How a laptop and a phone changed the world: RationalFX

With £20,000 and a computer, Rajesh Agrawal and Paresh Davdra started the first online foreign exchange service, RationalFX back in 2005. Paresh Davdra speaks to GrowthBusiness about how the business started out in uncharted territory, and what the future holds as competition heats up.

Paresh Davdra and co-founder and current Deputy Mayor for Business Rajesh Agrawal built a multi-million-pound company that makes it easy for businesses to transfer foreign currency online, and for private customers to manage payments overseas.

What makes RationalFX different from the hundreds of other money transfer and FX firms is its first mover advantage.

Identifying the growing prominence of the internet at a time of relative stagnation in the finance sector, Davdra and his partner set up the first online foreign exchange platform to cut red tape and make transferring money overseas faster.

“Forex companies don’t have a USP to compete against each other. I can’t say that our dollars are better than another forex company’s dollars. But why customers come to RationalFX is because we’re a trusted player in the game and we provide a good service, and that’s why we have a string of around 80,000 private clients and business customers,” Davdra explains.

Here’s how RationalFX grew over the last eleven years, after weathering the financial downturn and growing pains.

Location: Canary Wharf, London

Date Launched: 2005

Number of employees: 100

What does your business do?

RationalFX is the UK’s first online foreign exchange service – to date we have transferred over $10 billion in payments and served over 80,000 private clients and business owners.

Where did the idea for your business come from?

Working in FX, Rajesh and I identified a gap in the market for an online service. This got our brains ticking and we set about building a business model. We moved out of London into a small flat in Brighton and with just one computer, one phone and a small amount of money RationalFX was born.

How did you know there was a market for it?

With over $14 billion worth of FX traded on a daily basis, London is the world’s largest FX trading centre and it was clear the market needed something like RationalFX. We identified a spike in people’s interest for buying property overseas and knowing foreign investors will want to exchange currency, got in touch with estate agents who would then recommend them to us – in return they paid a small commission. From there, it was word of mouth that helped snowball the company and bring in customers.

How did you raise funding, and why?

When we first started, we were a pair of 20 something’s with no money so funding was tough. We were continuously turned away from banks until Rajesh was given a £20,000 ‘car loan’ which got the ball rolling.

With a turnover of $1.9 billion in 2015 and expectations to increase this to $2.6 billion this year, we are proud to still be a private company.

Describe your business model in brief.

RationalFX acts like a wholesaler of money, exchanging a customer’s money in return for a fee. Customers choose RationalFX over the banks because they exchange money at a more competitive rate.

We buy in bulk and achieve very competitive exchange rates, then taking a very small margin and passing on the saving to our clients.

What was your first big milestone and when did you cross it?

Our very first transaction – it might not sound like a lot but it was assurance that we knew what we were doing.

What advice would you give to other entrepreneurs?

Take risks and commit and persevere. When a good opportunity comes your way, grab it with both hands. Don’t worry about being perfectly prepared because you’ll learn a lot along the way.

Where do you want to be in five years’ time?

Five years is a long time, and at the moment I’m just enjoying the now. The industry and tech itself is ever-changing and moving forward we don’t want to just keep up with the changes; we want to innovate, improve and add value so that we can hopefully be part of shaping the industry for the future.

If you weren’t an entrepreneur, you would be…


What is your philosophy on business or life, in a nutshell?

Don’t forget to take stock in both – it is the easiest way to miss an opportunity or a memory.

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.

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