December 21, 2021

Sonect, the revolution of the expensive cash industry

In this interview, we will discover more about the start-up with Marco Bolgiani and Fabrizio Centrone, IAG Champion in this investment, and Sandipan Chakraborty, Founder and CEO of Sonect.

Sonect is a Swiss company that converts every store into an ATM. It reduces cash distribution costs for banks and facilitates in-store cash management for merchants through an on demand location-based service. Users of the platform can withdraw cash from any participating store using a smartphone. In June of 2021, Sonect closed a €4,65 million funding round led by Italian Angels for Growth (IAG), which opened the investment vehicle to Doorway fintech platform investors. Other foreign investors and family offices also participated in the round to facilitate the company's international expansion.

“What is Sonect, and how was it born?”

Sandipan: What UBER is to Taxis, AirBnB to Hotels, Sonect is to ATMs. We are revolutionizing the expensive cash industry by making it highly efficient.

I often forget to visit ATMs and never keep cash in my wallet. On a snowy Friday evening, I watched a neighborhood Pizzeria selling a Pizza while putting money in its cash register – at the same moment when I needed cash urgently to pay our babysitter. While taking an arduous journey through the snow to the nearest ATM about 600m away from my house, an idea was born – why is it not possible to withdraw cash at shops where other people still pay cash?

“What is and what does a Champion IAG do?”

Fabrizio: During the selection and valuation of a start-up, the Champions support the IAG community to make better choices, applying their skills and competencies. Sharing professional skills allows us all to invest in businesses and industries in which we do not have specific and deep knowledge of and, therefore, diversify our portfolio.

In the early stage, the champions can also help the start-ups in gathering the funds, either through the introduction to funds and family offices or explaining to third parties the rationale of the investment and giving an independent view on the company’s strategic evolution.

“What value do you recognize in Marco and Fabrizio? How important is it to have good investors on your side?”

Sandipan: Both Marco and Fabrizio are extremely well-connected senior executives who brought the necessary capital and are helping open a lot of new doors on both investor and customer fronts. I still remember how much they challenged us during the due diligence process, but that helped us immensely prepare for our next big financing round. In addition, their close engagement and advice solving some of the critical business challenges are truly an asset to any business.

“What value do you recognize in Sandipan and the Sonect team? How important is the entrepreneurial ability of the founders to the success of a start-up?”

Marco: The most straightforward truth any investor in a start-up knows is that there is no successful start-up without the “right” team in place. The difficulty is understanding what “right” means in each specific start-up. We think Sonect’s CEO, and co-founder have developed the right skills and competencies to build trust with investors, key staff, and co-founders. A strong, intimately rooted belief in your business idea is vital but must walk hand in hand with listening to outsiders’ advice, which is what BAs can offer to a startupper.

“In the second quarter of 2021, the company signed an agreement with TWINT, Switzerland’s most popular payment app. In Italy, you have signed, already last year, a partnership with one of the top 5 Italian banks (which still prefers not to be named for the moment). What are your future goals?”

Sandipan: We have set some ambitious goals for ourselves as we aim to provide easy access to financial services to anyone anywhere through our phygital (Physical + Digital) network of ATMs. Expansion to multiple other EU markets is in the making while we wait for our license in Mexico. We are also working on an exciting new product that will simplify the cash circulation problem even further.

“After support in the early stages, how does Champion’s role evolve in the story of a start-up?”

Fabrizio: Based on our experience so far, we think Champions could be helpful in the development of the market and in the management of the company. For the development of the market, the Champions’ relationships can help introduce the ‘idea’ and the company representatives to potential partners and clients. Also, the expertise and deep knowledge about a specific industry/region can help suggest a go-to-market strategy. On top of that, sharing the managerial experience could be useful for more effective project management and dealing with operations issues. We are also sure that Champions can be very useful in future fund gatherings and preparing the exit.

“Fintechs disrupt banking as they release app-based digital platforms that upend how consumers think about financial management, from loans to stock trading to payments and beyond. What do you think the future of the industry will look like?”

Marco: Both Fintechs and Banks have known for long now that they are not fighting each other, but they need each other. Fintechs often bring new solutions banks cannot develop internally. Banks own access to the market Fintechs cannot survive without. There are, of course, a few Fintechs that are building their market access without relying on banks, and they are highly successful. These few may threaten some traditional banking business … or widen the meaning of what we call banking.

Sandipan: I believe many basic banking services will be commoditized soon. Fintechs make banks collaborate, and if you have a win-win business model, it can help create a network effect quickly, which benefits both the fintech and the banks. That’s why I think Fintech integration is the key to success for the future banking industry by placing the customer at the center of everything!