Summer’s Gone

I haven’t posted for a while, too busy entertaining the kids over the holidays and I’ve been spending my evenings trying to build myself a wood store before winter sets in, as usual I under-estimated how long it would take.

I have however been keeping half an eye on the ECF platforms and since I last posted I’ve made a few small amounts on Plum, Revolut and Edge10.

I’ve also been spending quite a lot of time trying out the many financial applications, bots and services that have pitched recently as well as their competitors, I’ve got some reviews in the pipeline but suffice to say, I liked Plum and Revolut enough to make investments. Revolut’s well polished banking platform is especially impressive.

In other news, Maily looks to have fallen on its ass and has run out of money – it’s still listed as active at the moment but I can’t see it lasting much longer. Enclothed have posted their accounts for the year ended 31st October 2016, their profit & loss account now shows they’re over £1.2m in the hole, from £500k the year before – I do like their offering, but they need to turn things around.

Finally, Crowdcube are now offering £2,000 (for the month of September) to anyone who recommends a company who successfully funds on the platform. As of writing they have just 10 active pitches (versus 18 on Seedrs), it may well be a quiet time of year but this sort of offer doesn’t send a great message to me at least. I haven’t punted on a CrowdCube pitch for quite some time, I admit I don’t look at it as regularly as Seedrs, but I have no cause to – They offer practically zero in the way of follow up, at least with Seedrs I’m regularly checking the discussion and update boards and it takes seconds to scan through any new pitches – Crowdcube really have made a rod for their own back.

 

Artificial Money

PSD2 (EU) and the Open Banking Standard (UK) are regulations that will require banks and other payment servicing providers to provide APIs that allow third-party solutions to access their customers’ data (with consent). The exact timeline for the enforcement of the regulations is unclear, however, they should be in place by the end of 2018

In short, this means a company will be able to develop an application that combines a user’s financial data from a range of sources (e.g. current account, savings account, loans, credit cards etc.) in order to provide a consolidated view. Applications will be able to take this data a stage further and perform analysis in order to provide insights and suggestions about how to manage their money – That’s the theory anyway.

The reason I mention all this is because I’ve seen a spate of pitches recently that will be heavily dependent on these regulations as their solutions roll out. Right now there are live pitches for Plum Fintech and zuper on Seedrs as well as Folio on CrowdCube. We’ve also had a failed pitch from Ernest. Whilst obviously not identical, they are all very similar, they aim to access your account information in order to help you manage your money better, of course, the buzzword of the moment ‘A.I.’ is mentioned in every pitch but how to differentiate and pick the winner, if there’s to be one?

As I’ve already said, Ernest is out – they’ve already failed to raise. Folio and zuper are struggling, they’re both over the halfway mark but traction appears to be slow with tumbleweed currently rolling across both discussion boards. Plum Fintech on the other hand, is seeing a lot of attention, three pages of discussions and over the 100% mark. Does their product justify the marked difference in the success of their pitch? When I read it when it initially went live I didn’t see anything that particularly stood out, it’s savings focussed and their revenue is expected to come from savings interest (split with savers), fees on investment returns and commission earned from getting customers to switch things like their electricity or gas suppliers. I should also mention that the pitch is a convertible with a 20% discount on valuation at a trigger event (another raise, change of control etc.) or after 12 months (at which time a £4.25m valuation will apply).

Plum Fintech on the other hand, is seeing a lot of attention, three pages of discussions and over the 100% mark. Does their product justify the marked difference in the success of their pitch? When I read it when it initially went live I didn’t see anything that particularly stood out, it’s savings focussed and their revenue is expected to come from savings interest (split with savers), fees on investment returns and commission earned from getting customers to switch things like their electricity or gas suppliers. I should also mention that the pitch is a convertible with a 20% discount on valuation at a trigger event (another raise, change of control etc.) or after 12 months (at which time a £4.25m valuation will apply). Finally, I’ll also mention that Plum features heavily in Seedrs’ current advertising campaign on the London Underground. If I recall, WeSwap and VPAR have also recently featured in Seedrs’ LU advertising and they ended up over funding with 2,961 and 346 investors respectively.

I should also mention that the pitch is a convertible with a 20% discount on the ‘valuation’ at a trigger event (another raise, change of control etc.) or after 12 months (at which time a £4.25m valuation will apply).

Finally, I’ll also mention that Plum features heavily in Seedrs’ current advertising campaign on the London Underground. If I recall, WeSwap and VPAR have also recently featured in Seedrs’ LU advertising and they ended up over funding with 2,961 and 346 investors respectively.

The fact that this is a convertible is enough to put me off, I’m still bitter over the Den convertible. Also, despite the regulations, there’s nothing to say that the APIs offered by banks and payment providers have to follow a specific standard – Whilst they will undoubtedly make things easier for third parties things are unlikely to be simple. At least we’ll get to see what’s going on in 12 months time when they come back for more money.