The Big Idea with David Margendorff

For some alumni, asking them why they became an entrepreneur isn't a relevant question because it is all they have ever known. We spoke to an alumnus who started his first business while at school.

Tell us a little about yourself?

In the year 2000 at the age of 16, I started my first e-commerce company in Germany selling videogames and accessories online, a field of business that I am very passionate about. In 2008 I sold more than 50% of the business and two years later, with more and more customer playing games on their smartphones and downloading games rather than buying physical games, I decided that it would be the right time for a new challenge.

David Margendorff
David Margendorff

Having never studied before, I decided to combine my practical knowledge with theory. Admittedly, due to my company, which I started while still in school, my grades were terrible. Eventually, I never graduated with a degree which would have allowed me to study at a public university in Germany. But this was also never my intention; I wanted to go abroad.

When I first applied to EBS London for a Bachelors degree I was rejected, but managed to get invited to an interview for the MBA course. I flew to London and passed the interview but gracefully declined. A 10 month MBA programmme was not what I wanted. I had already worked for almost 10 years and wanted a less intense programme before I continued working. Fortunately, EBS London reconsidered and accepted me for their BA program. Eventually I graduated with a BA (Hons) in International Business with Spanish and a major in Finance. This also gave me the opportunity to spend one semester in Buenos Aires and one in Barcelona.

After I graduated I joined Nova Founders, a Rocket Internet spin-off, in Malaysia together with another friend from Business School. Working for a big corporation was never an option for me, being part of a startup again was great. We worked extremely long hours, learned a lot about execution, business development, online marketing and about the potential in emerging countries. The great thing about being part of a startup, especially at an early stage is that you get a lot of exposure and you see the progress the company makes—if not daily then weekly. After only two months in Malaysia, I was offered to lead the expansion in the Philippines. We grew rapidly, hired 60+ in less than 3 months and today CompareGlobalGroup is the biggest financial comparision website in the World, by footprint. But I decided to leave and build my own Fintech startup; – the 1st online pawnshop in Southeast Asia.

What’s the big idea?

PawnheroWe launched PawnHero first in the Philippines, a country considered 'unbanked' where only 2 out of 10 people have a bank account, and less than 5% have a credit card. Consequently most Filipinos don’t have access to affordable credit and are left with going to a pawnshop for short-term cash needs. Unfortunately, traditional pawnshops charge very high interest rates, penalties and hidden costs , and have a negative stigma.

Through, we are revolutionising the way people pawn. Unlike our brick-and-mortar competitors, we offer half of what traditional pawnshops charge, with higher appraisals for a wider variety of items accepted. With 27 million smartphones (40m by the end of 2015) Filipinos can now get a loan anywhere and anytime. Simply go online, upload a picture of the item(s) they wish to pawn and within minutes we send them an estimate via text message and email. After the customer accepts our offer, s/he can schedule a free and fully insured pickup nationwide or drop off their item in any of the 900+ PawnHero affiliated outlets.

For logistics, we partnered with 2GO, one of the biggest local logistic companies in the Philippines. With 2GO, PawnHero’s launch got backed by a strong brand recognized and trusted by Filipinos nationwide. Compared to our competitors who took decades to build a network of branches all over the Philippines, PawnHero launched with over 900 affiliated outlets nationwide. Aside from the partnership, 2GO also invested in the startup—and further increased their funding due to the overwhelming traction PawnHero showcased in just two weeks of operations.

After we have received and assessed the item(s) we pay out the loan. But PawnHero doesn’t stop here, we are the good guys, and we want to solve the underlying problem and empower financial inclusion in the Philippines. Upon pickup of the item, every customer receives a free PawnHero Card, a debit card which can be used to withdraw their money from any ATM nationwide, pay for example at a restaurant or use it for online shopping.

At the moment we are thoroughly analysing other markets in Southeast Asia and other emerging countries for our near expansion. We are also looking for candidates who are interested in joining our journey, here in Asia or elsewhere.