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A business built on values
As someone who deals in currency exchange on a daily basis, Paresh Davdra must have his finger on the pulse when it comes to the value of money around the world.
But he puts the success of RationalFX – a foreign exchange and payment service specialist that turns over £2.5 billion a year – down to more fundamental, human values.
Paresh, the co-founder and interim CEO of the business, said: “My dad and his family came from Uganda in 1972. They were part of the community that was kicked out by Idi Amin. They came here with nothing, but my dad and his brothers worked incredibly hard and had a really strong family unit.
“I never saw my cousins as cousins, they are like brothers and sisters because we all grew up together.
“Hard work and caring are the two values that we were brought up with and I think that’s had a massive impact on me and I’ve brought that forward into business.
“For me, I had a normal family life in Harrow and just worked hard to get to this level. I feel like I’ve learned so much in the 17 years of business but I think those values run through everything we do.”
Paresh admits he wasn’t particularly academic and took a year out from education at 18, earning £11,000 a year in a telephone customer service role. He knew then that he wanted more.
He went to Middlesex University to study Marketing and Computer Science and landed a role with a currency brokerage business after completing his degree.
It was here that he met Rajesh Agrawal, now the Deputy Mayor of London for Business, and it was this friendship and partnership that led to the establishment of RationalFX.
“I got to know Rajesh really well and one day he suddenly resigned from the business,” said Paresh.
“I bugged him for six weeks every day at lunch time to find out what he was planning to do and he wouldn’t tell me. In the end, I said to him that whatever he was doing I wanted in.
“In the end, he told me he was planning to do something similar but wanted to offer an online system and I said ‘let’s do it.’ The rest is history.”
Paresh added: “Rajesh had come to the country from India with absolutely nothing in 2001. He is from a super-humble background where he, two siblings and his parents grew up in a one-bedroom flat. They all slept in one room.
“He sold his motorbike to pay for his flight to the UK on a one-way ticket and that mindset of saying ‘I’m doing this, there’s no return, so it has to work’ was something I saw in him and believed in.
“He was like an older brother and mentor to me and then, in 2016, he became the Deputy Mayor of London for Business.
“He has an incredible charisma. I was just drawn to that and we’ve made a great team over the years.
“Being young, I didn’t really think about what the consequences might be. I didn’t have much in terms of overheads as I was living at my parents’ house and wasn’t thinking about what might go wrong.”
Paresh was 24 when they began RationalFX in 2005 as the first online platform for the world of currency exchange and there were articles written saying the company was a standard bearer in the industry.
“I thought I was going to be a multi-millionaire in a few months!” he said. “I grossly underestimated the hard work that was required to build a business over the years.
“Even when the business was growing in the early days, we didn’t take a salary in the first 18 months so we lived off credit cards and personal loans.
“I actually turned around to Rajesh at one point and asked if he thought we would be better off getting ‘normal’ jobs and he lost the plot with me! He got so angry that I never thought or asked that again.
“He told me to go if I wanted to go, and that he would make it work. It was that kind of spirit of determination that really pushed us through then and pushed us through all kinds of hard times.
“It’s not been plain sailing and we’ve had to navigate our way through.”
From humble beginnings, the company started to grow in a major way. From a 100 square feet office in Brighton in 2005, to today where more than 100 staff occupy 9,000 square feet on the 32nd floor at Canary Wharf.
“We moved from Brighton to Holborn and we grew to eight people but were still not taking a salary ourselves," he said.
“Then we moved to Hatton Garden for about 18 months before getting 2,500 sq ft in the City where we packed in 55 people. I look back and they are really fond memories because we were just growing the company, dealing with issues and challenges, finding new people to work with and learning a lot all of the time.
“Finally, we came to this office and we now turn over around £2.5billion a year and we manage that through online and offline sales.”
One major challenge came in the recession of 2008 when the property market crashed around the world – but RationalFX had already started to shift its clientbase and was insulated from some of the turbulence.
Paresh said: “In the early years, we focussed on the private client market so, for example, someone who was maybe purchasing a property in Dubai or Spain, we would work with the estate agents who would refer their clients to us so they could receive a better exchange rate and better service.
“In 2008, that all changed with the recession and the overseas property market really suffering.
“We had diversified by then into targeting business customers and we never really looked back. We still have a small private client book which we help but the majority of clients are business customers.”
The company is now a Business Influence member of the Coventry and Warwickshire Chamber of Commerce and Paresh reveals to firms across the region what they could expect from the business.
He said: “RationalFX specialises in foreign exchange services and payment services across international and domestic markets. We work mainly in the B2B sphere – around 70 per cent of our revenue comes from business.
“If you were importing products from China, for example, we could provide you with an account manager or an online service where you would get a preferential exchange rate. You can move money almost instantly between accounts, between yourself and your supplier and you can get guidance around currency markets.
“You can get access to other tools, such as forward buying so you can fix your exchange rate now and for anything up to two years. If you’d fixed your rate on Pound/Dollar six months ago, you’d be in a better position than where you are today unfortunately.
“It’s a really straightforward business but there is a lot going on in the background that provides the engine for what we do to provide the level of service we expect of ourselves.
“We bank with tier one banks – JP Morgan, Goldman Sachs, Lloyds and about 18 others across the globe. We’ve built an infrastructure that API’s straight into these banks and allows us to make international payments across the globe.
“Our client base varies and we work with pretty much everyone unless you are considered a high-risk industry. We don’t touch gambling or crypto. Generally, if you’re a wholesaler, you’re a service provider or a payroll company, you could be a RationalFX client.
“We also support digital nomads who have decided to work remotely from various places in the world – they can benefit from our services. In fact, it’s the umbrella companies that are managing those digital nomads that benefit the most as we can distribute funds across the globe in one go.
“No company is too small or too big to look at their requirements from a payments perspective. Even if you only have a domestic requirement, we can give you named accounts with the likes of JP Morgan or Goldman Sachs which will be in the name of your company and you can collect money into those accounts. We can then pay your suppliers or your payroll, all at the fraction of the cost of what your bank would charge.
“It's a great way to save money, especially if you are a small business who don’t get the level of service that’s applied to large businesses. They need as much help as possible.”
And still the value of hard work and caring about the business, its people and its clients remains at the forefront of what RationalFX is all about.
“There’s been a level of luck involved but I think I excel when I am faced with challenges,” he said. “If we are going through a difficult time, I come into my zone and work well under pressure. That determination to never give up is a huge, it’s a huge part of where we are today.
“Now I’m 42, I have weathered a few storms and have got a few battle scars, I am so grateful for what we have and where we have got to and it’s driven by those values that were instilled into me at an early age.”
❛❛ We bank with tier one banks – JP Morgan, Goldman Sachs, Lloyds and about 18 others across the globe. We’ve built an infrastructure that API’s straight into these banks and allows us to make international payments across the globe.❜❜ About Paresh Davdra
