Turning obstacles into business opportunities

Philip Salter
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A STAGNATING economy can offer smaller businesses the room to expand – Rajesh Agrawal, founder of RationalFX, certainly believes that the recession granted his money transfers and online foreign currency payment business an opportunity. But Agrawal has been thriving for some time despite leaving his small home town at 22 to live on only 5,000 rupees (£65) a month in Chandigarh.

After studying and working in India, Agrawal was headhunted to work with a foreign exchange brokerage in the UK. In 2005, after three and a half years, he set up RationalFX with his business partner Paresh Davdra. Agrawal was then 28 and Davdra was 25. Agrawal thought “if I don’t try it now, then when will I? I increased the limits on my credit card, took a personal loan out and that’s how we started the business.” He says in the beginning “we were the cleaners, we were the accountants, we were the front office, we were the back office and we were flexible.

RationalFX are “in the business of selling businesses and people money”, Agrawal explains. “Six years ago when I started, people weren’t ready to listen. In the boom time people were less bothered about how much you can save them. Since the crisis things have changed – businesses and people are looking to save every penny wherever they can.”

There are two sides to the business. One is the traditional foreign exchange treasury business, where they help businesses and high-net-worth clients make the most of foreign exchange markets. On the new side sits Xendpay: an online worldwide money transfer platform.

Agrawal’s enthusiasm for building his business in Britain is absolute and he speaks passionately about its position as the world’s capital of foreign exchange. He contrasts it with India’s highly regulated forex markets: “If I had wanted to do this business in India, I would have to be a bank”. In fact, “even in France – up until two years ago – I had to be a bank.” Prior to France being forced by the EU’s payment service directive to liberalise, it had only three money transfer companies (with the necessary banking licences) versus the 3,500 competing in the UK. RationalFX was one of the first to jump into France’s newly liberalised market when its towering barriers to entry were lowered.

Agrawal is ambitious, believing “we can expand phenomenally across the world.” Xendpay fits into this, offering the service in Chinese (in total, eight languages are supported, with four more in development).

Building a company in the most dynamic forex market in the world means that there is plenty of room for growth outside it, but this presents some technical challenges. For example, in the US a separate licence is required to operate in each and every state. Another challenge Agrawal cites is maintaining the ethos upon which the company was founded: “No matter how big we become, we’ll always want to have the soul of a two-man company.” This is especially true because there is no differentiation in the physical product, thus the quality of service is all important. This is why Agrawal speaks with such pride about the invitations he receives from clients to attend their staff Christmas parties. He knows that his customers are king.

RationalFX under Agrawal’s leadership is taking on the world. He is the model case for why Britain should maintain and renew its historically open society. Agrawal says “ultimately, entrepreneurs see opportunities in obstacles” – a brand of optimism and fresh thinking that this country dearly needs more of.

Job title: Founder and chief executive

Turnover: £700m (expected this year)

Number of staff: 70

Age: 34

Born: Indore, India

Lives: Harrow

Studied: Bachelor’s degree in finance and marketing and an MBA in IT and marketing

Drinking: Whisky, on the rocks

Reading: Rousseau: The Social Contract

Talents: Thinking the unthinkable

Favourite business book: What They Don't Teach You at Harvard Business School

Motto: “Nothing is impossible unless you think it is.”

First ambition: Probably just to be alive