Crossing the Fintech Gap in Albania with Rubicon
Fintech startup Rubicon becomes the first Electronic Money Institution in Albania, bringing innovation to the local financial market. But where to from here?
As one of the most under-developed financial markets in Europe, Albania is trying to catch up, prompting the emergence of fintech startups with innovative solutions on a mission to bridge the gap. One of these startups, led by Armand Brahaj, is Rubicon.
Rubicon is located in the capital of Albania, Tirana. With a focus on becoming the leading Electronic Money Institution in the country, Rubicon relies heavily on its proprietary technologies, intellectual property, and innovative products, such as its application Pago. Pago serves as an online electronic bank that can satisfy most financial needs and requirements for both individuals and companies.
To accelerate the development of the app, the Rubicon team secured pre-seed funding of approximately €450,000 in 2021. The investment helped consolidate the team, gain the necessary licensing to start operating, and dedicate attention and energy to product development.
Now, two years later, it's time to start a new fundraising campaign. Armand Brahaj, the founder of Rubicon, software developer, researcher with a Ph.D. in Information Management, and serial entrepreneur, finds funding quite challenging at the moment:
Building a business in Fintech is quite cash-demanding (before a company hits break-even). Most of the startups worldwide are struggling to secure funding for further development. With the VC world in recession and local businesspeople preferring to be the only company decision-makers, finding the right partners is challenging.
This is where Swiss EP could help and offer the experience and knowledge of fintech experts Chris Wehbe, Martin Bjergegaard, and Paul Wild whom Armand met and worked with in the fall of 2022.
Each of them intensely focused on our product's business side. Chris and Paul especially gave us guidelines on the very technical side of the business. Martin had a more generic scope and tried to connect us to similar initiatives in Denmark. I assess the expertise provided by these experts as the best one we got so far. Now we have a network of stakeholders, mentors and partners that we communicate continuously with.
While looking for suitable funding options, the Rubicon team worked hard to make their services worthy of attention. The quality of their work enabled them to secure vital partnerships with renowned international financial companies, such as Mastercard, and important local institutions like the Albanian Postal Service. This will give Rubicon leverage in future negotiations. But will it be enough?
It’s already evident that 2023 will be challenging for startups worldwide, and Albania will be no exception. Limited options for startup funding in the country, combined with the global recession, leave little space for optimism. Armand is cautious in his plans:
There is a paradigm of the Valley of Death in the life of most companies. This is the gap between all the effort placed in product development, up to the company growth. For most companies that started up operations in 2022 this year is the Valley of Death, so the goal for 2023 is to survive. We want to stay on the market and be able to launch all the products envisioned in our roadmap. Projections put 2024 to be the break-even year for us.
Will the Albanian market recognize the benefits of an Electronic Money Institution and enable Rubicon to survive? Or will Armand and his team find a partner willing to invest in their technology and IP?
Albania needs solutions such as Pago and similar apps to catch up with the region and the rest of the world and cross the Fintech Rubicon. Time will tell if it’s ready.