Wyre founder Michael Dunworth is $267m richer after selling his crypto start-up

Wyre was co-founded with Ioannis (Yanni) Giannaros, a software engineer who lived below Dunworth’s bunk in the shared “Hacker House” in Silicon Valley when he first moved to the United States in 2013.

It was a rented house full of cheap bunk beds, where aspiring tech founders and software developers paid $ 200 a night while trying to find their big opportunity.

Wyre uses blockchain-based technology to deliver fast cross-border payments to merchants, and sells a cryptocurrency-based payment application (API) programming interface that allows businesses to connect directly to a secure, regulated crypto-to-fiat payment infrastructure .

It has money transmitter licenses in 27 states in the United States and operates in China and Brazil.

Bolt, known for its one-click payment service for merchants, was valued at $ 11 billion in a round of funding in January and saw Wyre as a way to add support for cryptographic transactions to its services.

“Bolt is a holder in the payments space and they can see that the cryptocurrency is where the market is headed,” Dunworth said.

“They’re like Peter Parker, and we’re the spider that’s going to bite them, turning them into Spiderman.”

Washing Spider-Man’s clothes didn’t work for Mr. Dunworth, but cryptographic payments certainly did. Louie Douvis

It’s a superhero analogy that shows that the roots of Mr. Dunworth’s dizzying journey to success are still fresh in his mind.

After becoming friends with Mr. Giannaros, the couple’s first business idea was to dress up as superheroes like Batman and Spider-Man and do dry cleaning around San Francisco.

To their surprise, the business took off and they soon found themselves driving around town with a lot of washing and developing relationships with laundries.

But after a disastrous holiday, when all the laundries were closed and they were forced to put dollar coins into paid washing machines to complete their orders the same day, Dunworth knew this was not going to be his. great jump.

“I remember sitting outside the laundry, what the hell, what am I doing?” said Mr. Dunworth.

“Even though we could build a great app that coordinated superheroes to places, I didn’t want to set up a laundry company.”

At that time, online shopping solidified as a daily habit in America, and Dunworth and Giannaros saw the opportunity to develop a one-click payment product.

Snapcard, which would become Wyre, was founded in 2013 and the couple has built software that would collect a user’s purchases from stores like Kmart, Zara and Amazon in a single basket.

While the customer would only pay once for their various purchases, Snapcard would approximate the backend by paying all the different merchants and cutting 2 percent of the value of the cart.

The idea was new, and they soon had a fast-growing customer base.

“At one point Yanni had the best credit score in North America because we were buying everything on her credit card,” Dunworth said.

“I was buying things worth $ 100,000 a day and we returned them immediately.”

Entering crypto

At the time, bitcoin was emerging as a hot new idea among tech workers, and Dunworth thought of offering cryptocurrency payments as a novelty.

By blocking the purchase price, Snapcard would receive bitcoin payments through a Coinbase account (the founders were friends and lived on the road in Silicon Valley), convert it into US dollars, and then pay merchants, cutting its usual 2 percent. on the way.

Again, to the couple’s surprise, the lawsuit took off and Snapcard was introduced to the world of banking licenses and blockchain-based transactions.

It was 2013, and the price of bitcoin had just gone from $ 15 to $ 1150, and everyone who owned a cryptocurrency was more than happy to spend it online.

Anticipating the eventual slowdown as the price went down, Dunworth and Giannaros began building cryptocurrency wallets and began the laborious process of determining what banking licenses they should possess to facilitate cryptocurrency movements in the United States.

It was around this time that they launched Boost, a bitcoin-focused venture capital accelerator led by Adam Draper, who gave $ 10,000 in exchange for 6 percent of the business. Dunworth now describes a deal as “pretty good for them, right?”

But the $ 10,000 didn’t really take them too far, so in 12 months Snapcard needed to raise more money in its first round of seeds.

Although now venture capital flows much more freely, Dunworth found the process unbearable. He ended up sending emails to 2,300 different people, receiving 600 responses, which led to 100 calls, then to 25 meetings that served two checks.

“It’s so hard to raise money,” Dunworth said. “It’s the hardest process in the world, even harder because we weren’t Stanford students with four years at Uber. It’s impossible to overstate how horrible this process is.”

Eventually, they deposited $ 1.5 million, which allowed them to rent an office, even though the couple had two mattresses on the floor in a side room where they slept for three years.

Snapcard had already launched its cryptographic wallets up to this point, and Dunworth plunged headlong into the wild west of cryptographic regulation and his client’s knowledge requirements.

“The hard part is not taking money away from someone, it’s making sure they’re not fraudulent,” Dunworth said.

While it was systematically ensured that Snapcard complied with strict banking regulation on financial products, Dunworth and Giannaros decided they did not want to build a company like Coinbase, which offered brokerage and trading.

Its API system was born from the idea that companies around the world would not want to follow the strict steps of compliance, but could sign up for Snapcard and connect and use.

When bitcoin entered a bearish market around 2015, the Snapcard team realized that they had built strong rails to convert Bitcoin consistently and securely into whatever local currency.

Thanks to the global and instantaneous nature of the blockchain, Snapcard could begin offering cross-border payments to merchants dealing with manufacturers in developing countries such as Brazil and China.

As it stood, banks would take six days to settle cross-border payments, while Snapcard could offer the same day settlement.

“It was great, we just used the bitcoin network to do it instantly and freed up the cash flow for all these traders,” Dunworth said.

“And that industry was not at all susceptible to the volatility of the crypto markets.”

Snapcard changed the brand to Wyre, and Dunworth and Giannaros carried out a burst of growth that saw their technology support well-known cryptographic brands known as Metamask and Rarible.

Dunworth said Wyre’s success stemmed from detecting and resolving the issue that traders trying to work with cryptocurrencies did not want to go through the laborious licensing process just to offer cryptocurrency payments on their products.

The couple spent years acquiring appropriate banking licenses in several jurisdictions and built a cryptocurrency API that offers other start-ups fully compatible payment channels.

The business has also approached the boom in e-commerce and Amazon merchants using bitcoin and blockchain instant transfer technology to offer cross-border payments with fast-growing markets such as China and Brazil.

“There’s a lot of things in the right place, at the right time, but there’s also the hard truth that we built this iron-clad architecture with all the right licenses that, by touching the wood, hasn’t been hacked to date,” Dunworth said.

That growth and the $ 90 million Wyre recorded in revenue last year has finally led to Bolt, and it’s a $ 1.5 billion acquisition.

Dunworth said the decision to sell was not difficult as the start-up had evolved beyond its fast-growing roots and settled into a stable business. Also, Dunworth was ready to step back from the fight and move to Australia.

“Up to this point I was really powerless,” Dunworth said. “My mental health had been overcoming a beating for years and I was getting to the point where I had this huge impostor syndrome.”

Dunworth returned to Australia, with plans to stay for two months, but the relief of Wyre’s day-to-day setback ended with him and Giannaros took over as CEO during Bolt’s acquisition.

Ioannis (Yanni) Giannaros and Michael Dunworth of Wyre have spent the last nine years building cryptographic payment gateways and were acquired by Bolt for $ 1.5 billion. Photo taken in 2018

“We’re still working on what role to play in the new place Wyre has inside Bolt,” Dunworth said.

“But it all depends on Yanni and if she needs me there. If she does, I’ll come in. If she’s okay to go, I’ll take a break and play my old video games and try to remember who I really am.”

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