In March 2021, the Lendonomy team set out to raise a €150,000 round to fund their vision to fight invisible poverty faced by millions of young people and inspire them to support and trust each other through sharing and lending money to peers around the world. Lendonomy smashed their target by more than 200%, raising over €330,000 from 434 investors.
After their successful round with Seedrs, we sat down with the team at Lendonomy to discuss their experience raising funds on a UK platform for a Norwegian business.
Tell us about how Lendonomy started? Where has your vision taken you so far?
The story of the foundation of Lendonomy is very personal. Our founder, Anzhelika moved to Norway for business school, for which she had received a scholarship. At that time, she was a broke student, and her scholarship covered her tuition fees and basic living expenses. She came up with an idea – wouldn’t it be great if there would be an app that allowed you to borrow and lend money from your peers, friends and even strangers until you get your paycheck? That was kind of her light bulb moment, but she didn’t do anything with it at the time.
After graduating, she worked corporate jobs for a few years and eventually mentioned the business idea to her superior at work, who recommended that she take it to a startup accelerator. And that’s how it all started, back in 2018. We wound up completing that accelerator program, received our first small amount of funding and started getting the business off the ground.
Tell us about your fundraising journey before Seedrs?
Raising funds was a bit of a struggle for Lendonomy in the first years, as we’re a Norweigan fintech startup, with a lot of regulatory burdens.
In total, we’ve closed three funding rounds. We raised our first €10,000 in the accelerator programme, but after that it was especially tough as we had an idea, but hadn’t yet built the product. As a result, convincing investors was difficult and they were often quite sceptical about the Lendonomy idea.The idea of giving up had been coming to our minds, until we were introduced to an angel investor in Norway who believed in the idea and had quite a big network of investors, most of whom ended up supporting us. That’s how we secured our second round of funding, the angel round, of €100,000. With this money, we built our MVP and took the business to the next stage, prior to raising on Seedrs.
When you came to Seedrs, why did you decide it was the right time to raise a round?
We looked at our peers in the fintech sector in Norway, and saw that some were seeing a great deal of fundraising success through crowdfunding on Norwegian platforms. That’s when we realised that crowdfunding could be a good way to tell our story and reach more people. Almost simultaneously, we were contacted by Seedrs, so it felt like the stars had aligned.
At the time of your Seedrs round, what other fundraising options did you consider, and why did you choose crowdfunding? What were your goals from crowdfunding?
Right before our crowdfunding round, we secured some follow up investment from our existing angel investors. As this was alongside our Seedrs round, they became the lead investors for the crowdfunding campaign. Our main goal for the round was to take the product to market and market it to potential new customers in the process. We also wanted to probe the UK market, since entering the UK had been in our strategic plans for quite a while at that point.
Why did you feel crowdfunding/Seedrs was suitable for your business? Or were there any other platforms that you considered?
The UK is the second largest market for P2P transactions, and it was smarter to raise in a market that is already familiar with what we do. In Norway, our product is very new – almost too new! Open banking is just now on the rise, so people are generally quite reluctant to disruptive financial solutions. The Norwegian market is relatively conservative, but the UK market has been waiting for products like ours, so it was smart to raise awareness in the UK market while raising money at the same time. This is why we choose Seedrs as a partner and not a Norwegian platform.
How did you pitch crowdfunding to your lead investors?
Some of our investors were initially a bit sceptical about us going to a UK platform to raise investment. We eventually managed to convince them that this was the best approach for us at the stage of the business and the application. Revolut was a really good case study to give as an example in order to persuade our investors as Revolut has a very strong reputation in Norway and has a mixed UK/Norwegian team.
Talk us through what running a campaign was like?
The interactions with the investors is the most challenging part of a crowdfunding campaign. The preparation before going live was manageable, straightforward and even a lot of fun! However, once the campaign went live, a whole host of new challenges arose. We opted for a marketing email to the Seedrs investor database, and once that was sent, the influx of questions was huge. Our founder spent 24 hours in a row answering questions from investors! One learning is that if we had known the response to that marketing would have been so significant, we would have definitely prepared more.
What were some of the aspects of crowdfunding you weren’t aware of that turned out to be essential for a successful round?
We didn’t expect that the Seedrs network would have such a big impact on the campaign, but that really allowed us to create more awareness about Lendonomy.
What were some of the highlights of your campaign?
The most entertaining aspect of the campaign was filming the crowdfunding video. We filmed our investors and ourselves and it was a really interesting exercise altogether. You need to really need to think about why you’re passionate about this and how you’re going to position yourself.
When the campaign went live, we must have refreshed the page every 10 minutes. You get so soaked up in how much you’re raising that it becomes a real obsession. The biggest highlight was definitely the marketing email. We were flooded with inbound questions which, despite being a challenge, was hugely encouraging.
What investor feedback did you receive, and how has it helped you navigate your crowdfunding campaign and growth?
We realised that answering investors thoroughly and thoughtfully adds a lot of value, so you really need to go into detail. Some people even said that they invested in our business because we were so good at answering questions, as that showed we knew the business inside and out and that we had a vision and plan for the future. That’s a tip I’d give anyone looking to crowdfund!
Would you ever consider a follow on round on Seedrs?
Our next step would be to go to a Norwegian VC, but first we’ll need some traction. Maybe after that we’d consider crowdfunding again.
Aside from the funds, what have been the long term benefits of your crowdfunding campaign?
We met a lot of great people through Seedrs. We took additional calls with some of the investors, and as some of them were from Norway, we invited them to test the product themselves. We managed to expand our network both in the UK and Norway, and had great media coverage after the campaign which gave us publicity in a few leading Norweigan publications.
We also made a lot of new acquaintances! We started to hire new board members after our campaign and brought interns on board who had gotten to know us through Seedrs. These young people learnt from us through Seedrs and were very keen to work for us, which was really exciting.
How do you keep your community updated/engaged?
We still use the Seedrs platform to create updates, but our investors are also part of our mailing list now. We keep them in the loop about the proceeds of the round and the perks that they will receive. Our bigger ticket investors will also be invited to workshops and we’re planning on interacting with them and seeking their feedback on our product as much as possible.
To find out more about Lendonomy, visit their campaign page.