Brief Summary
Mo, Andrew, and Zack present Cupe, a fintech solution targeting the millennial market, aiming to revolutionize banking with personalized services and a focus on university students. They seek $380,000 for 8.4% equity, highlighting their existing marketplace app with 150,000 users and the rollout of a Qpay Mastercard. The sharks question their differentiation and revenue model, but ultimately, they secure a deal with Steve and Naomi, marking the first time the two investors have collaborated.
- Cupe aims to change banking for millennials with personalized financial services.
- They have 150,000 university students on their marketplace app.
- They project significant revenue growth and market penetration in the next three years.
- Steve and Naomi invest together for the first time ever.
Introduction to Cupe
Mo, Andrew, and Zack introduce Cupe, a fintech company focused on changing banking for millennials. They are seeking $380,000 for 8.4% equity in their business. They aim to address the issues of traditional banking, such as poor customer service, lack of innovation, and high fees, by building a bank that customers will love. Cupe plans to offer features like live push notifications for transactions and personalized financial services.
Qpay Ecosystem and Mastercard
Cupe already has a marketplace app with over 150,000 university students, where they can buy and sell items on campus. They are rolling out the Qpay Mastercard, which will allow students to spend money both on and off campus, integrating it with the Qpay app to provide an enhanced banking experience. The card functions like a debit card, and they have already signed up 5,000 students in the two weeks since its release, with plans to deliver 3,000 cards in the next three weeks.
Funding and Market Disruption
Cupe has already raised $620,000 for marketing and operations and is seeking an additional $380,000 to expand their business across Australia. They position themselves as disruptors in the banking industry, which they believe has lacked competition for a long time.
Founders' Background and Banking Issues
Zack is the CEO, and this is the second successful business he and Andrew have founded together. They started by building apps for others and then decided to create their own app, leading to the creation of Qpay. They believe banking is broken because most people rarely visit bank branches and are dissatisfied with the experience. Cupe aims to understand and cater to how students spend their money.
Regulatory Compliance and Differentiation
Cupe operates as a corporate authorized representative of an Australian Financial Services License holder, ensuring they comply with legal regulations. The founders emphasize their focus on a specific demographic as a key differentiator. They provide tailored benefits, such as notifications that help students manage their spending, distinguishing them from traditional banks. A survey revealed that many students avoid checking their bank accounts as a saving strategy.
Revenue Model and Growth
Cupe generates revenue by taking a cut from each transaction and through affiliate relationships, such as selling merchandise on their platform. Last year, they processed $10 million in transactions in Australia, resulting in $220,000 in revenue. They experienced rapid growth in the first year but realized they were reaching saturation in Australia, leading them to expand to the UK, where they are growing 3.4 times faster.
Market Potential and Projections
Cupe aims to capture 50% of the student market in Australia within the next three years, projecting around 500,000 students transacting four to five times a month, with an average transaction amount of $92. This would result in approximately $190 million per month. They estimate they could generate $4 to $5 million in revenue per year with a 50% cash profit margin.
Investment Offers and Negotiation
One shark offers $380,000 for the requested 8.4% equity. Another shark expresses interest but ultimately declines due to existing fintech investments. Steve makes an offer for the full amount at the original terms. Naomi also expresses interest, leading to a rare agreement where Steve and Naomi decide to split the investment, marking the first time they have ever worked together.
Deal Closure and Future Expectations
Cupe secures the deal with Steve and Naomi, who will each take a 50% share of the 8.4% equity for $380,000. The sharks commend the founders, expressing confidence in their future success and highlighting the significance of Steve and Naomi's collaboration.
