position are building the the companies you're building, the tools. So we have we have we have a few semi not not super spicy. They they started really spicy, and then we've we've dialed it back. The worst question we have is, like, what what is one part of the infrastructure that you would rip out and replace with something else? Know, that went away. For zero, and some people were just like If

I say this, like, there's no way that if that person sees this, they don't know who I'm talking about. So the other ones are more versus, like, build versus buy type questions. Yeah. Yeah. So first one, what's one thing that you built in house that you'd buy today if you could?

Oh, I don't think I would ever outsource anything of anything since I feel like I'm but I'm always been going up the direction of in store, like, do it in house as much as you can just because every time I outsource things, it's another company's problems I need to deal with. So I don't think we we were never too aggressive, let's say, on the things that we outsource,

building house, like, the contrary. So I'll say nothing yet. So nothing yet. So what about is there anything that you bought that if you started over, you would build? What

can I say here without compromising myself? No. I'm kidding. Risk engine Maybe the by risk end sorry. Sorry. Engine. Okay. Yeah. We we started by outsourcing the risk engine. And then when we got into these licensing parts, it was so much harder to explain how the thing works than if we have done it ourselves. And in the end, we just had to build so many oh, we had to add so many manual fixes on top of that so that it was regulation ready that I think it definitely would be worth to just build it from the start.

Like, okay. It will be a more we need to do some more transaction monitoring rules, etcetera, but we invested, like, four or five weeks, and that was almost how long it took to integrate the Do do you think the risk, like, payment risks and user risks and fraud and, like, that and the whole conversation around that is one of the most crucial things to get right for someone building a neobank right now. Would you say that's one of the most important pieces? I would say it depends on where you are regulated.

In Europe, 100%. Like, the use case that we are serving, so what what's are we trying to build? We are trying to build a fintech to compete with traditional fintechs, period. And we are building that out of Europe. There's plenty of other fintechs around, and, basically, our survival really is going to depend in us being able to keep these licenses, provide you crazy good experience, and that are able to compete to those fintechs.

If you are serving customers in geographies that nobody else dares to, I'll say risk is definitely super important as well. But, clearly, your risk, your willingness to to risk is much higher than there. So maybe you are in a region's fiction where it's more lenient there. I'm not sure. But, yeah, from Europe, say definitely risk is the thing because regulation is here, and it's quite detailed on what you can and can't do.

Last one because the the you kinda did a two for one with your answer there, so that's actually good. The other one was what's those buy verse bill versus buy decision you'd redo? But okay. This is probably a good one. What is the one layer that an NBIO bank should never outsource? That you're just you see people and you're like, we're we're over indexing here. This should not be outsourced. This needs to be built in house. This is gonna sound

so contrarian to what everyone else is doing. So maybe I'm wrong. So outside of that disclaimer, maybe I'm wrong. I don't think you should outsource the integrations part, for example. And what I mean by that is I'm building on shame. So I've built my own wallet. I then integrated that wallet with all of the DeFi protocols. Let's call it manually instead of building on top of someone that is doing that.

Just because I really believe that everything else, like on and off ramps, like all of those things are going to become a commodity. Right? And when it's the commodity, the person with the least, I would say, the person with the best UX will win. The person with the least middleman will also win. Right? Because it's a commodity. Like, your price is just gonna be better.

And if you are building this Frankenstein monster where even the the core thing that you're building, which is the UX with the customer, it's outsourced, then you're just a distribution player. And that's great, of course. Like, if you are great at distribution, but it's also crazy high highly competitive because then you think you're just assuming everything's gonna be a commodity, and it's just about that final part of distribution.

So I think outsourcing that core UX piece, which means the wallet with all of the integration that you're able to do cross chain, that's something I'll definitely never do. I'll build that in house because you really can build experiences that other people can. It really does work much better if you are doing it natively instead of building on top of someone, building on top of someone. And at the end of the day, you are able to pass the savings into the customer.

So I that's something I would I see everyone doing, and maybe I'm wrong in the end. We went another direction, but I'm super happy with our eWEX. So they didn't get a long run. I get proven wrong or right, then TPP. But Yeah. It is interesting the last twelve months seen the commod the commoditization

of many parts of the stack. Does that surprise you in terms of, like, all of these things becoming

essentially raised to the bottom in terms of financial pricing, or has that been something you've expected? So, actually, I got I was very surprised by the opposite because when I got when I got started, I remember we had to build our own on and off ramps because I couldn't find a player that was able to convert euro into a euro stablecoin instantly at a decent fee. And decent fee, I mean, less than 10¢. Because this is this is something that exists for issues for a fintech.

You're never gonna do this part of the dedicated iBand from the start or the accounts from the start because you're able to acquire like, acquiring the funds from the users via bank transfers normally is the like, is the basic part. Like, this that already exists. So that's a commodity. Right? Like, having an account that a merchant account that customers are able to fund, you run your app on top of that. And then in crypto, this unit exists, like, two year two and a half years ago.

I had to build it myself because there was really just no one providing me server instantly and for for and for the price that now that exists pretty much everywhere. But I think that's what's the effect because if you look at fintech industry, like, that's the first thing that's get commoditized, like, money in, money out. And then you just build normally the fintech playbook that is that one. Right? You build with Frankenstein, Monster with Visa, Mastercard, Swift, SEPA, ACH provider, Open Banking.

You put it all together into your own ledger. Right? And then you build this experience on top that you control the experience, and that's how you add value. Then you start to vertically integrate when you want to compete, right, that's the the fintech playbook. Here in in crypto, we were missing that initial layer that you can build on top so that you can focus on your core ledger or in your core app experience.

So, yeah, I think and that's why I also I find it super weird that in the crypto, we are going to the commoditization of the the core app experience. So the wall creation, the wall interaction, like, all of those things are being commoditized as well. Like, in fintech, that was the the differentiating factor was you being able to create this experience for users that people really just love, like Cash App, Venmo, like all of these other players.

We gotta pause. This was fun. I feel like we we could go another easily another thirty minutes on this. This is so fun. It's it's great to get into your mind and see how you're building this, and we want to thank you for these insights. Hopefully, it's blessing a builder who might be a little earlier in their journey. The pie of opportunity here is so big. So hopefully, it inspired someone out there building building something new. Thank you for your insights. We'd love to have you back on the show.

And, yeah, if there's any other ways that we could work work deeper together, let us know. We'd love to we'd love to think through that.

Thank you, guys. And, yeah, actually, I'm super happy because I think I messaged you guys, like, eight months ago, so I'm super happy that I agree enough to pop out in your feed. We made it work. We made it work. Thanks for following along. It's great to finally meet you. Thank you, and great job on your side as well. I've been following you back along. I didn't think you're doing a great job. Thank you. Appreciate that. Appreciate that. Thank you, man.