Plum is our generation's financial assistant. Helping save & invest in things that matter, & avoid bills
|Location||London United Kingdom|
|Sectors||Finance & Payments Digital B2C|
|Incorporation date||14 Jan 2016|
Plum is your personal money assistant that uses AI to manage your money the way you should but can't be bothered to. You connect your bank account to Plum via open banking, and we use the data to make you better off across 3 pillars of financial well-being:
- Save: Plum uses your history of transactions to save money for you automatically without any additional input from you.
- Invest (launching now): Choose from theme-based funds to express your view on world trends like Tech, Ethical companies and Emerging Markets, risk-based funds for long-term diversified investing or P2P lending for more stable return. We believe that this is the first product of this kind in UK.
- Don't get ripped off: Your bills are analysed and better and cheaper alternatives are provided. (Utilities, Loans, Credit Cards, Mortgages)
Plum’s growth has been very strong, in the last year we grew over 6x from 21.6k users to 130k+ users and had 80+ press mentions and were live on Sky.
The current round of funding is led by Venture Friends a prominent European VC.
Plum’s team is driven by a clear mission: Get an average user £1,000 more in their savings and investments each year.
Over a lifetime the amounts are staggering. We estimate that the average Plum user can be £50k-£200k wealthier over their lifetime. This is the breakdown we estimate an average user leaves on the table:
- Switching: Utilities, Insurance and Credit estimated to save: £600/yearly
- Forgotten Direct debits: £480/year
- Saving & Investing: £100,000 over a lifetime.
To achieve its goal Plum needs to continue to innovate on how it uses data and how it interacts with consumers to serve their needs. The data in the bank account of the user allows Plum to uniquely understand the user’s personal circumstances. By adding the conversation with the users in chat around their financial goals, Plum aims to end up knowing its users from a financial perspective more intimately than any other company!
We hope to truly unlock billions of value which is currently being wasted.
Substantial accomplishments to date
August 2016: We closed a £350k seed round from notable investors like OneFineStay Founder Demetrios Zoppos and the 500.co microfund.
January 2017: 4.5k users are on the waitlist when we open the product to the public. The FT and the BBC have called Plum an AI driven solution to savings.
May 2017: We are named “Tech Company of the Year” at the National Technology Awards. Launched a bank balance update and first version of our spend analytics
June 2017: 22k registered users. Raise £920k on Seedrs. Partner with Octopus Energy, a green energy provider to release an alpha version of our “switching” to save users over £200 a year.
August 2017: Join the 500.co pre-series A accelerator in Silicon Valley. Elise Nunn joins from Deliveroo to lead support and operations.
Nov 2017: Wander Rutgers, a product lead from TransferWise joins Plum leading product.
Feb 2018: On the FCA register under Resolution Compliance for arranging deals in Investments.
May 2018: 130k users on Plum.
June 2018: Major release of the investment product with live beta users starting to grow their money via 3 themes:
- Tech, giving you exposure to Google, Apple, Facebook and others.
- Emerging markets and get exposure to China, India and Brazil and others
- Ethical for exposure to companies that have ethical practices high on their list.
There are 3 main sources of revenue for Plum which we expect will allow for a well-diversified and resilient revenue stream:
- Revenue on savings: Interest eventually earned on the savings would be fairly split between us and the users. This isn’t in place currently as development of the investment product was prioritised.
- Revenue on investments: Plum will allow users to open an ISA or a GIA to invest in funds and P2P offerings. We expect that revenue for Plum will be £1 +0.15%. We believe that 0.15% will be the lowest AUM fee in the market.
- Revenue on switching products: We intend to identify ways that our users can save on their big bills (utility, insurance, debt) and recommend new cost-effective alternatives. We will then receive an introductory fee from the provider. As a benchmark, MoneySuperMarket generates £316m in revenue a year by following a passive approach customer reaches out first vs our proactive approach which is bound to be more successful.
Use of proceeds
This round is being raised as part of the launch of the investment product. With investments launched and a very clear recurring monetisation strategy deriving from this in place we consider that we are in a very good position to start scaling acquisition with a very unique proposition in the market. We intend to invest in 5 key areas:
- Team: Add 5 engineers to the team. Add head of Marketing and a Compliance officer.
- Revenue: We will focus on scaling our investment product take up while testing switching revenue.
- Expand: Within the year aim to launch across EU and one more international market.
- Product: Launch an app (it’s now the right time with the investment product out). Advance the spending insights we give to users which will lead to making switching a more central part of the product.
- Marketing: Keep scaling acquisition. The head of paid social at TransferWise is an advisor which is a great help in growing acquisition add a marketing lead.
Key Information – Share classes
The lead investors in this round, representing £770,000, will receive preferred shares. Seedrs investors will receive ordinary shares that are eligible for EIS.
The preferred shares have a right to receive 1x their initial investment ahead of ordinary shareholders in the event of a liquidation, distribution of proceeds or exit. These are non participating preferred shares meaning that once 1x the initial investment is paid any surplus is distributed to the ordinary shareholders on a pro-rata basis. The preferred shares are convertible to ordinary shares; the preferred shareholder can choose to participate pro rata alongside ordinary shareholders (ie if this would give them a greater return than the 1x preference) OR receive their 1x preferential return.
Plum seeks to address and improve the management of personal finance for the estimated 12 million individuals aged between 20-40 and earning £16-80k within the UK. This number rises to 91 million across the EU.
These 103 million individuals are digital natives who have no-one to turn to for advice on how best to financially prepare for the future. Plum is dedicated to filling this void by bringing the latest technology to a stagnant sector, providing a single a tool to manage and optimise savings, investments and spending.
How underserved are individuals?
- In 2014 UK household savings were estimated to stand at £3.5 billion. Given current interest rates and inflation, this money is idle and earning no return. With Plum this can dramatically change.
- At the same time it is estimated by the Competition and Markets Authority that UK households are overpaying on their energy bills by more that £1.4 billion annually.
This is our market.
Characteristics of target market
Plum’s algorithm has mass appeal. Our user base spans all age-groups, income levels and backgrounds, yet share the following characteristics:
• Busy, sociable and living for the moment, with little time for “life admin”;
• Untrusting of banks and unsure of who to turn to for financial advice; and
• Comfortable and expectant of using technology to simplify their lives.
This demographic has become accustomed to the disruption and advances that technology has driven across all other aspects of their lives where at the click of a button you receive an personal taxi-driver. Currently we believe there is no personal financial advisor at the click of the button that looks out for your holistic financial well-being!
Financial advice basically hasn’t changed since the time of our parents and Plum intends to spearhead this change in the market.
There are two fundamental principles that drive our marketing strategy, influenced by our experience at TransferWise, Deliveroo and Tictail.
• Listen and measure: We religiously measure the value of our product by measuring our users’ willingness to share with their friends.
• Product trumps all: We focus on the product and aim to build features that deliver substantial value to our users.
These are our 3 channels:
• PR and buzz: We have a story to tell and have had great pick up, This year we have had 80+ articles and were live on Sky news .
a. Paid: Users can invite their friends to sign up and for every 3 successful referrals we give £25.
b. Unpaid (word-of-mouth): Deliver value to users in order to maximise tweets like:: “Woop! In a month you've done more saving for me than I have in a year”.
• Paid Marketing: Plum looks to accelerate its growth by using paid marketing and have secured Russell the head of paid social from TransferWise as an advisor.
We believe that we’re a first mover in the digital financial advisor space which is now emerging.
We distinguish ourselves from the competition in the following dimensions:
We focus on bringing value: We automate your financial life by saving money for you and helping you invest those funds so you can actually achieve your financial goals.
We sit on top of all major banks: We’re not a bank so we don’t need people to switch to us from their current bank which makes the barrier to join Plum very low.
Great customer experience: We obsess over every touchpoint we have with our customers, from how we craft our chat messages to how long it takes for our support agents to reply.
New, edgy interface: Our target market is chat-obsessed so having a conversation with your money, more so over Facebook Messenger, makes Plum unique.
Team: Our team is made up of people previously at some of the most successful companies such as TransferWise, Deliveroo and Tictail amongst others.