Startup offers insights into your spending with personalised features to manage your money
What is the concept of Loot?
Loot is a current account and contactless Loot Mastercard® card, that offers insights into your spending with personalised features to manage your money. Whether you’re working towards an around the world trip or your next meal out, Loot believes there’s never a reason to miss out. Loot is aimed at younger generations (or those young at heart!) and tech millenials who increasingly run their lives from their smartphone.
What was the driving force behind this disruptive idea?
I founded Loot just after University after being staggered at the poor service and sluggish mobile interfaces that high street banks offered their customers. For example, since I started Loot, my Natwest app hasn’t materially changed in any way I would notice it. That’s too slow for me as a user and high street banks are at risk of being overtaken by challengers that are more nimble and forward thinking. When I founded Loot I just wanted a simple app that told me how far my pay would take me and my daily budget.
Loot doesn’t have a banking license yet, so how does it operate?
Loot is a current account and works just as you would imagine, only, Loot is not a bank. We are FCA regulated as an agent of Wirecard Card Solutions Limited, a EMI licence holder. What this means in practical terms is, unlike a bank, we are not allowed to invest or lend the money you have on your Loot card. This is a good thing as it means Loot is required by law to hold 100 per cent of your cash until you want it. It just sits there and we don’t lend it out or invest it, like banks do. Your cash on the Loot card is what’s called “safeguarded”. We have to make sure your cash is actually there, in a separate bank account, which we can’t touch, unless you ask us to.
How is your business model challenging other high-street banks in the UK?
Loot can now fully replace a traditional bank account, helping users manage their money and track spending through our app. Currently, no high street bank can offer the same convenience and money management options that Loot can, and just by the nature of being a startup we can be more agile and quicker to adapt to market demands. We’re already taking market share away from traditional banks and I only expect this to continue.
How do you make money?
We aim to make money the same way as a bank does, at a fraction of the cost and without the unnecessary fees. This means we’ll build products in lending wealth management and FX. We launched our FX inbound service in September and are on track to have all revenue products live within 2 years.
Who’s bankrolling you?
Our most recent funding round was led by Power Corporation’s corporate VC, Portag3, and Speedinvest. Some of our more well-known investors include Global Founders Capital and Nick Wheeler, the founder of Charles Trywhitt.
You have just raised £2.2m in Series A funding. How are you planning to invest the funds?
In 2018, we’ll be working towards making Loot fully automatic, whilst integrating the best social features into the platform. We are also looking at introducing a number of new products… watch this space.
How do you engage with customers and ensure growth of your subscribers?
Through the INK section of our site we offer a thorough and diverse selection of content to help our current and prospective customers. This includes tailored personal finance tips and explanations of what events (such as the budget) means to our audience. We are also incredibly active on our social channels, but a lot of our business has come from word of mouth.
Since smartphones are a key element of your business model, what steps have you taken for data protection and storing customer data?
We take data protection very seriously and have to be compliant. We have a huge advantage over most as we have built our technology from the ground up, so we are able to use all the latest security practices and ensure we stay within the rules.
What are your key marketing strategies for target audiences in London?
We’re really focused on communicating our mission effectively and cultivating a brand that is reflective of that and resonates with our target market - authenticity is key. We promote Loot across a variety of online channels - where we know our target audience are. We also invest in content marketing, working with students and tech millenials, to create media that our target market will genuinely care about and benefit from.
Who’s on your team that makes you think you can do this?
We have an experienced senior team that includes our COO Will White who brings over 13 years’ experience as a Chartered Accountant and has worked as a negotiator on the Lehman Brothers administration and our CFO David Rose, who has over 30 years’ experience on the boards of several successful tech startups and multinational corporations. In addition to this we have a 40-person strong team, with a range of background and passions, enabling us to innovate and keep creative.
What advice do you have for other entrepreneurs trying to break into the tech and finance industry?
Never underestimate the power of building strong networks. Meeting people in your company’s sector and understanding where you are missing key skills is the best way to ensure that all your skill gaps can be covered by people that you trust.
Do you have expansion plans? What do you believe the key to growing this business is?
Yes, with our recently acquired funds we are looking at growing 12 per cent month on month - which we have achieved over the past year. Our workforce is expanding rapidly and by the end of 2018 I expect our team to be 60 strong at least. For now, the key to our growth is expanding our user-base - with our current growth, we are on track to hit 1m account holders by the summer of 2020.
What metrics do you look at every day?
Building a financial services product is very complex, and so there are a lot of data points which we look at. The overall goal is to grow an active user base that love the product.
What’s been the most unexpectedly valuable lesson you’ve learnt so far?
People are much more willing to help and share their knowledge that I first thought. I’ve met so many people along the way whose knowledge has proven vital and I can’t thank them enough for that.
What’s been your biggest mistake so far?
My biggest mistake to date would have to be making a lot of important decisions very early on, which meant that they had to be changed later on - often slowing our progress down. However, you learn from your mistakes and I believe Loot is stronger because of our early failings.
What do you think is on the horizon for fintech industry in the year ahead?
2018 will be a big year for fintech - I believe it’ll be the year it goes truly mainstream. One particular area to watch will be the rise of digital insurance companies - their impact could be huge.
Which similar start-up/s in London are you watching, and why?
My one to watch would be Cuvva. It is building products for a similar market to Loot and is genuinely in with a chance of changing the way insurance works for young drivers.
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