Almost 250k applications since launch.
- London, United Kingdom
Categories: Finance & Payments Digital B2C
Creditspring is a revolutionary subscription-based loan membership. Our goal is to empower hardworking people to transform their lives through access to responsible credit.
40% of the UK population has less than £100 in savings, exposing them to risky and expensive forms of credit which can spiral out of control. Creditspring aims to break this cycle.
In the simplest terms, Creditspring gives people the possibility to rent a safety net of credit.
We have developed a subscription-based service that costs only a small fee per month. With this our members can take out two interest-free loans in a year, whenever they need them.
Our two levels of membership provide either two £250 loans per year for a £6 monthly fee, or two £500 loans per year for an £8 monthly fee with Creditspring Plus.
We believe affordable credit, strategically deployed, has the power to transform lives.
Our aim is to be a better lending alternative to help people avoid problem debt.
We also believe that in order to take back control of their finances, people need more than just the access to loans.
We’ve developed a holistic approach that gives people the tools to improve their credit scores. One of the most important ways we do this is by intentionally structuring our contract so that just being a member improves your credit score.
We also offer practical roadmaps and action plans towards financial stability in addition to a growing network of partner resources.
Substantial accomplishments to date
We have built a word class team to achieve our mission.
Cofounder and CEO Neil Kadagathur 12+ years at Goldman Sachs; BA Economics, Princeton University.
Cofounder and CFO Aravind Chandrasekaran 10+ years at leading financial institutions including Deutsche Bank and Fortress; MA Oxford University.
Our management team includes the former head of car finance at Zopa, a former marketing director at Vanquis, a professor of design, two Startup Bootcamp mentors, PHDs, nonprofit volunteers and more than a few competitive coffee drinkers.
- July 2017: Raised £2m at £6m post-money valuation*.
- August 2018: Obtained FCA consumer credit authorisation.
- September 2018: Went live.
- December 2018: First partnerships with third parties.
- January 2019: Won Moneynet’s Most Innovative Lender award.
- March 2019: Launched our Financial Stability Score.
- April 2019: Launched Creditspring Plus, our second product offering premium membership.
- July 2019: Hit 100k applications for memberships.
*Please note that this £2m investment took the form of a share issuance of 33% share capital of the company as well as a £2m subordinated loan, which is set out in more detail in the Key Information section of this campaign
We have had favourable press coverage in The Guardian, The Financial Times, The Times, Forbes, MoneyWeek, This Is Money, The Sun, and The Mirror.
Key Metrics as of July 2019:
- 3100 current members.
- 120,000 applications for membership.
- 53% Compounded monthly customer growth rate.
- £791k lent .
- 3,000 loans disbursed.
- 6.5% default rate.
- £48k revenues collected.
- 99.5%+ Compounded monthly revenue growth rate .
- 4.4% annualised cancellation rate.
- 4.8/5 stars on Feefo.
- 95% Customer Satisfaction Score on Zendesk.
The main way Creditspring generates revenues is from our membership fees. Creditspring Core costs £6 per month and Creditspring Plus costs £8 per month.
We also have secondary revenue generators from our Financial Stability Portal.
In addition to guidance and special offers we provide third-party affiliate deals.
We plan to continue to add more opportunities to this portal, therefore adding more non-lending revenues to our business.
Use of proceeds
We will use the proceeds of this Seedrs fundraise to continue to meet the clear demand for our product.
Our goal is to acquire 10,000 happy customers in the next 6 months.
Achieving this proves the scalability of our technology, our underwriting and our customer acquisition strategies, putting the company in a good position for a £5-7m Series A raise.
We project a net spend of £1.85m over the next 12 months, broken down as follows:
Interest Expense: £160k
Loan Losses: £194k
Customer Acquisition Costs: £536k
Transaction Costs: £322k
Overhead/Other Operating Expenses: £185k
Projected Revenues: £426k
Net Spend: £1.85m
Please note, Creditspring has two loans outstanding:
1) A £2m subordinated loan which has an interest rate of 8% if paid in cash annually, or at 10% compounding if the company chooses to roll it up (which they may elect to do until the maturity date). The loan is repayable in July 2027 (the maturity date).
2) A $625k loan with 15% interest and a 1 year term, repayable on the 20th of July 2020.
No investor funds will be used for the repayment of debt.