In January 2023 DKK Partners, a provider of FX liquidity in frontier and emerging markets visited the City of Madrid to learn more about the multiple FinTech opportunities in the city and how their company can expand into this lucrative market.
Berta de la Fuente Molina, Head of Investment Attraction and Internationalisation at Madrid Investment Attraction and Louisa Criscenti-Brown from How2Go UK MIA’s antenna ofﬁce in the UK caught up with DKK in London in April 2023 to ﬁnd out how their plans for expansion into Madrid are progressing and what drew them to the market in the ﬁrst place.
All of our company directors are former Tier 1 bankers having worked at UBS, Citibank and Deutsche Bank with an average of 15 years experience. The company is growing rapidly and in late 2023 we were already in Series A fundraising round for the next quarter and had an investment advisor assigned.
Alongside our rapid growth and the conﬁrmation of the need for our services, our experience told us we had to stick to strict policies right from the start. That’s why when we look at new countries for expansion we do our homework and make sure we do things properly. Having an organisation like Madrid Investment Attraction on our team to assist us with roadmapping the expansion is invaluable.
DKK Partners is a leading provider of foreign exchange (FX) services to banks and businesses in emerging and frontier markets with particular focus on Africa.
Our platform offers an alternative way to access G10 and emerging market currencies without relying on central banks. Our expanding range of products includes FX emerging market liquidity, FX hedging & risk management, and various channels for cross-border payments.
Deep liquidity…smooth settlement
A colleague of ours attended the launch of the Madrid Investment Attraction UK Antenna ofﬁce in November 2022 and having learned of the focus and support for FinTech in the city felt it was an opportune time for us to look at the city in more detail. We had always been interested in expansion and building a base in Europe and Madrid gives us access to the whole of the EU as well as additional frontier markets in the LATAM region.
The city is also attractive due to it being the headquarters of Santander, BBVA and Mapfre as well as being home to the main Spanish regulatory agencies, i.e.(CNMV, CNMC, Banco de España, Directorate General of Insurance, FNMT)
This will be the base of our EU/North Africa /LATAM trade, as well as a support hub for the company’s global payments activities. We are also looking to expand the internal technological capacity to cover ML/AI and digital channels, so the objective is for the Madrid unit to not only be operational but to create teams for the development of its own technology.
This is vital, and our visit to Madrid was extremely useful in giving us the opportunity to understand how the banking and regulatory system works in Spain – being on the ground in the country you are going to expand into is an essential part of expansion. The meetings we had in Madrid contributed massively to our planning.
Probably in the region of circa €2 million. There is a mandatory regulatory requirement for electronic money of €350,000 being part of the initial funding. We’re predicting a turnover of around €20-30MM initially.
We will probably start with 6, growing to approximately 25-30 members of staff. We want to hire local where there is a high-quality talent pool. We do not necessarily hire just graduates but we also recruit people from other sectors outside of banking and ﬁnance and we have found this strategy really effective for us.
Phase one will be opening our sales ofﬁce, hopefully by early August, phase 2 depends on the licensing being granted by the Bank of Spain, which will take about 14 – 16 months..
We’ve appointed CMS as our lawyer and are working with Finnovating where we need additional support. Our NIE and NIF registrations are nearly ready and we have applied for our Bank of Spain money licence. We will use our external compliance company for regulation assistance.
The help MIA and How2Go have offered us with their soft landing services and guidance has been invaluable. Our visit to Madrid to view the different services and help available was productive and gave us a great overview of the ecosystem and what life could be like if we open an ofﬁce there. Madrid as a city is home to a number of multinational banks and ﬁnancial institutions and we are looking forward to DKK being part of this ecosystem.
Thanks so much for speaking with us today, we are very much looking forward to watching the growth of DKK partners into Madrid and beyond.