Decoding Transak's Success: An Exclusive Interview with Co-Founder Yeshu Agarwal

From Code to Crypto: Yeshu Agarwal's Journey to Web3 Mastery

In the rapidly evolving landscape of blockchain technology and cryptocurrencies, few stories captivate the essence of innovation and resilience like that of Yeshu Agarwal, co-founder of Transak.

From his early days as a software engineer and serial entrepreneur to becoming a pivotal figure in the Web3 space, Yeshu's journey is a tapestry of challenges, insights, and triumphs.

In this exclusive interview for our "Behind the Startup" series, we delve deep into Yeshu's path to co-founding Transak, exploring the motivations, hurdles, and successes that define his remarkable career.

Ishan Pandey: Hi, Yeshu. It's great to have you here for our “Behind the Startup” series. Could you start by sharing your journey from a seasoned software engineer and four-time founder to co-founding Transak? What motivated you to pivot into the Web3 space?

Yeshu Agarwal: Back in 2011, when the world was just beginning to whisper about Bitcoin, I found myself intrigued by this novel digital currency. Even then, the wheels in my mind were turning, considering the potential of using Bitcoin as a payment gateway for a personal SaaS app I had in mind.

But, like manpy early ideas, it remained just that—an idea, as my focus drifted elsewhere. Fast forward to 2013, the year when Bitcoin mining was on everyone's lips. I revisited my earlier thoughts about Bitcoin, feeling a pull towards this burgeoning field, but again, I wasn't fully committed. It was a pattern, this dance of coming close and then stepping back.

However, deep down, I knew that my path would be different, that I would not simply walk the well-trodden path. Since the beginning of my career, I've always had a knack for building things myself. There's a certain kind of joy in creation, a thrill that comes from bringing an idea to life. This led me to dabble in micro SaaS projects and other ventures during my school and college days. Seeing the reactions of friends and family when I shared my creations was the fuel that kept my passion burning.

However, not every venture was a success. Before my foray into Web3, I launched two companies. The first was ill-timed and misaligned with the industry's needs—it was like trying to build a rocket when all I needed was a skateboard. My focus was more on the building aspect than on fundraising, which eventually brought me to a financial dead end in 2016/17.

It was around this time that the crypto market was booming. The trading aspect of cryptocurrencies, especially, caught my attention.

I started with algorithmic trading and soon realized that I could build trading solutions for others. With a small team of 2-3 people, we developed an MVP, named Coinally—a platform akin to Bloomberg for crypto trading. This time, I learned from my past mistakes. Instead of aiming for the stars with a 'rocket,' I built a 'skateboard'—a simpler, more manageable project. I also focused on fundraising, a shift that proved fruitful as my LinkedIn connections ballooned from 1K to 10K, and I secured some initial funding.

Thanks to the funds we raised and a lot of hard work by the team, our success led to an acquihire. For me personally, I look back on this as a watershed moment after years of financial struggle. In my new role at LCX, I was offered the opportunity to meet major industry players such as CZ, the CEO of Binance. As the new CTO of LCX, I gained invaluable experience, but after one year, I felt the itch to take on bigger challenges.

By 2019, my sights were set on future projects. I had traversed a path filled with ups and downs, but each step was a learning experience, shaping me into the person I am today. It's a journey marked by resilience, adaptability, and an unyielding desire to carve my own path—a journey that led me to the exciting and uncharted territories of Web3.

Ishan Pandey: In 2019, you identified a gap in user-friendly onboarding solutions for Web3 apps. Can you elaborate on how this realization shaped the inception of Transak?

Yeshu Agarwal: Following my time at Coinally, in 2019, I embarked on a journey to discover the next big thing. During those months, I engaged with customers and immersed myself in the crypto conference circuit, where peer-to-peer (P2P) transactions became a prominent topic.

In India, a significant hurdle emerged as regulations prevented banks from facilitating P2P transactions, creating a major barrier for end users in purchasing cryptocurrencies. Concurrently, the rise of applications like AAVE and Instadapp, alongside others, marked a peak in the decentralized applications (dApps) and decentralized finance (DeFi) sectors. However, the onboarding process from exchanges to these dApps was overly complicated and chaotic.

Reflecting on my experiences at my previous company, I recognized how time-consuming administrative tasks, such as securing licenses and dealing with banking, detracted from product development. This insight led me to focus on creating a decentralized on-ramp solution.

During this development phase, I attended Devcon Osaka, where I met Sami Start at a pitching event. Sami was presenting a similar on-ramp concept, but with a greater emphasis on compliance and regulation. Our first meeting was a meeting of minds, sparking the idea of a collaborative effort. With Sami in the UK and myself in India, it symbolized a global partnership tackling a global challenge.

Since my youth, I've aspired to undertake endeavors that create substantial impact and value. While earning money, as achievable through algorithmic trading among other means, is feasible, my true ambition lies in making a real difference in the world. This ethos was the foundation of Transak. Sami and I quickly established a daily dialogue, combining our efforts to build this venture. His prior experience at Smarkets and deep understanding of the challenges we faced brought everything together, cementing the beginning of Transak.

Ishan Pandey: Transak has a unique B2B2C business model. How do you balance the needs of both your business clients and their end-users in this model?

Yeshu Agarwal: Our business model at Transak mirrors that of PayPal. Reflecting on my experiences with PayPal, particularly during my time with previous SaaS companies, I recognize a similar operational flow. Customers typically register, complete their Know Your Customer (KYC) procedures, and then utilize the service for app payments or money transfers. Notably, PayPal extends support services for both customers and developers.

Similarly, at Transak, we follow a parallel approach. We handle KYC, compliance, banking, and offer support to both customers and developers. Our organizational structure includes two main teams: the customer support team and the integration support team.

The customer support team is dedicated to addressing the top ten user inquiries, which range from KYC to order fulfillment and other related issues. We prioritize providing superior customer experience (CX) and support.

The integration support team, working in conjunction with the sales department, focuses on our partners and businesses that use Transak. They gather feedback and requirements, which are then communicated to our management, product, and engineering teams. This process ensures we maintain a balance and continually adapt to our users' needs.

Transak operates primarily as a B2B2C company, but we also engage in B2B2B and B2C models. Our core focus is on B2B2C, offering products like on-ramps, off-ramps, and NFT checkout solutions. This diversified approach allows us to cater to a wide range of needs within the cryptocurrency and blockchain ecosystem.

Ishan Pandey: The integration of your platform by major players like MetaMask and TrustWallet is impressive. What strategies did Transak employ to achieve these successful partnerships?

Yeshu Agarwal: In the early days of Transak, the team was just Sami and me, with Sami handling Sales and myself overseeing the technology and product aspects. I vividly recall the journey to onboard our first customer, which took about a year. This initial partnership was with MetaMask, where Transak became one of the first on-ramps. Since then, especially with the closure of SendWyre, Transak has emerged as the longest-standing on-ramp in the Web3 space.

Our breakthrough came during ETH Denver where also Transak made its debut in February 2020. We were actively engaging with various participants, and it was there that we connected with MetaMask. By focusing on understanding their specific challenges, we tailored our approach to meet their needs, developing solutions based on their requirements.

The year 2020 marked a significant expansion for us, as we forged numerous other partnerships. We maintained a momentum of introducing a new feature each week, simultaneously securing major deals.

As our sales team grew, with Alessandro being one of the initial members who now leads growth, we generated a considerable number of leads. Our sales strategy has always been driven by technology, and with a sales team of just 4-5 people, the impact we’ve made in terms of partnerships has been substantial. Today, Transak is integrated into all the top wallets including Metamask, Ledger, Trust Wallet, & Coinbase Wallet; and has collaborations with major gaming infrastructure companies like Immutable and Animoca Brands, among others. This success can be attributed to our focused approach and the ability to understand and meet the specific requirements of our partners.

Ishan Pandey: Transak's journey from its initial funding in March 2020 to the recent Series A raise of $20 million is quite remarkable. What key factors contributed to this successful fundraising journey?

Yeshu Agarwal: I wouldn't attribute our success solely to fundraising. While it serves as a benchmark of our progress, I believe our primary focus has been on recruiting exceptional talent and executing the necessary tasks effectively.

One of the pivotal factors in our journey has been our willingness to delve into the less glamorous aspects of our work and ensuring we have the right leaders in place. From our initial funding stages to Series A, we successfully onboarded key Heads of Departments (HoDs), including our invaluable COO, Siraj. Additionally, we brought onboard Rajat and Sharad to lead our Engineering and Product teams, and assembled an exceptional tech team.

The critical achievement, however, was forming a cohesive team that transcends the boundaries of mere colleagues; it's a tight-knit family. It's heartening to hear how our team members view the company as an extended family.

A significant turning point was establishing an office in Bengaluru, which fostered stronger connections among team members, especially after the challenges posed by COVID-19. This geographical expansion accelerated our progress in product and technology development.

Despite our distributed teams, with sales in Europe, compliance in Europe, and other teams across the US, Hong Kong, Dubai, and more, we actively ensure that team members continue to interact, share feedback, and maintain a collaborative spirit. This open communication has greatly contributed to our ability to build and manage effectively.

Even during challenging market downturns, our team remained steadfast; their unwavering belief in our mission, akin to a family's support, was evident. This sense of unity and resilience has been a driving force, allowing Sami and me to tackle the less glamorous aspects of our journey with confidence. Our people are undeniably the cornerstone of our success, and their commitment has been the true backbone of our fundraising journey.

Ishan Pandey: As a CTO, how do you ensure that Transak stays ahead in technology, especially in the rapidly evolving blockchain and crypto domains?

Yeshu Agarwal: At Transak, we uniquely position ourselves at the intersection of Web2 and Web3, bridging these two realms. As CTO, a key aspect I emphasize is fostering a strong interest in Web3 among our team members. It's important for our product managers, team leads, and those involved in tech and product development to understand and empathize with the challenges and needs of our users and partners. By being actively engaged and interested in crypto, our team is better equipped to identify pain points and build more effective solutions.

To stay at the forefront of technology in the dynamic blockchain and crypto sectors, we focus on two main strategies:

1. Encouraging a Strong Interest in Crypto: I believe that a genuine passion for crypto within our team is crucial. When team members are naturally inclined to explore and understand the crypto world, they become proactive in identifying problems and taking ownership of their work. This enthusiasm translates into a more intuitive and user-centric product development process.

2. Exposure to Industry Trends and Challenges: We actively send our team members to conferences and industry events. This exposure is vital for staying abreast of emerging trends and challenges in the industry, such as Account Abstraction. Understanding these developments enables us to adapt and innovate continually.

In addition to my role as CTO, my responsibilities extend as a co-founder, where I often bridge various operational aspects of the business. I am fortunate to have a Head of Engineering who joined us from Paytm over two years ago. With more experience in people management, he has been instrumental in building a robust product and supporting our growth.

A core belief at Transak is in collective learning. We encourage all team members to continually acquire new knowledge and skills. This ethos of learning together, rather than working in isolation, is a cornerstone of our approach to maintaining technological leadership in the fast-paced blockchain and crypto environment.

Ishan Pandey: The launch of the NFT Checkout and Transak One are significant milestones. Could you share the technological challenges and innovations involved in developing these products?

Yeshu Agarwal:

NFT Checkout:

Technological Challenges:

• Cross-Chain Compatibility: Developing a product that seamlessly works across multiple blockchain networks presented a significant challenge. Ensuring compatibility with various chains required extensive technical expertise.

• Security: To maintain a high level of security and prevent fraud and unauthorized access, robust transaction automation was necessary. Addressing potential double-spending issues in NFT transactions was crucial to safeguard user assets.

Data Handling: Collecting and processing large-size calldata from partners to execute transactions on-chain presented technical hurdles, especially when dealing with cloud service restrictions on header size.

Innovations:

• Multiple NFT Purchases: Enabling users to buy multiple NFTs in a single transaction was a notable innovation. This streamlined the NFT acquisition process and enhanced user convenience.

• Token Support: Offering support for any token listed on Transak expanded the possibilities for NFT purchases. Users could transact with a wide range of tokens, providing them with flexibility and choice.

• Low Transaction Limits: Implementing low transaction limits, as low as $0.01, made NFT purchases more accessible to a broader audience, fostering inclusivity.

• Smart Contract Freedom: NFT Checkout removed smart contract restrictions, allowing for more versatile and customizable NFT transactions.

Transak One:

Innovations:

Fiat Onboarding to Smart Contracts: Transak One introduced a groundbreaking feature by enabling users to onboard to any smart contract with fiat currency. This innovation marked a significant step in the cryptocurrency industry, offering limitless use cases such as staking, depositing, trading, swapping, liquidity pools, subscriptions, loyalty programs, and more.

Multi-Token Support: The product was designed with future scalability in mind, allowing support for multiple tokens in a single transaction. For example, users could deposit both ETH and DAI into a two-sided liquidity pool, enhancing the efficiency and versatility of cryptocurrency operations.

These technological innovations in NFT Checkout and Transak One reflect Transak's commitment to providing cutting-edge solutions that address user needs while pushing the boundaries of what's possible in the crypto space.

Ishan Pandey: From your perspective as an entrepreneur in the Web3 space, what are the biggest challenges and opportunities you foresee in the near future?

Yeshu Agarwal: From a development perspective, Web3 is at a stage akin to the early 2000s in tech, with user experience (UX) being the most significant barrier. Recent advancements, especially in side chains, are addressing these UX issues, paving the way for broader adoption. Concurrently, increasing regulatory measures, while challenging, are crucial for preventing scams and illegal activities, thereby building trust in the system and facilitating mainstream acceptance. Navigating these regulations and continuing to innovate in user experience are pivotal for the future growth of Web3.

Ishan Pandey: Regulatory compliance is a major aspect of platforms like Transak. How do you navigate the complex regulatory landscapes across different countries?

Yeshu Agarwal: Navigating complex regulatory landscapes across different countries is indeed a critical aspect of Transak's operations. We prioritize regulatory compliance to ensure the safety and trust of our users. Here's how we approach this challenge:

• Dedicated Compliance Team: Transak maintains a dedicated compliance team that constantly monitors and stays updated on regulatory changes worldwide. This team includes legal experts who specialize in cryptocurrency and financial regulations. We have our compliance teams across London, US and India.

• Global Licensing: We have obtained licenses and established entities in various countries where we operate. These licenses allow us to legally provide our services in compliance with local regulations. Transak was the first on-ramp to get the prestigious FCA license in the UK and is the only global on-ramp with the FIU license in India. Additionally Transak has the VASP license in Poland and is actively applying for other licenses across the globe.

• Continuous Monitoring: Regulatory environments are dynamic and can change rapidly. We keep a close eye on developments in each country where we offer our services. This proactive approach helps us adapt to new regulations and make necessary adjustments to our operations.

Ishan Pandey: With Transak's expansion into 160+ countries and support for numerous cryptocurrencies, how do you manage and maintain the high transaction success rate and security standards?

Yeshu Agarwal: Oh, we’re absolutely thrilled about our expansion and the positive feedback, especially from partners like MetaMask! Our secret? We believe in going deep, not just wide. This means integrating closely with local payment rails in each market, which ensures not just competitive pricing but also smooth, efficient payment flows through trusted local financial solutions. And then there’s our unwavering commitment to risk management and fraud prevention.

Even though we’re a startup, having raised our Series-A less than a year ago, and with a team of under 100 people worldwide, we place a huge emphasis on compliance and security. Our compliance team is almost as large as our engineering team, tirelessly refining our risk engine to guarantee a safe and stable purchasing experience for our users.

This dedication to security has been recognized by our financial partners, allowing us to enjoy higher conversion rates due to the reduced risk associated with our transactions as we do not support gambling or adultery projects. And of course, we stand on the shoulders of giants, working with established partners known for their prowess in processing fiat transactions.

Lastly, I can’t overlook our liquidity operations. They’re the unsung heroes ensuring that crypto purchases are swift and available 24/7. We’re in sync with a wide array of market makers, crypto exchanges, liquidity providers, and OTC desks to secure the best prices and deliver crypto efficiently to our users’ wallets.

Ishan Pandey: Could you share some insights into Transak's approach towards competition in the on/off ramp service sector and how you differentiate yourselves?

Yeshu Agarwal: In the highly competitive on/off-ramp service sector, Transak adopts a distinctive approach that sets us apart from the competition. Rather than fixating on our competitors, we concentrate on our own strengths and what we can uniquely offer to our users.

One key aspect that differentiates Transak is the passion and expertise of our team. We have a team of crypto enthusiasts and experts who are deeply immersed in the world of cryptocurrency. This inherent passion drives us to continually improve the user experience, not only for Ethereum but across various Layer 1 and Layer 2 solutions. Our commitment to staying at the forefront of crypto technology allows us to provide innovative solutions.

A prime example of our innovative approach is our NFT checkout feature, which simplifies the process of acquiring digital assets, even for users with limited crypto knowledge.

Another area where Transak excels is in providing direct on-ramps into smart contracts. We are prepared for a future where financial transactions and commerce operate on smart contracts, and we actively contribute to shaping this future. Our platform enables users to seamlessly transition between fiat and crypto, even when navigating complex smart contract routes.

Furthermore, Transak boasts the best conversion rates in the industry, a fact acknowledged by multiple partners. Our commitment to maintaining clean payment rails contributes to this success. We understand that users primarily consider two factors when purchasing: pricing and transaction speed. Transak offers competitive pricing, supported by multiple licenses and entities, and provides access to over 20 different payment methods.

Our emphasis on tech-driven sales is another key differentiator. We prioritize delivering a robust integration experience, a feature well-regarded by our partners. Many of our partnerships have developed based on positive feedback from one partner to another, demonstrating our commitment to providing exceptional integration support.

Ishan Pandey: Finally, as we look forward, what's next for Transak? Are there any upcoming projects or goals that you're particularly excited about?

Yeshu Agarwal: The year 2024 is set to be a pivotal year of growth for Transak. After laying a solid foundation and assembling a capable team, our focus is now on elevating the company to a new level, aligning with the Level 5 leadership model outlined in the "Good to Great" book. We recently partnered with Immutable, a leading gaming infrastructure company, and are highly optimistic about the potential of Web3 gaming.

Our current efforts are geared towards optimizing our platforms for this emerging sector. We aim to provide conversion rates that are among the best in the industry and are refining our KYC systems to make gaming purchases in Web3 as seamless as using Apple Pay. Our goal is to deliver a smooth, intuitive onboarding experience that is comparable to the best in Web2.

In addition to gaming, we are also observing similar trends in other sectors like wallets and decentralized finance (DeFi). We are actively collaborating with our partners to ensure we provide a seamless onboarding experience in these areas as well. This year is all about building on our past achievements and pushing the boundaries of what we can offer in the Web3 space, particularly in enhancing user experience and broadening our reach across various sectors.

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