Morten Lund doesn’t want to be remembered for going bankrupt just four years after receiving a $50 million return on his early investment in Skype. He wants to go down in history for helping to end global poverty.
Described as a visionary and a rebel, the Danish serial entrepreneur’s motto is “take big swings.”
Since coming out of bankruptcy in 2010 he has focused on disrupting financial services. Among other things he is an early advisor and shareholder in Tradeshift, a enterprise invoicing start-up with a social layer which was started up in his basement and has gone on to raise over $75 million in funding.
And now Lund is pouring his energy into two for-profit humanitarian projects that he thinks could be world-changing.
CodersTrust, founded by Ferdinand Kjaerulff, a fellow Dane, aims to help finance and educate 100,000 IT workers in developing markets over the next three years using microloans and online education. The idea is that with extra training freelancers working for online workplaces such as oDesk could earn $10 an hour instead of $1.
The project involves Nobel Laureate Muhammad Yunis’s Grameen Bank, the Danish International Development Agency and PlaNet Finance, a Paris-based international organization founded by Jacques Attali. Lund’s role is coming up with an strategy for a global roll-out.
The other, Poverty Tracker, has the goal of raising $3 billion to stamp out extreme poverty by 2021.
“I want to win the Nobel Prize,” says Lund, who likes to shoot from the hip and aim for the stars.
The latest two projects are already taking concrete form, thanks in part to Lund’s new 50% business partner, Lone Fønss Schrøder, who has a master’s degree in accounting and finance and another in oil and offshore law, and was the highest-ranking woman executive in Nordic conglomerate Maersk. She is currently a senior advisor to Credit Suisse, Vice Chairman of Savo Bank, and Chair of the Audit Committee of Volvo Cars, and she has just been asked to join IKEA’s board.
Lund Brings Some Interesting Experience To The Table
Schrøder helps bring order and discipline to joint projects, says Lund. She “does her board stuff from 8:00 to 2:00 and then we work on crazy stuff for the rest of the day,” he says.
Lund brings some interesting experience to the table: he has launched and run advertising agencies, venture capital firms, tech companies and an investment bank. Along the way he has seeded over 100 European start-ups and became friends and worked with people who have gone on to shape the digital future, including Huffington Post CEO Jimmy Maymann and Kazaa and Skype co-founders Niklas Zennström and Janus Friis.
Lund began life in a farming community in rural Denmark. An only child, his parents’ love and support encouraged his brash self-confidence, says Lund. And his father’s decision, midway through his childhood, to risk it all and become an entrepreneur and build an electronics components business made a deep impression on him.
Impatient with university professors who weren’t teaching him things he could use in the real world, Lund dropped out and created his first company in 1993, a package of products aimed at graduating students. Before long graduates at more than 103 schools became customers. During that time Lund met Maymann and the two formed a digital advertising agency with Lund’s father. The agency was purchased by Leo Burnett in 2000.
Along the way Lund started, and closed, a venture fund and became friends with Zennström and Friis, who were then working for Danish phone company Tele Danmark. (Lund was advising on web strategy at the time.)
When they launched Kazaa, a controversial peer-to-peer file sharing application, Zennström and Friis asked Lund to help with business development. When the recording industry threatened to release viruses onto Kazaa, Lund says he created Bullguard, an anti-virus company, to help out.
At One point He Had $45 Million In His Account
When the idea for Skype was born Friis and Zennström knocked on the doors of venture capitalists across Europe but couldn’t raise funding. Lund was among the first to step up. He invested $100,000 and paid their rent.
When Skype was sold to eBay in 2005 his payback was about $50 million and “it changed my life,” says Lund. He spent some of the money before receiving it but at one point he says he had $45 million in his account.
Lund didn’t buy a new house and continued using his bicycle and an old Volvo to get around. The money was invested into start-ups but the bulk of it went into Nyhedsavisen, a free newspaper that was delivered to people’s doorsteps. At one point the paper was burning about $25 million a month, recalls Lund, adding “it was an expensive little hobby.”
In the end the paper closed and Lund was declared bankrupt.
1972: Born in Roskilde, Denmark, a farming community.
1991: Finishes school in Solrød; moves to Odense to start a degree; wins Danish Championship in U18 handball; quits university.
1993: First entrepreneurial venture creates what is considered today in Denmark to be the package for all graduating students.
1996: Launches NeatWork/NeoIDEO with three friends. Launches Ne@tWork Aps (a digital advertising agency later renamed Neo Ideo).
2000: Neo Ideo is purchased by the Leo Burnett Group. Co-founds Prey4, a venture firm with a £2 million fund.
2001: Prey4 Ventures, which invested in 15 local start-ups, runs out of funds and shuts down.
2002: Helps Niklas Zennström and Janus Friis with business development on KaZaa. Co-founds Bullguard, an anti-virus company.
2003: Provides seed investment to Skype; receives funding for his own company, Bullguard, from DJF/ePlanet.
2005: Skype is sold to eBay. Lund, who invested $100,000, receives a payout of around $50 million. Co-founds LundKenner, a new venture firm.
2006: Creates start-up catalyst LundXY.
2009: Declared bankrupt after investing heavily in Nyhedsavisen, a free daily newspaper; takes on a job as adviser to Tradeshift.
2010: Declared out of bankruptcy.
2012: Creates X/0, an enterprise platform that allows businesses to operate on a global scale.
2013: Forms 50/50 partnership with Danish executive Lone Fonss Schrøder; co-founds Tofte & Company, a Danish investment bank.
2014: Gets behind CodersTrust and PovertyTracker, two for-profit humanitarian projects.
“I lost my money but I didn’t lose my brand or my self-confidence,” says Lund. “I still had my four wonderful kids, and that gives you perspective.”
Friends helped and before long he was out of bankruptcy and back in business. In addition to advising Tradeshift he co-founded Tofte & Company, a Danish investment bank, and launched X/O, a platform that allows businesses to operate on a global scale without the need for their own back office, legal staff, tax accountants and other logistics.
“What I Like Is His Intellect”
He also forged a partnership with Schrøder. “Morten and I in our professional careers hardly could have had more different paths,” says Schrøder. “But we have both been elite athletes, Morten on the All Denmark team in handball and me as a competitive 400-meter hurdle and 1,500-meter runner. We have both been trained to ignore the pain and never stop.”
“What I like is his intellect,” she says,“and his ability to understand very complex things. It is very seldom that I kick off a discussion that he doesn’t have a deep knowledge of the subject.”
Schrøder says she believes traditional companies can learn a lot from Lund’s understanding of how technology is transforming business.
And so, when Øyvind Eriksen, the CEO of Aker ASA and Aker Solutions, a supplier of products and services to the oil and gas industry — a man who Schrøder says already has everything — was celebrating a birthday she bought him the most valuable thing she could think of: one hour with Lund.
Their joint projects include supply chain financing as well as the humanitarian projects. CodersTrust identifies freelancers with good ratings at online workplaces like oDesk and approaches them with a loan offer for $2,000. After six months of coursework, the freelancers start taking assignments and pay 18% interest on the loan amount to the microfinance organization that issued the loans. The loans are usually paid off within 18 months. In addition the freelancers must pay the usual 6% to 8% cut to online job marketplaces and a 10% commission fee on top of that to CodersTrust on every job for a period of three years.
The other humanitarian project, CMS2, which is being renamed Poverty Tracker, is a “translation engine that seeks to put the equivalent of a GPS tracker on every dollar donated to charity and put a structured system in place to monitor the impact,” says Lund.
Lund, who is helping Poverty Tracker with its go-to-market strategy, owns 51% of the for-profit company. The goal is to raise $3 billion to stamp out extreme poverty by 2021.
Funding is expected to come in part from global clothing brands that have set up plants in places like Bangladesh.
”This Is What Is Making Me Tick”
While today banks skim up to 8.5% from charity money transferred to impoverished countries, Poverty Tracker will take only a 4.7% cut for a transfer, says Lund. Then it will track how the money is distributed and the result.
“If we can do this on a big, big scale and cover a whole area [occupied by] a million extremely poor people then we would want, in exchange, to get the rights to infrastructure for 50 years,” he says.
Poverty Tracker will be a profitable business because “every family that comes out of extreme poverty will want to buy some electricity and some clean water.”
The two projects present an opportunity to do well while at the same time doing good on a grand scale, says Lund. “This is what is making me tick these days.”