Things have taken good shape with the business angel initiative. We incorporated our firm (Angels Unleashed - AU) in April 2015. True, that was only a formality, as a lot of ground work had been done in the previous 18 months. We worked out the operating model for the team. Prem and I would do the engagement with start-ups and investors, while Kiran would own the due diligence and market research.

We looked at a few start-ups in April, primarily sourced through a handful of angel groups whom we had partnered with. These angel groups had their own funnel of sourcing start-ups and we refined the list even more to align with our plans. I was keen on investing in Fintech via AU and the Jan pitching event in the city gave me a good list of start-ups to consider. Out of the illustrious line up, we shortlisted two firms – Divido being one of them. Divido is a POS credit firm that used proprietary technology to link retailers to underwriters and provide credit to the customers.

We decided to initiate conversations with them. The use case was this – if you went into DFS store on the high street you would be able to get an interest free credit, but it is not the case when you buy a sofa online on the DFS website. Divido provided that functionality. There were a few existing players in this space, but the market was still nascent and had enough in it for another good one. On further market research we found a few interesting stats that helped the decision,

   -    68% of all retail spending that takes place on high street is made using credit card, of which 60% are converted into EMI with an average ARP at 19.90% – 39.90%

   -    About 20% of customers cancel purchase over lack of credit

   -    Consumer finance is a growing industry with a market capitalization of £66.5 Billion

   -    Amongst competitors such as Klarna, V12 and EKM Powershop, Divido either had a different business model, market positioning or go to market strategy which felt right.

   -    The closest business Pay4Later were focussing on as different market segment

There were a few things that we liked with Divido apart from the use case and market positioning itself. We liked Chris Holloman (@holloman) the CEO, who came across not only as a strong salesman, but also as a street smart business man. He had a good technology partner in Fredrik Borgquist (@borgquist). The fact that they had the Chief Product Officer of WorldPay on board not only added credibility to the business, but also indicated a possible exit strategy. We did a few weeks of thorough due diligence, and when we shared the results with the angels in AU, we had two more investors who were interested.

We had the deal complete by end of May, and we have already started helping Divido with their go to market (GTM) strategy. When we met them for the strategy discussion, Chris and Fred mentioned that they had liked the AU team the most from the list of fintech circle investors that expressed interest. They wanted to raise £500k. They ended up raising almost thrice that. Good times ahead!!

- Arun

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