Money machine has a hater of loose change flying high
Lukas Decker figured that many people are as annoyed by loose change as he is and his hunch has him on the verge of signing deals with major airports
Published 03/01/2016 | 02:30
Lukas Decker was so annoyed by the feel of loose change in his pockets that by the age of 24 he had set up a company which helps people get rid of unwanted coins.
"I've always been commuting between different countries and the nuisance of currencies was very much on my mind," said Mr Decker. "My background is very international. I'm originally from Hamburg in Germany. I went to boarding school in London and my parents live in Italy."
Mr Decker, who has been living in Dublin for a few years, set up his company - Coindrum - in 2012 when he was studying for a masters in business at UCD Smurfit Business School. He came up with the idea for the company when paying his motorway toll on the way to visiting his parents in Italy.
"I had just come from the airport and when paying the toll, I managed to get rid of all of my loose change," said Mr Decker. "I got out of the car and took a picture of the machine I used to pay my toll - and it went from there."
The satisfaction of getting rid of his loose change - but still using it to pay for something - sparked the idea for Coindrum. Mr Decker knew that no matter how much of a nuisance people considered loose change to be when travelling, they would be more inclined to get rid of it if they got something back in return.
So he set up Coindrum - a company which installs machines in airports that allow passengers to convert their unwanted coins into duty-free shopping vouchers. People are not charged to convert their coins into vouchers - instead, they get a bonus for doing so as they get an extra 10pc free shopping credit when they use Coindrum machines. So a passenger would get a voucher worth €5.50 if he put €5 worth of coins into a Coindrum machine, for example.
Mr Decker knew that such machines wouldn't just be appealing to airport passengers - but to duty-free shops and airports too.
"I knew that in airport shops, the key success metric is the footfall penetration - that is, the percentage of passengers who shop in the airport," said Mr Decker. "We turn non-spenders into spenders. People take a €5 voucher they get from a Coindrum machine and they end up spending over €30 at the till. That's what's so exciting about Coindrum and it's why the retailers are so interested. The airports can make a lot more money as a result. Another advantage of having Coindrum machines in an airport is that they help speed up security checks - because people are carrying less change in their pockets."
Coindrum machines were first trialled in Dublin Airport. Mr Decker raised some initial funds from Ryanair co-founder Declan Ryan before launching the trial. As that trial is now finished, Coindrum machines are no longer in Dublin Airport. However, the company is expecting to sign deals with other international airports and travel retail chains soon - as well as returning to Dublin Airport.
"We are in the final stages of signing deals with other international airports and travel retail chains," said Mr Decker. "We'll probably return to Dublin Airport early next year. We're also going on a road show soon to visit major airports in the Middle East and Australia."
The company is in the advanced stages of closing a third "and significant" funding round, said Mr Decker. "Coindrum has already closed two funding rounds - both with backing from Declan Ryan," he added.
It was "largely opportunity" which brought Mr Decker to Dublin a few years ago and which has kept him here since, he says. He enjoys living here.
"The business is very international by nature and we could potentially base ourselves anywhere," he said. "Dublin has been a good place to get started and there are no plans to relocate the company. Besides, I simply like the city as a place to live."
He described the trial in Dublin Airport as a "small but significant project".
"We started very small and we don't have huge revenues - but we have a rich insight into consumer behaviour," said Mr Decker. "Airport passenger numbers are rising across the board. Our success is very much linked to that. There's also more money about."
Coindrum was initially set up with the intention of winning the business of customers visiting Ireland from outside the eurozone - who then wanted to get rid of their lose euro coins before flying home.
"However, we found that quite a few people used the machines even if they flew within the euro," said Mr Decker. "That shows just how much people are annoyed by coins in their pockets - particularly men, as women often have their coins in wallets. Business people are especially annoyed by coins as they travel so often. These people are the ones who really realise the convenience of the Coindrum service - and so they're more likely to use it again."
However, it isn't just business people who like the service. "One unexpected phenomenon was that Irish people started bringing all their coins from home to Dublin Airport and converted over €300 worth of coins at a time," said Mr Decker. "It was an easy way for them to make use of coin collections and they got 10pc extra free shopping credit when they converted their coins at the machines."
Amongst the passengers from outside the euro who were travelling through Dublin Airport, it was the British, Canadians and Americans who were most likely to use the machines before flying back home.
The company makes it money by charging airport retailers commission every time one of its vouchers is used by a passenger to buy something.
"We provide the technology for free and all the retailer has to do is accept the voucher," said Mr Decker. "We only ever charge the retailer commission when the vouchers are spent in their shop."
Coindrum has four directors - Mr Decker, Declan Fearon (ceo of Tipperary Crystal), Declan Ryan, and Frank Roche (deputy principal of the UCD College of Business and Law).
"I had the right partners for the business from the start - and I was in the right airport," said Mr Decker. "Ireland is a brand in aviation - it has a lot of aviation success stories."
At 27, Mr Decker is a young entrepreneur. So is it in the genes?
"I don't think my family can take any credit for my entrepreneurial streak," said Mr Decker. "My parents were lawyers."
He has fond memories of growing up in Hamburg. "It's a beautiful place and quite similar to Dublin in many ways - a harbour city with lots of green and a little too much rain. The summers are nice with sand beaches at the river Elbe - our local Liffey equivalent."
One of the things he misses most about Hamburg is its food. "You only realise the things you miss when you go through a withdrawal period," he said.
"For me, it's curry sausage, a pastry called Franzbrötchen and a drink called Vitamalz - whether that's the actual taste or just nostalgia, I couldn't tell you."
Mr Decker was a young boy when the euro was first introduced so, not surprisingly, he doesn't miss the old German currency, the Deutsche Mark, that much. "I have distant memories of the Deutsche Mark and there is no certainty in the future of the euro currency, of course," said Mr Decker. "Indeed, a more fragmented currency landscape in Europe would be a great opportunity for Coindrum."
Mr Decker is not married but has "a beautiful Mexican girlfriend". "I travel more than ever - it's part of the job and I enjoy travelling," he said.
So are there any coins he doesn't mind having in his pockets when globetrotting?
"There is a five Franken coin in Switzerland which is currently worth about €4.61 - those coins would be an attractive opportunity for Coindrum, especially given the isolation of the Swiss currency area," he said. "I have a lucky set of one cent coins which I had turned into cuff links - they were collected from the first ever coins deposited into a Coindrum machine in Dublin Airport," he said.
So not all loose change is annoying after all - particularly if it was the inspiration for a successful young company.
Sunday Indo Business