I was exploring the stablecoins ecosystem the other day and someone mentioned Aspora. They started as Vance, a remittance service for NRIs. If you check out their site, they promise near Google exchange rates for NRIs sending money home. Fees are minimal, sometimes even zero. Compared to banks or even Wise, their pricing looks too good to be true.

Aspora’s remittance product seems great for users but terrible as a standalone business. They’ve proudly announced hitting $2 billion in annualised transfer volume and saving customers €15 million in cumulative fees. That sounds impressive until you realise that someone else, Aspora’s investors, is subsidising that generosity.

Then why are we talking about Aspora? There are already enough VC-subsidised, loss-making startups.

Because if you think deeply, Aspora isn’t actually trying to build a profitable remittance business. What they’re doing is a classic hero feature play as an initial wedge strategy. The goal isn’t remittances, it’s to become the banking super app for the entire Indian NRI diaspora.

Remittance is just a wedge to acquire customers, Aspora will have multiple ways to monetise them later.

We’ve seen this playbook before. Parker Conrad handed out free HR and payroll software to US startups through his company, Zenefits. There was no catch for the customer. Zenefits made its money by getting licensed as a health insurance broker, earning about $450 per employee per year in commissions whenever a company bought benefits through its platform.

Zenefits was using payroll data to cross-sell lucrative health insurance policies. It was never a payroll company, it was an insurance company.

The parallels are impossible to ignore.

Both companies solve a painful, everyday headache, either moving money home or managing employees, for little to no cost.

Both collect critical data that competitors have to beg for later, like regulatory KYC (Know Your Customer) or payroll records. And both make their real profit on a regulated, sticky back-end product. For Zenefits it was insurance, and for Aspora it will be a full suite of banking products.

This is what I call the ‘hero-at-cost(or even loss)’ playbook. What looks like the initial hero feature is a product sold at cost or is a loss leader, while the actual product that helps monetize the eventually sticky user base comes later.

The wedge product (which is the hero product initially, and not a thin MVP) is priced so aggressively that it’s a no-brainer for customers to adopt. Once you have the users and their data locked in, you cross-sell high-margin services. The model works because of a few key levers. The initial problem has to be huge, like remittance pain for 30 million NRIs or payroll pain for every startup. The core, high-margin product needs to have high switching costs, like a bank account tied to your KYC (Know Your Customer) or a health plan tied to an annual renewal. And most importantly, the free wedge has to quietly collect the compliance and usage data you need for the upsell.

Meanwhile, Aspora’s cheap money transfers pull customers in, build trust, and crucially collect their KYC and financial data. Once Aspora locks in a large enough base, they’ll introduce high margin banking products like loans, insurance, or investment management tailored to NRIs.

NRIs transferring money home face an everyday headache. Banks charge absurd markups. Hidden fees pop up constantly. Aspora kills that pain. Users become fiercely loyal advocates, spreading the word through WhatsApp groups and family chats. Over 55% of Aspora’s new users come via referrals (essentially zero marginal customer acquisition cost).

Of course, this playbook has its risks. Especially if you are building in a space that regulators monitor aggressively. Zenefits found that out the hard way when state insurance commissioners forced them to abandon their free software strategy, calling it an illegal inducement. Aspora will likely face similar scrutiny. Indian regulators, in particular, have shown they can move swiftly when consumer data is involved.

You can spot these wedges in the wild if you know what to look for.

  1. Find a high-frequency, overpriced task that can be driven to a near-zero marginal cost.
  2. Look for a high-margin back-end product that relies on the same data or license.
  3. The trigger from the free wedge to the paid core should feel almost automatic, like payroll to insurance.
  4. The data or compliance rails should get stronger with every new user, making it harder for competitors to lure away your customers.

The hero-at-cost strategy works when the customer’s pain is acute, the back-end margin is fat and defensible, and the rails, whether data or licenses, connect the two. Aspora’s Google-rate remittance play is not charity. They’re the on-ramp to a cross-border bank play, starting with NRIs and then immigrants from more nations.

[Edited using Claude.]