The shifty story behind FinTech-wonder WB21

Gastauer annoucing Berlin office
Gastauer annoucing Berlin office

The financial tech (FinTech) wonder, WB21, recently announced plans to move its central Europe office from London to Berlin, citing Brexit. Twenty employees would make the move and another 200 new jobs would be created.

A number of recent stories, written by contributors, and published on Forbes, the Huffington Post and Business Insider, have praised Michael Gastauer, the entrepreneur behind the startup, for his astonishing success.

Just last week, Gastauer spoke at Money20/2o, one of the world’s biggest events that brings together payment and financial services, in Las Vegas, Nevada. In his session, Gastauer was scheduled to “demonstrate real-time account opening and international payments using the blockchain…”

The company is said to be worth 2.2 billion dollars and to have one million clients. A remarkable feat considering the startup is only ten months old. And by the end of the year WB21 wants to collect 200 million dollars from investors and be put on the market by 2020.

These unbelievable numbers and incredible success are just that: Unbelievable.

The company, founded in 2015 in Switzerland, allows clients to transfer money around the world in just a few minutes, similar to TransferWise.

WB21 website "about us"“A minimum fee of $10 USD or 1 per cent of the transferred amount will apply,” the website, which is ridden with grammatical errors, said.

WB21 also opens bank accounts in different countries on behalf of their clients without them ever having to step foot in a bank.

Reportedly, the startup has already helped clients transfer at least 5.2 billion dollars. It took TransferWise four years to transfer 4.5 billion dollars. And that’s not the only perplexing claim.

WB21 reported having one million clients, but the official app, as of September 29, 2016, had only 100 downloads on Google’s Play Store. The software is not the most up-to-date, Gastauer said in an attempt to explain the low number of downloads. “Most of our clients come to us without using their mobile devices,” he continued.

A few hours after the interview, the app disappeared from the store; the iOS app was gone one day later. The android app reappeared on October 22, 2016.

If the majority of WB21’s clients use the website, the number of visitors should reflect that. The web-analytics service Similarweb estimated that the site only had 2,000 clicks during the entire month of May. Numbers first began rising in June. In August, Similarweb estimated WB21 had around 40,000 visits, but the number of unique visits is likely lower. These low numbers don’t add up if WB21 has one million registered users.

“More than 100,000 visitors every day,” Gastauer said. Similarweb estimated the average at 1,000 clicks per day.

Then comes the company’s assessed worth of 2.2 billion dollars. It is unusual for startups to be valued at such a high amount, unless there has been a recent financing round with generous investors. WB21 has been exclusively financed from within. According to Gastauer, the 2.2 billion dollar assessment comes from investment bank J.P. Morgan. J.P. Morgan declined to comment, the Financial Times reported in their Alphaville blog.

According to his own statements, Gastauer has invested 22 million dollars into his startup. The money he used came from the 480 million-dollar sale of a previous company, Apax Global Payments, which was sold to the Malaysian Banking Group in 2008.

However, the Malaysian Banking Group’s annual report makes no mention of an acquisition that cost the company nearly half a billion dollars.

Even curiouser is that WB21 advertises itself as a “digital bank,” WB21 actually stands for Web Bank 21. Yet anyone attempting to open an account with WB21 will note during registration that WB21 is “not a bank, but rather a payment service.”

And the company, according to Gastauer, is licensed by the Singapore Central Bank, but there is no entry in Singapore’s monetary authority’s register.

WB21 recently applied for a German banking license, Gastauer said. He also plans on upping the number of customers.

“We are currently investing in customer acquisition,” said Gastauer. “We are also planning several strategic acquisitions, among others in China.” He did no reveal what those acquisitions would be, only that “it involves a larger Bitcoin company with around two million customers.”

This article was originally published on Gründerszene.