Trezeo is the only business account helping provide financial certainty to the self-employed.
- City of London, United Kingdom
Categories: Finance & Payments Digital Mixed B2B/B2C
- Social Media
- Company number
- 586176 (Ireland)
- Incorporation date
- 19 Jul 2016
- Investment sought:
- Equity offered:
Employees get the benefit of a regular income, statutory sick pay, paid holiday leave, payment into a pension, access to insurance and other perks.
But what about the self-employed? No one helps smooth out their income across busy and slow periods. They certainly don’t get paid when they’re sick or go on holiday. The income volatility and uncertainty that comes with being self-employed often means that it can be a challenge to look beyond the next week, and even the next gig, so providing financial security for their family and saving towards a pension is a luxury that few are adequately prepared for.
Trezeo’s income smoothing business account provides a consistent weekly pay cheque and access to money for emergencies. We believe it provides financial peace of mind and builds a foundation to access other financial products in the future for the 4.8 million UK self-employed.
People like the freedom and flexibility of being self-employed and it's on the rise.
This is brilliant, but we don’t believe that services supporting the future of work are keeping up with core issues of income uncertainty, inability to save or access to mainstream financial services.
Many self-employed are left with few options when bills come due during a slow period. They may use unapproved overdrafts, credit cards, or take out payday loans, all of which can have outrageously unpredictable and opaque fees. We've seen that many people are underserved for financial products as high street banks and financial providers struggle to understand uncertain income.
Now’s the time to address this. We've started with what we see as the most urgent issue - unpredictable income - and aim to quickly expand to provide solutions that empower the self-employed like savings, insurance, pensions and even mortgages so that these workers can look beyond their next pay cheque and start building their financial future.
Substantial accomplishments to date
Our initial core source of revenue will be a subscription fee of up to 1% of the income processed through each customers Trezeo account. We anticipate the average weekly earnings through the platform to be approximately £500, per customer, for the first 18-months. On this basis, we believe our subscription fee will be approximately £20 per month, per customer. The subscription fee will be deducted automatically from income that is paid into the customer’s Trezeo account.
As we scale to different sectors and regions, we anticipate that the average monthly subscription fee will increase to approximately £25 per month, per customer, and we may choose to look at a cap as we engage much higher earners.
Beyond our subscription fee, we anticipate earning referral fees and a revenue share on other financial products that we may offer customers.
Use of proceeds
We’re proud to be live in the AppStore and Play Store, to have received approval from the FCA as a Registered Payment Institution, and to be finalising our Consumer Credit Authorisation.
But now the real work begins. This round will give us the resources to focus on three key areas ahead of our plans of raising further capital mid-2019 to scale.
1. DRIVER PILOT
Onboard and service initial pilot customers and partners.
Enrich the core Trezeo account and add additional financial products.
3. CUSTOMER ACQUISITION
Establish a playbook for acquiring customers via partners and directly, while building waitlist demand for scale.
1. Trezeo Ltd is an Irish company and shares for this round will all be issued at a share price in euros of €2.31. Investments made into the campaign in GBP will be issued shares based on a fixed conversion rate to give a share price of £2.02. This conversion rate is calculated by averaging the Bank of England exchange rate over the 5 days preceding the launch of the campaign.
2. Trezeo has applied for High-Potential Startup investment of €250,000 from Enterprise Ireland. If the campaign is successfully completed and funded, it is anticipated Enterprise Ireland will complete a due-diligence process to consider the investment request from Trezeo. Enterprise Ireland is a government body responsible for assisting new Irish businesses grow and develop.
Should Enterprise Ireland approve the investment, it is expected to be invested in the form of Cumulative Convertible Redeemable Preference shares. These shares would likely carry the following rights:
• A cumulative and preferential dividend of up to 8% of the investment per year. The dividend will only be paid if the shares are redeemed or on a return of capital to shareholders of the company, without conversion of the shares to ordinary equity.
• The preference shares are convertible into equity if the Company raises investment from a VC or other institutional investor within five years. They will then convert at the same price as the qualifying investment, subject to a discount ranging from 15% to 55% depending on the time at which the qualifying investment takes place.
Please note that this will have a diluting effect on the shareholders equity holding.
Our target market is self-employed individuals, of which there are 4.8M in the UK alone.
We are currently targeting the estimated 390,000 self-employed professional drivers and riders in the UK, while continuing to grow our waitlist of interest across other sectors.
Characteristics of target market
There are currently 43 million self-employed individuals in Europe and North America, giving a current market opportunity of £13.6 billion, based on Trezeo’s projected subscription revenue of £25 per customer, per month.
The number of self-employed is growing rapidly. If current growth rates hold steady, freelancers are expected to makeup the majority of the US workforce by 2027.
In our view, paid social media and digital advertising is the most effective, immediate route to pilot customers initially. We believe that content marketing, PR and building an engaged community are our key organic channels as we build out our marketing plans.
We see partnerships as an important source of customers to scale. In fact, we've already begun discussions with a number of transportation operators and platforms. Partners may also include relevant service providers, affiliate partners and financial services firms.
TRADITIONAL FINANCIAL SERVICES
Unlike Trezeo, mainstream financial products like overdrafts, credit cards and payday loans can have unpredictable, often very high costs for the self-employed.
Created explicitly for this customer segment, we believe that we are more able to develop the processes, models, products and pricing that make it more cost-effective for us to serve this market than the incumbents.
CONSUMER FINTECH CHALLENGERS
Services are developing to help employees manage their income and get loans, but these are not available to the self-employed. The self-employed also face financial challenges that are different to regular employees.
SMALL BUSINESS FINTECH CHALLENGERS
While there are many new services catering to the self-employed, we feel they don’t address the core problem of income volatility and uncertainty like Trezeo does.