DicountIF, an ecommerce start-up that rewards customers with cashback depending of the outcome of sporting events, has enjoyed a start to the year that most young companies would kill for. Not only has it hit target in its crowdfunding campaign on Seedrs, but it also reached the semi-final of Virgin Media’s ‘Pitch to Rich’ competition and featured at the start of January on the renowned and much followed Silicon Valley showcase website Product Hunt. Here founder and chief executive Lewis Holland discusses how it feels to have achieved the backing of over 120 new investors for his business and how it took all the ingredients of idea, timing and people to make it all happen.
GamCrowd: Starting with your most recent news, do you see the success of the recent crowdfunding round via Seedrs as a validation of the idea? Is it pleasing to see such a positive response?
Lewis Holland: It’s definitely very pleasing to see over 120 investors backing your business through a crowdfunding raise! There is a lot of work that goes on prior to raise going public on a crowdfunding platform, one of which is validation of the business. Investors on equity crowdfunding platforms such as Seedrs are shrewd and tend to back businesses that already have a good form of validation prior to raising funds publicly. With DiscountIF, we got validation from early users of our first version of the idea, a basic business to consumer site offer unique cashback offers. We really got in the public eye, when we got over 3,000 votes and made it all the way to the semi-finals of a big start-up competition organised by Virgin Media, called pitch to Rich (aka Richard Branson). http://www.virginmediabusiness.co.uk/pitch-to-rich/start-up/discountif/
GamCrowd: You are now in beta – what is the money raised going to be used for?
LH: The funds gained through crowdfunding are going to support further growth with our B2B strategy. We’ve built a discount widget that can plug-in to other retailers sites to offer an alternative to ‘10% discounts’, and instead offer something which engages and monetises better. We’ve closed deals for with some of the biggest sports ecommerce sites in the UK that generate over £75 million in sales transactions per year. We shall keep growing our partners in the lead up to the big event of the year, Euro 2016. http://www.discountif.com/b2b
GamCrowd: Going back to the very beginning, what was the inspiration behind the idea?
LH: A few years ago I was discussing a crazy idea with some ex-colleagues, “What if you could get your money back on anything”. The love for sports and finding a good deal pushed us towards combining the two – ‘buy a product and IF an event happens you get your money back’. There had already been a few large ecommerce sites (Currys) and brands (Toshiba) that used cashback offers related to big sporting events such as the Football World Cup. We wanted to take the promotional concept and scale it for consumers to buy any product and get cashback based on any event. The idea was a good one, there was market validation, the ecommerce industry is in a high growth phase and the timing was right for the team. All the right ingredients to launch DiscountIF!
GamCrowd: How much did previously working at Betfair inspire you in this new venture? Who from Betfair has helped with your venture?
Betfair was a great environment to work at; there were a lot of great people constantly looking to push the boundaries of the gambling market. The network I had at Betfair was absolutely vital to kick things off at DiscountIF. I got support in all stages of DiscountIF’s development. A few ex-colleagues co-founded the business and worked on the early technology and plans. During our latest crowdfunding campaign quite a few have now also invested, including Stephen Ives who was one of the top executives at Betfair.
GamCrowd: How has being involved with the Takeoff incubator in Malta helped in building your business?
LH: When I worked at Betfair I saw the benefits of having dual operations in London and Malta. Shortly after setting up the company in London, we won a seed fund award in Malta. This allowed us to hit the ground running and set up operations at the TAKEOFF Incubator in Malta. The incubator is the first of its kind in Malta and within a short time frame they have made huge leaps themselves. We’ve got a lot of support and unbiased feedback around the bigger picture strategy, investment processes, marketing guidance. All in all we find them a great strategic partner that thinks global, whilst supporting with the daily/weekly challenges of growing a start-up.
GamCrowd: Do you think the focus for the business will be on B2B or B2C in 2016?
LH: Our focus for 2016 is certainly on our B2B strategy. Having understood how our customers engage with our platform directly, as well as the commercials behind it in terms of both converting customers and enhancing algorithm accuracy for profitability, we are now ready to scale the number of transactions that are going through the DiscountIF platform.
GamCrowd: Do you anticipate another funding round within the next 12-18 months and if so from what source? Will you go the crowdfunding route again or will you perhaps move towards getting VC investment?
LH: We are likely to search for further growth funding within that period. Our optimum would be a blend, whereby we’re backed by VC investment together with crowdfunding. There have been a few successful raises done in a similar structure in 2015 and could potentially become more common practice over the next few years.
GamCrowd: What do you hope the trajectory of the business will be over the next year or more?
LH: DiscountIF is establishing itself as an essential tool for ecommerce sites to sell more and engage more with their consumers. Along the way we’re bringing value to both the consumers (fun discounts) and retailers (a better way to retain and engage consumers). We’re already working with some of the largest ecommerce sites in the UK. Over the next two quarters we’re also finalising deals with some key service providers such as marketing agencies to further fuel our growth.
GamCrowd: What have been your biggest lessons in getting to this stage?
LH: Building a successful start-up is not just about a great idea. It is absolutely vital when founding a start-up to have a team that’s dynamic and experienced enough to learn and adapt. The ‘crowd’ has helped us along the way – they voted, they sent good as well as harsh feedback, they invested (and learnt from the ones that didn’t…)