Launching in 2013, Safello didn't mince words – the startup boldly declared its aspiration to become the "Coinbase of Europe."
But while it initially grabbed headlines, the Stockholm-based company has fallen off the radar in recent years. As major regional startups like Cryex and KnCMiner succumbed to operational issues, Safello simply wasn't able to gain the traction with regional VCs it needed to compete.
According to Frank Schuil, Safello's CEO, the slump had a lot to do with the company's mission – at the time, many were skeptical of cryptocurrency's viability.
"What we tried to do initially was quite ambitious in creating a banking services platform. Unfortunately, that was maybe too early and too ambitious, so what we did in 2016 was go back to our roots," Schuil said.
He told CoinDesk:
"Back then, it was almost impossible to get any payment service provider, financial institution or bank to work with us."
But attitudes about cryptocurrency have gradually changed, and Safello is again working toward its goals.
Announced today, Safello has closed a partnership that enables customers to purchase bitcoin with Mastercard and Visa credit cards. The service was tested with British pounds in a trial, but now supports euros, Norwegian krone, Danish krone, Czech koruna, Swiss franc and Hungarian forint.
Change of fortune
In interview, Schuil sought to portray Safello as a startup in the midst of a revival along with the wider industry. So far in 2017, the value of bitcoin has increased over 250%, and the value of the wider cryptocurrency asset class has grown from $10 billion to over $120 billion today.
In the interest of capturing this momentum, Safello has also launched a new front end and reworked much of its back end, aiming to improve its exchange and wallet services.
Further, Schuil suggested that, despite past problems, he's now optimistic that the startup will be able to find and identify partners that can help it grow.
"We were finally able to close a partnership with a party that helped us get credit card payments with 3D Secure, which we needed from a fraud [prevention] point of view, at a rate that was reasonable," he said.
Going forward, the exchange is working to build out other payment methods and hopes to soon relaunch ICBIT – a peer-to-peer cryptocurrency futures exchange it acquired in October, under the Safello name.
Returning to Norway
In what was perhaps a more symbolic move, the company is also re-entering Norway, a market in which it had previously had trouble gaining traction.
Given its presence in Europe, Safello initially tried to extend services to the market, but Norway had ruled that bitcoin was subject to VAT, a consumption tax that put immense burdens on companies transacting in the digital currency.
But earlier this year, Norway lifted the VAT rule, taking cues from a 2015 ruling from the European Court of Justice that states bitcoin wasn’t subject to VAT in the EU – and Safello was ready to capitalize.
"We already had all of the pipelines required to enter quickly," Schuil said.
With this return, Safello is now active across all of Europe (except Iceland where regulations are in place restricting cryptocurrency exchanges).
While Schuil declined to disclose user numbers or transaction data, he said the exchange now has "tens of thousands of customers" – an number he indicated he plans to do his best to increase.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Safello.
Frank Schuil image via YouTube