Guy Kashtan On Co-Founding And Selling An $80-Million Remittance Company That Enabled Cash Transfers Overseas

In the bustling landscape of entrepreneurship, tales of success often emerge from the crucible of determination, innovation, and unwavering belief in one’s vision. Guy Kashtan’s journey embodies this narrative, traversing the realms of coding, corporate life, and ultimately, co-founding Rewire, a fintech startup aimed at revolutionizing remittance services for immigrants.

Guy reveals interesting details about his experiences with co-founding a company, navigating it through the challenges of COVID-19, and taking it through an acquisition. His venture, Rewire, attracted funding from top-tier investors Yehuda Zisapel, Migdal Insurance and Financial Holdings, Renegade Partners, and BNP Paribas.

In this episode, you will learn:

• Guy Kashtan’s journey underscores the transformative power of passion, igniting a path from coding enthusiast to fintech disruptor.
• Navigating the complexities of entrepreneurship demands resilience, which is evident in Rewire’s journey from humble beginnings to market leadership.
• Rewire’s success is a testament to the profound impact of prioritizing customer needs, driving innovation and market differentiation.
• Amidst the tumult of the COVID-19 pandemic, Rewire’s agility and digital-first approach exemplify adaptability as a cornerstone of success.
• The acquisition by Remitly epitomizes the alignment of strategic vision and cultural synergy, underscoring the value of trust and collaboration in corporate transactions.
• Seamless integration post-acquisition hinges on fostering a shared culture and ethos, facilitating a smooth transition for teams and resources.
• Guy’s reflections illuminate the importance of humility, resilience, and continuous learning, offering invaluable lessons for aspiring entrepreneurs navigating the turbulent seas of innovation.

 

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About Guy Kashtan:

Guy Kashtan is an innovative leader with an extensive background in product management development, technology and entrepreneurship.

He is an executive with a proven track record in initiating and building technology businesses.

Guy is an excellent strategic thinker with leadership capabilities in multiple disciplines. Currently, he is the co-founder and CEO of Rewire, an innovative cross-border international banking platform for migrants.

By leading with a hands-on approach and social-minded outlook towards customers and diverse cultures within the company, Rewire is becoming a global player in the cross-border payments arena.

Connect with Guy Kashtan:

• LinkedIn
• Crunchbase
• Bloomberg
• TheOrg

Read the Full Transcription of the Interview:

Alejandro Cremades: Already hello everyone and welcome to the deal maker show. So today we have an amazing founder a founder that they very recently actually you know like had his company acquired and we’re gonna be talking about that. We’re gonna talk about building scaling financeancing the rest a bunch of money prior to the acquisition.

Guy Kashtan: Um.

Alejandro Cremades: But some of these stories you know around the ah the journey like a founding the company what they did during the Covid times. What was that process like of going through that acquisition. How is life post acquisition and many other interesting stuff. So.

Guy Kashtan: I.

Alejandro Cremades: Be ready because today’s episode is gonna be quite inspiring and without further ado. Let’s welcome our guest today guy kashan welcome to the show.

Guy Kashtan: Um, hello. Thank you very much for having me and like.

Alejandro Cremades: So originally born in Israel and you grew up there in the suburbs you know of Tel Aviv so give us a walk through memory lane. How was life growing up.

Guy Kashtan: Ah, so growing up born and raised in Israel. Great childhood, great people, great food, great weather and growing up here I think was great on on all accounts actually.

Alejandro Cremades: And for you actually you know like you got into the whole thing of computers and I think it was like around the age of 4 you know as a teenager you were already coding what got you so hooked into the whole thing of of computers encoding.

Guy Kashtan: But ah, your people so from a very young age about four years old I already had my first computer mostly gaming at until the age of 13 and 14

Guy Kashtan: Where I started actually studying code as a hobby mostly I built a few websites I was actually even a professional gamer until the age of 18 main playing out a strike so I was mixing between school gaming and coding.

Alejandro Cremades: So then in in in this case for you I mean like anything you did the army for about 4 years but then once say once you came out of that and it was time to and go to school. You did a stint in the us you know you went to warton I mean for about six months or so so why the us.

Guy Kashtan: Probably think for them because I don’t think but technical permanent my personal. Um. So I studied computer science in an israeli university and the reason why I chose that specific university which is idc is for 2 main reasons 1 is exchange abroad specifically water in the us and the other is the entrepreneurship programs.

Alejandro Cremades: Why not staying in the Us and what happened next.

Guy Kashtan: Which I actually ended up participating in both and when getting to didduostpan I had the opportunity to study either computer science there or business so business was more interesting to me being at pen and I studied a lot of interesting things includ negotiations and otherwise which could have help like at the right point but we’ll get to that as well. Going back to Israel I also participated in the in the zelation program which taught me a lot what it would even mean to manage a startup at a later point which we’ll get through as well.

Alejandro Cremades: So so let’s talk about returning to Israel you know how was you know working for Microsoft because I mean once you got the computer science degree out of the way then it was time to work for the bigger guns and then how was it? How is it like you know working with Microsoft.

Guy Kashtan: Um, and so first of all they say and I agree that Microsoft is a great school. Definitely learned a lot that I didn’t actually learn at at university I actually started working at Microsoft while still in school so in Israel working part-time Microsoft is pretty common. So I studied worked there for the last two years of the degree. And then once I graduated I started working fulltime initially it was as a developer and at the later point as the product manager worked there for about 4 years before founding rewire with my 2 counders for Microsoft and 1 from father from the university.

Alejandro Cremades: So then let’s talk about that. You know you make your obviously you know your your your your most important people you know and your professional career. You know during that time you know at Microsoft and and walk us through what that process looked like of you know, being there and.

Guy Kashtan: Can things could be but and there is and for.

Alejandro Cremades: And then all of a sudden realizing like 4 years in I mean 4 years in I mean at this point you had the security was probably feeling good 9 to 5 You know you had your paycheck why complicating your life you know with venturing into the unknown.

Guy Kashtan: Um, yeah, it was never 9 to 5 even though there is better worldlife balance when you’re working for a large company. So know if Microsoft I would still work with Seattle which we’ll talk about more soon. I wouldn’t say it was 9 to 5 but and also at that part of like at that age which was about 26 27 security is not the main thing I was looking for. It was one which was always interesting for us is what type of impact can we create in the world second is. Growth opportunities. So I think when you start working at a larger company overtime you you grow, but over time it gets linear and I was I still wanted to be and I still am on a steep learning. So after 4 years at Microsoft actually I felt it was time to do something that’s challenging something with potential impact that we can drive ourselves. And I always knew that founding a startup is something I would want to do this is why I went to the entrepreneurship program as well. So I felt actually created enough security to take the time and even not have a salary for a while. So I felt it’s the right time and that I’ve learned enough in order to starve that journey.

Alejandro Cremades: So then let’s talk about the company. You know, let’s talk about when you guys you know finally decided that it was about time you know to get going. You know with with the business. So when you got started with rewire. You know how were those conversations you know with your co-founders. You know the.

Guy Kashtan: Make up.

Guy Kashtan: Of peopleation.

Alejandro Cremades: The the chats that you needed to have for that moment to arrive where you all failed that it felt good. You know to give the notice that it felt good to to to to go at it and take a stop at on entrepreneurship.

Guy Kashtan: Ah, course that so giving the notice didn’t necessarily felt good because I loved Microsoft I loved the team I worked with. But it did feel exciting to be on the and new path and on that journey and when when we started we we looked to many things that we could do and we talked between the cofounders at the time. We considered many many options and when we got to remittances which is again helping immigrants and families were sending money back home and over time additional financial services that was exciting for us because for the first time we saw a real customer with a strong need that we can support that is. Appreciated by that customer and then we took a step back to look at the entire market at the time we saw more than 250000000 migrants and immigrants across the world sending money back home supporting their families in many times the heroes of their families as well and serving that bigger purpose. While also having and a clear business potential was very exciting for us.

Alejandro Cremades: So then I guess say for the people that are listening. You know why didn’t that up being the business model of rewire. How are you guys making money.

Guy Kashtan: Um, so at rewire and and most remittance companies so we were always a worldedbased rebitance company providing more financial services for immigrants Beyond. And money transfer itself but money transfer itself is the business model so we would take a small cut of that money transfer and and when we started our price at the time was about half of the local competitors over time many competitors reduced the pricing to match and compete but we actually had. The benefit of creating a new pricing point at the market at that time and helping immigrants and their families. Even if they were not even served by us for that price reduction. But at the end of the day in readances. It’s about the foreign exchange fee and the direct fee for the transaction.

Alejandro Cremades: So then so then in your case, you know what were the early days like you know at what point do you realize that maybe you’re turning a corner on that they you know perhaps this thing has legs.

Guy Kashtan: Um, wow. So I feel like you feel that almost every couple of months but then you find the next challenge and then you overcome that challenge as well. I think the first time that was most exciting for you was. We just started the first customer we had which we helped send money gave us an envelope of cash so that we will send that money abroad for her when and when we’ve done that the next day she came back with 5 of her friend and 5 envelopes of cash with handwritten. With pencil under un envelopes the beneficiary information back back in the Philippines and that for me, that’s the first time that I felt not only is there a stronger need but it’s also pretty viral if we provide a very good service so that was one and then every time you raise more and more money and grow the team and grow. Business. So every success along the path feels like you turn the new corner and this thing has bigger legs than previously and then expanding to Europe at a later point so you get many many steps along the way but mostly through customer adoption and customer feedback. That would be probably the most exciting points where you get that positive reinforcement from the customers either by them using the product referring their friend which was the majority of our growth for the majority of the years and again business success all the time.

Alejandro Cremades: So then so then in this case, you know how was also the experience of going from early stage to growth stage you know from a life cycle perspective because I mean you guys did a couple of cycles too here and and I’m sure that that was quite the the journey to of going from early to growth.

Guy Kashtan: Um I a couple write? Yes, so so by now I’ve been in this industry of remit says and servicing immigrants of the families for more than 9 years and sometimes a good way. Do that like don’t you get tired the data etc. So my answer is definitely now. First of all what we’re doing is important so impact is exciting for us and second. Different areas had different challenges. So when you’re just starting in our case with a hunt with $300000 of an investment. It’s a whole different ball game where the founders do almost everything we had like 2 employees for for a while before we raised one point four million dollars and then you hire the First. Group of employees at the layport at later point when we raised $2000000 we started hiring a broader team including marketing so you stop doing some of the things that you were doing yourselves before and you manage at the later point for growth you start hiring managers sometimes you grew the previous people that you have to become managers sometimes you. Hire people externally and then when and a round when we raised about $12000000000 for the first time we went from about 30 people to 80 people. He says its own unique sets of challenges which I love having the different challenges along the path and especially overcoming the challenges. That’s obviously what.

Guy Kashtan: And we even like more people I like people.

Alejandro Cremades: So how was it like to put that in parallel with financing this I know that prior to the acquisition. You guys had raised you know about sixty two million bucks so how was that to how was how was going to the through the journey of raising money doing the rounds you know going from.

Guy Kashtan: And.

Alejandro Cremades: Different expectations from one cycle to the next I mean how how was that journey to.

Guy Kashtan: Um, so when you raise money usually there’s more Nos than yess that luckily you only need big give or take a couple of yeses every round. So round sometimes nervewracing you get no and I’ve known multiple times you understand why you it’ll improve what you’re saying so people understand it better or come back with better results as well. After some period of time. So raising money was sometimes easier at the beginning when it’s just you raise money based on the team and the general path. But then you raise money and an initial traction the more you get to a around or be ons then the expectation is more around the economics and traction and expectations moving forward. We did become harder but those who created more value eventually? um.

Alejandro Cremades: So in terms of the um, the financing to I mean this this leads me to the next question which is Covid I Mean as as you’re thinking about going through the rounds you know through the cycles whether it’s on the business on the financing ultimately Covid you know, brought everything to a screeching halt.

Guy Kashtan: I Hope um what make it a.

Alejandro Cremades: You know I guess say I like to hear you know like how did you guys go about you know this phase and and how did you guys handle the situation.

Guy Kashtan: So Covid was an interesting period for us. Ah interesting in the market in general and I think also luckily for us with our customers. The customers lead the service sending money back. Home is a necessity. It’s not something they choose to do. When they have enough money to do it. They do it every month regularly. So We had no doubt that the services that we are providinging are as needed if not more during this period. The challenge was with our employees moving to work from home fully working remotely. Even half of our employees had stationary computers. Not even laptops at the time so adjusting to that and then significant period of growth in customers as well and because our customers will deposit clean. Sorry can I answer that again. And social they go from the top I’m covided talking. Okay so starting So Covid was the very interesting period for us of both challenges of moving to work from home but also significant Growth. We’ve seen high significant monthly growth month. Month -on-month growth because our services were more digital than our competitors and during that time many immigrants couldn’t even leave their houses or if they were taking care of elderly people then they couldn’t leave them to the risk that they would cause them if they go out and then back.

Guy Kashtan: So we saw next show boom of digital adoption which I know many other companies in different industries have seen as well. But we have had that as well. We hired dozens of in employees in a couple of months all walking remotely was a period of time where I didn’t even meet you in place for more than six months

Alejandro Cremades: I Mean that’s crazy. So then you know like obviously that leads you to to? Ultimately what ended up becoming the acquisition to know which ultimately was the ah ah, successful outcome especially nowadays you know after the incredible growth. You know that remitably has gone through. So.

Guy Kashtan: Pick people every.

Guy Kashtan: Personally as but so so it got started by remmitly reaching out to us.

Alejandro Cremades: How was how was it like you know going through the acquisition you know for you guys? Well how did the process get get started to begin with.

Guy Kashtan: I have an investor that says that good companies are not being sold. They being acquired. So ideally, you don’t necessarily look for it but it comes and of course being having venture capitalists is part of our cup table that that was the path that we were also looking at but we’ve all always looked at. If we build a great company with deep technology and business growth then at the right time we’ll have an opportunity and that opportunity came throughmitily reaching out and starting those discussions around marched March Twenty two and it’s what to be all.

Alejandro Cremades: And did you guys know them before I’m a what war was it like a cold a email I called day Linkedin message. How did it come in.

Guy Kashtan: Um, so so it wast called email even though the person who managed them and at the time knew one about the recal so there was some familiarity but it was pretty much a cold email at the time we of course knew of repeatedly. The time of and leading player in the industry and we’ve always felt most similar to repate terms of vision and culture even before getting to know more of the people so when they reached out again and 1 of the only players in the industry to go through an ipo as well. Pretty broad in terms of financial activity which we can cover as well. We were pretty excited about that opportunity but we were also always told and part that acquisitions take time so it doesn’t go from an email to a sign and close deal within a mud. It actually took about. Actually almost a year from March Twenty Two to January first to to the beginning of January January to be cloth white but like it was about exploring an acquisition which was eventually signed in august.

Alejandro Cremades: Um, but what what was was it more like ah like a partnership a outreach. What what it was. You know, initially the discussion or was it like right away into hey let’s explore an acquisition.

Guy Kashtan: of of that year so for March do is when we had some email exchange then some meetinging some of them in Israel found them and and other sites that thatmit has and then it was eventually signed in August however, in this electulated environment that we are working in and you also need the legretos approval. For like that and then that went from August to about January where the deal was closed and closed and we all became out of remotely I like.

Alejandro Cremades: That’s amazing. So so for example I As part of this transaction when the company reaches out I mean Wocash Also you know for the people that are listening to really understand how something like this you know would pan out and how they could also implement it for themselves. No I mean is it like at that point you started discussions and then you would they.

Guy Kashtan: Nothing enough.

Alejandro Cremades: Discuss at a board level or you wait for the discussions to progress a little bit more and then you run it through the board. Did you guys use any bankers or anything to help you I mean walk us a little bit more through the logistics there.

Guy Kashtan: Um, yeah, so so we didn’t use any bankers. We did it all ourselves and outside. Of course you have many people walking through you like lawyers and accountant etc that you need their support. But not a banker or anything of that sort I kept our boat up-to-dated all time the way I see leading anything significant in a company is by being very transparent with your board of directors. So pretty early on we decided that specific 2 board members would be accompanying me to most of the of strategic decisions. And discussion but speaking with italy was mostly the founding team and the more those discussions matured the more people from the company we brought in but we also didn’t want to distract the company from its path of growth or even raising money at a later point because until deal a deal is science. It’s not closed. And at any point along that path what I kept telling the people that are walking on the deal as well on our side that we should look at that as fifty fifty so even though there were some days we fell it 80 and some days we fell it to 20 I kept saying that we should look at it. Fifty fifty because if you look at that as an 80% done deal then you ignore the rest of the path which was critical for us to continue managing so on 1 side pushing for the deal that we really believed in and believe interim inter remmity today.

Guy Kashtan: But on the other hand not losing sight of our plants which are growing and again becoming a most significant player independently. Um.

Alejandro Cremades: And I know that they it ended up being a stock deal which a obviously stock deals. You know can be a little bit day frightening right? because you know you have like certain disibility you know, obviously you don’t know where the future is going to go. It’s not as certain as having cash on hand. No. Now. In this case, it really worked out pretty nicely for you guys because when you did the transaction. It was about 2022 and then the ultimately the the stock of remotely you know has doubled right? So it sounds like you guys have done pretty well.

Guy Kashtan: Proper I want um and and and like.

Alejandro Cremades: And probably at the prices you know or at the peak. You know we’re talking about over one ah hundred and 60000000 type of transaction that ended up happening at today’s value of the business. So I guess when you do like a stock deal.

Guy Kashtan: And.

Alejandro Cremades: Ah, like this you know that is not just cash and cash. It’s very easy but with stock were there anything you know or any considerations or anything that you looked into to make sure that you guys were doing the right thing taking an all stock deal.

Guy Kashtan: So the the details of the transactions are public Italy being a public company. So I prefer a lot to specifically talk about the terms. But I’ll say that when you are being acquired by a company you need to believe in the company as well and that’s the more important thing in my opinion and even looking at the performance of the company. So.

Alejandro Cremades: Yeah.

Guy Kashtan: Again, it’s talking only from public reportings. So in qfo, the company had five point Nine Million customers active customers across the world which is 41% up from the same quarter the previous year. So this is just 1 example of the scale and and potential of the company. So again, it’s about. Trust in the people you work with trust in the company that you work with and the more we were integrated into the company the the more that became and real and the case.

Alejandro Cremades: That’s amazing. So then the deal happens you know, um, amazing. You know outcome there for everyone and then well how did the post integration happen.

Guy Kashtan: A.

Alejandro Cremades: You know because obviously obviously you’re you’re you’re still part of the company now today over immediately which is fantastic. No so I guess what? what? how? how would you say that an integration like this you know what? what are some of the things that you guys have taken into consideration to make sure that that integration would succeed.

Guy Kashtan: A.

Guy Kashtan: It’s it’s a great question and I can say that I learned a lot along this path before many of the leaders aremit including George and Matt were the co-founders and Mygos and 1 of the first questions that met the Ceo asked me when we met for the first time. But what was what is the culture at rewire which was initially surprised to me. No one I met that had financial interests in our company in the past they investors and otherwise would probably wouldn’t even ask me what the culture but definitely wouldn’t ask me that as the first question. And today almost a year and a half into being part of remedity I think that our culture cultures like bothmit today and previously rewire is probably the number 1 reason. Why the integration between the company has been as great as it was I can I can show that one of the leaders at the company recently told me a very experienced people told me that this is the smoothest acquisition that he has seen now. It’s made my fast and only one so I can’t compare but I can tell you how I feel which is at home. 1 of the weekly values is be an owner and you know for me that that feels the same as it was when we were the actual owners at Rewire. So we care about the company. We care about omission and we believe in what we do, but we believe in the people around us and we are now actually way more.

Guy Kashtan: Power to be successful on the path that we were on before so we’re actually continuing the same vision and path or similar vision and path that we had before but with a lot more opportunities with more people to learn from which is mutual as Well. So Pretty excited about both integration and the path moving forward.

Alejandro Cremades: So let’s say now I put you into a time machine guy and they and I bring you back in time to that moment. You know, let’s say in 2015 where you were thinking about giving the notice at Microsoft and let’s say you were able to show up.

Guy Kashtan: A.

Alejandro Cremades: Right in that moment where you’re walking out of the ah building of Microsoft and you’re able to stop that younger guy and and be able to to to get that younger guy to sit down for a coffee and during that time you’re able to give that younger guy 1 piece of advice before launching a business. What would that be and why giving what you know now.

Guy Kashtan: And um and tackle the.

Guy Kashtan: A whole lot between local.

Guy Kashtan: Um I think I probably wouldn’t have spoken to that guy I Wonder if anyone ever answer so that and the reason is that I think ignorance is a least first of all I think not knowing some of the challenges ahead. Is important to even be on a path I think like initially when you just asked that I I thought telling something like everything would be good like continue on this path. Do What you do. But I think even that overconfidence is not something that is good like you need to move in confidence. But you also need to. Be concerned with what may happen in other cases or I think it’s about balancing and looking back. You know one of my favorite sentences is high inside is always 2020. Yeah, there are small and different things. We could have done differently along the path. But maybe we wouldn’t have gotten to where we are if we would have gotten done those things better all differently and sets I’m very happy with where we are I would just like look from the side. Be excited about that long journey that that guy is going to go through and not say anything.

Alejandro Cremades: I Love it So guy for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

Guy Kashtan: So think Linkedin is a great way to do so and pretty responsive there and yeah, that would be great.

Alejandro Cremades: You see enough. Well hey guy. Well thank you so much for being on the deal maker show today. It has been an honor to have you with us.

Guy Kashtan: Um, thank you very much appreciate having me.

*****

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