Sir Gavin Williamson, the former UK education secretary, was recruited by influencer-backed virtual card payment fintech Lanistar because of his knowledge of Africa, says its CEO.
Lanistar’s appointment of Williamson, an MP and former Westminster power player albeit one dogged by controversy, to its advisory board came out of the blue in November last year.
Jeremy Baber, Lanistar CEO, explains the thinking behind the appointment of Williamson, who was introduced to Baber by two individuals: Lisa Cameron, the MP and chair of the Crypto and Digital Assets All-Party Parliamentary Group, and a member of the Payments Association.
Baber says:
“Obviously he has got a wide-range of experience from the political arena but actually he’s also got a lot of knowledge about one of our future target regions which is Africa. We saw him as a good opportunity to give us advice on which particular regions within Africa to target.”
Perhaps not known to many, but the Yorkshire-born MP’s interest in Africa dates back to his days as a student and friendships he forged while a minister. More recently, he unwittingly became a national hero in Somaliland, after championing its campaign to be recognised as a sovereign nation.
The topic of Williamson comes up as Baber gives Tech.eu an update on Lanistar, the fintech now looking to make a name for itself in Latin America, after its well-documented Icarus-like fall in the UK.
Baber, a loquacious Welshman, wants to talk about the present and the future- and he has a lot to talk about.
Brazilian play
Lanistar is currently making a play in Brazil, with further launches planned in Colombia and Argentina in May. Yet it still has an eye on a return to the UK market and the EU.
“I don’t believe those markets can’t be touched. I just think we have a better opportunity in Latin America right now to grow big, and therefore bring those learnings back into the UK and the EU later on this year,” says Baber, who was appointed Lanistar’s director of banking in 2021 before becoming CEO publicly in early 2022.
It launched in Brazil in mid-2022, where its play is an influencer-backed virtual debit card, targeting the millions of Gen Z’s and Millennials in Latin America.
Its customers can make purchases online or via Google Pay (and soon Apple Pay), relationships it can leverage into other markets.
The app is also integrated with regional payment solutions Pix and Boleto. It also has a cryptocurrency function, allowing Brazilian users to buy and sell Bitcoin, Ethereum, and other tokens directly from the app.
Lanistar is not a bank but offers its payment services through banking-as-a-service provider Bankly in Brazil.
Going gangbusters
Currently, it has only 68,000 customers in Brazil but Baber says it’s about to go gangbusters in the country when it unleashes its influencer “roadblock” marketing campaign.
This will see its 1200 social media influencers (who promote the brand in return for shares) in the region, including footballers Willian and James Rodríguez, simultaneously exalting Lanistar on Instagram and other social media, temporarily blocking out rivals like Revolut.
Lanistar says around 3,000 influencers have shares in the company – spread across 100 different countries.
The “roadblock” will go iive in the next few weeks, once Lanistar has got its Apple Pay integration certified, which “has taken a bit longer than expected”, says Baber.
And Baber, who has years of senior management experience behind him at GE Capital, Link Financial and Aldermore Bank, expects the “roadblock” to skyrocket its customer numbers.
“We expect to get within 72 hours at least half a million cards live, so half a million customers,” he says.
Ambitious targets
This might sound ambitious, given the fragmented nature of the Brazilian payments market, but Lanistar is no slouch on Instagram, boasting 250,000 followers, which is on a par with Revolut with 285,000.
Targeting Gen Z and Millennials, it’s no surprise that Lanistar wants to be seen as eco-friendly; along with its virtual cards, it has pledged to plant a tree for every new customer, similar to Dutch challenger bank bunq.
“This is not a gimmick,” Baber says, but says virtual cards save the business money and are in tune with the societal concerns of its customers.
Baber visits Brazil, where Lanistar has a small 10-person team in Sao Paulo, on average once a quarter, but is in touch with the team daily, he says.
Return to UK market?
On its possible return to the UK market, it seems fair to say Lanistar is still umming and ahhing this. On the one hand, Baber says “the reason for the delay is because the market is so big in Latin America”.
Furthermore, he admits Lanistar has considered abandoning the UK altogether and Manchester City superstar Kevin De Bruyne, an early Lanistar influencer, has had his contract cancelled, as the UK is not an immediate priority.
On the other hand, Lanistar has made some key appointments in the UK, including hiring Ed Blankson, previously of UK business bank Tide, as CFO, recruiting a new unnamed UK banking-as-a-service provider replacing Modulr and, crucially, potential investors question the fintech about returning to the UK market.
What is not on the immediate roadmap is Lanistar, which has an FCA EMI licence, trying to get a UK banking licence itself.
Baber says:
“It may sound controversial, but I am sure there are some political games that go on in the background to make it much more difficult for fintechs to go live with a banking licence.”
Asked to expand on this, he talks about big banks wanting to limit competition.
New role for founder
Hitherto, Lanistar has been funded to the tune of around £17 million via the munificence of its founder and former CEO Gurhan Kiziloz and his family.
When it first launched in the UK, Kiziloz, a flashy entrepreneur with no previous experience in finance, technology, or banking, was pictured next to a lifesize Lanistar-branded unicorn to indicate its ambition.
Lanistar initially launched in the UK in 2020 and under Kiziloz’s stewardship found itself in hot water with the UK regulators the FCA and ASA.
Baber says:
“From my perspective, Gurhan made a lot of mistakes. The business was self-funded but he tried to run way before he could crawl, not necessarily walk. That damaged the reputation of the business back in 2020 and 2021.”
Kiziloz, who owns 93 per cent of Lanistar, no longer has day-to-day involvement with the fintech, but has relocated to Dubai, where he is seeking out potential investors in the UAE.
Fresh funding
Baber says Lanistar will likely go to the market later this year, initially looking for between $30 to $50m, on the back of significantly amping up its customer numbers, the CEO hopes.
Over the longer-term, this is likely to be part of a $150m to $200m three-year fundraise.
After an inauspicious start, Baber says lessons have been learned, and now the fintech is on the right path, targeting key markets around the world, making key appointments while its army of influencers proselytise the Lanistar brand.
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