Buy Heureka Conference 2019 Tickets


Startup Tickets

  • Lazy Bird - €125,00
  • Standard - €149,00
Buy Now
€299 EXCL. VAT

Service Tickets

  • Lazy Bird - €375,00
  • Standard - €449,00
Buy Now

Student Tickets

  • Lazy Bird - €55,00
  • Standard - €75,00
Buy Now

Serial founder Jeremy Allaire has a new project and he’s bringing it to Germany Written by Christine G. Coester on 25. October 2016

Jeremy Allaire, the entrepreneur behind Brightcove and AllaireCorp, is bringing his most recent venture, Circle, to Europe. Launching first in Ireland and Spain, the app, which is already available for download, is set to soft launch in Germany within the coming months.
Allaire, in a light blue, collared shirt and navy suit jacket, told us how his team – “120 people with Macbooks” – is moving Circle forward and how fintech is changing for the better.

What is Circle?

After becoming “obsessed” with cryptocurrency in 2013, Allaire and his co-founder Sean Neville, were convinced the digitalization of money was “as big of an opportunity as the web was, over a 10 to 20 year period,” he said.
“There is going to be an http of money,” Allaire went on.
He described the Circle app, which lets users “send and receive money and make payments to anyone in the world with zero fees,” as a non-bank.
“We’re regulated as an e-money issuer, almost like a bank. We can hold people’s money, but we cannot offer savings products or lendings.”
Simply put, Circle cannot earn money with other people’s money.

How does it work?

“Money is really just data, records called euros or records called dollars and money transfer is basically synchronizing those records,” Allaire said. It’s a cheap process, he explained.
Other banking systems are closed and proprietary, whereas Circle uses open internet standards, including blockchain, “a type of distributed ledger, comprised of unchangeable, digitally recorded data in packages called blocks.” Blockchain is also known as the basis for the cryptocurrency Bitcoin.
These data structures ensure the security of – and consistency across – these records. Especially important as the “meaning of these records have societal implications,” Allaire said.
For each currency, be it yuan, rupee, euro or pound, Circle requires a banking partner, but those partners are invisible to the consumer. And while the company does not charge for international transfers, they make a small profit, between .2 to .4 per cent, on transfers between currencies.
Circle is prepared to lose money for quite awhile, he said.

How is Circle different from other money transfer services?

“We want to make money work the way the internet works for consumers,” Allaire said.
By that he means consumers should be able to transfer money in the same way that they can chat with someone on their cell phone or send an email anywhere in the world – all without paying fees.
The Circle app lets users link their accounts, debit cards and credit cards and send money to anyone, anywhere. They can even transfer money via iMessage, the iPhone messaging platform.

Is it secure?

Entering the European market means ensuring the startup meets EU-wide regulations, like consumer protections, guarding customer identity and transaction monitoring. Circle uses machine learning and artificial intelligence to manage risk.
Approximately 90 per cent of risk assessment is made using artificial intelligence, Allaire said.
The third generation machines take into account an individual’s IP address, geographic location, spending habits and velocity of purchases and even check a person’s name and address to available public records. All of these factors are aggregated, allowing for decision making and risk assessment.

What’s the end goal?

Allaire, who has always been fascinated with cryptocurrency, wants to create a family of products built around managing money, but “I don’t know that we’ll ever call ourselves a bank,” he said.
Once the company establishes a strong foothold in P2P, person-to-person, payments, it is adaptable to B2B, business-to-business, Allaire continued. Meaning profitable opportunities are on the horizon.
The startup is currently backed by approximately 125 million euros (136 million USD) from investors like Goldman Sachs and IDG Capital Partners, according to the Circle website.
At the moment, it seems that regulatory hurdles could be the limiting factor as Circle expands its reach. The technology is relatively new and there is an effort to build a consortium for blockchain. However, progress has been slow.
For Allaire this isn’t a problem. He maintains, he’s excited to work closely with regulators and governments.
“Projects that are large in scale and complexity are some of the most rewarding to work on,” he said. “I’ve always been motivated by building things that can change the way the world works.”