Ollie Purdue, founder of money management app Loot, is only 23 but he hasn’t let his young age get in the way of founding a business.
It was during his time at the University of West England that Purdue became unhappy with his banking experience and took it upon himself to try and improve the system; seeking to address the lack of clarity that people encounter when doing their personal finances.
Like other students, Purdue had a part-time job and although he got paid monthly, he said managing his finances was a real struggle. “I never knew if my money would last until the end of the month,” he added.
Purdue initially turned to a money management app but was soon disappointed with the user experience, as it required him to input his spending manually.
“I’d go for a night out and I’d forget to enter transactions, meaning my spending and my bank balance never matched up,” he said.
Following this, Purdue met with some of the UK’s top banks to enquire why they didn’t offer data-enhanced solutions to help customers keep on top of their finances, but it didn’t take long for him to realise that this was something traditional banks were either unable to do or did not want to offer. So, Purdue built his own solution.
“I built a really really bad prototype,” he laughed. “It wasn’t even a prototype, it had no back end, it didn’t work and most of the buttons crashed. But we managed to use it to get £15,000 in funding from Nick Wheeler who runs Charles Tyrwhitt. That was when it became serious.”
Soon after graduating, Purdue moved to London and eventually took part in the Accelerator Academy, a 12-week training and mentoring programme for tech entrepreneurs.
“I met a bunch of people, including one of our biggest Angel investors, Nick Kingsbury, who’s now on our board,” he said, noting how the invaluable networking opportunities allowed him to come across an expanding network of future investors.
After raising an additional £30,000, Purdue met Filip, who subsequently became Loot’s CTO, and Kyle, who became the firm’s iOS developer. “We built an MVP in 99 days,” he said.
A few months later, in June 2016, Loot raised a £1.5m in Seed round led by Austrian early-stage VC fund Speedinvest, but this, Purdue insisted, was no easy task:
“When you pitch to a VC you’ve got to learn how they speak because it’s very different. I got pretty good at raising money from Angels, but then I met a VC and I just got shot down.
Being able to communicate with investors, Purdue added, is important but as they’re characteristically risk-averse, there’s no such thing as being over-prepared.
“Our VC still laughs about this, but I remember when they asked for our due diligence folder, and I was like ‘what do you want? What can I give you?’ To this day they freak out that we just didn’t have any documents there.”
Despite some relatively minor hurdles, Purdue’s strategy seems to have paid off, as Loot went on to close an additional £2.5m from investors including existing backer SpeedInvest and Global Founders Capital in November last year.
His advice to other entrepreneurs trying to raise funds is simple: meet lots of people, then meet your milestones.
“I used to come into London and meet people all day relentlessly for a few months, just to make sure I knew as many people as possible,” he said.
Perseverance is key. In fact, Purdue noted that a lot of investors turned down backing the startup the first time round, but this didn’t mean they lost interest completely.
“One of our biggest investors originally said no and then came back to us when we kept achieving what we said we were going to achieve.”
Raising money from venture capital investors may have proved challenging, but Purdue candidly explained why he avoided alternative funding routes.
“I’m fairly against crowdfunding,” he stated, “I wouldn’t want people to think that we, their bank, need to ask them for money to survive.”
“I don’t get why FinTech firms are raising money from their users. That terrifies me, if you’re going to protect somebody’s money you’ve got to be beyond that yourself. For example, if I found out Natwest was crowdfunding I’d move everything out of there!”
Similarly to other tech entrepreneurs, Purdue believes his team is central to his company’s long-term vision.
Attracting the right tech talent is a challenge in itself, but so is retaining it and Purdue seems to do so in true startup fashion, placing a significant emphasis on team bonding.
“I force us all to bond,” laughed Purdue. “We have a company policy called Forced Fun Fridays. Every other Friday at 4pm we stop working and do something fun together as a team.”
According to the founder, past activities have included home-cooked dinners and go-karting trips, but although this may seem somewhat cliched, Purdue insisted that encouraging staff to interact proves beneficial in the long-term.
But company culture goes beyond fun Friday afternoon activities and Purdue believes there’s a fine line between managing and micromanaging.
“We recently asked the team what they like about working at Loot and the most popular response was autonomy,” said Purdue.
“They all get to choose how they achieve the tasks we set them, as they’re all the expert at their own thing, so they have complete control over their work.”
For now, whenever a user signs up they receive a card with a unique sort code and account number. The card then links with the Loot app so users can see what they’ve spent and what they have left to spend for the day. It works this out by learning users’ spending habits in order to eventually budget automatically.
Among several new features in the pipeline, he went on to say, is a foreign currency conversion tool, which, when users are in another country, automatically shows their bank balance in the local currency. The firm will gain revenue from the exchange rate, but Purdue argues this is still a smaller charge than that incurred by mainstream banks. With challenger banks like Monzo also making an entrance into the personal finance tech space, retaining competitive rates and benefits for its users is fundamental for Loot if it is to remain competitive.
But Purdue has another revenue long-term revenue stream up his sleeve. Once customers have been fully onboarded, Loot will use their spending data in order to offer tailored deals from retailers.
“Until now, we’ve really focused on building the product, so now we need to actually tell people about it and make a big deal of it,” Purdue said. “We’ve also got some really cool updates coming out in the next few months, and then probably another funding round mid 2017.”
Global expansion is also on the ambitious founder’s to-do list, as he’s hoping to break into the US and beyond this year.
“The next three-month roadmap is crazily hectic. We’ll be updating with a new feature every two weeks,” he concluded.
Purdue has achieved a lot since graduating back in 2014, but it certainly looks like 2017 will be an increasingly busy year for the young entrepreneur.