The launch of UK-based startup Tendr generated quite a buzz in the media earlier this month, with phrases like the ‘Tinder for equity crowdfunding’ or the ‘Tinderisation of crowdfunding’ dominating headlines. Most media outlets were focused on the FinTech startup’s unusual, yet strategic, move to incorporate the swipe-to-like motion popularised by dating app Tinder. Perhaps what’s more interesting is the startup’s potential to become a major data player in the world of equity crowdfunding.
Founded by Lex Deak, Tendr is a mobile aggregator that pulls in and displays campaign content from equity crowdfunding platforms in the UK including Crowdfunder, Seedrs, Angels Den, InvestingZone, Angel List UK, and Funding Tree. Though transactions don’t take place within the app, investors can scan and bookmark investment opportunities for later consideration.
In the first week of its launch, Tendr gained almost 2,000 active users and had over 30,000 actions (e.g. ‘like’ or ‘dislike’) taken on the app. In that time, it also gained about 2,000 views on campaign videos.
Deak, who is also the founder of QVentures, a vetted global network of sophisticated investors, came up with the concept for Tendr about 18 months ago when he was looking for a way for QVentures to condense its emails to investors. It wasn’t until the beginning of this year that he decided to work on Tendr in full capacity, however, the inspiration for Tendr spawned from the need to keep things simple and succinct in the age of information overload.
“I’d initially intended to build a mobile app for our investment network with QVentures and for it to be the primary channel of engagement. As it turns out, QVentures is actually relationship based business and the technology would have been over-engineering a solution to a problem that wasn’t really there,” said Deak.
Deak also pointed out that essence of a pitch is really simple. In the context of equity crowdfunding, there are five key pieces of information investors would be looking at when scanning campaigns for potential investment opportunities. A hypothetical example would be: ‘DogPaws – Facebook for Dogs’, ‘Raising $1.5 million’, ‘Barry Trumpet has invested’, ‘90-percent funded’, and ‘Closing on Wednesday’.
“If you’re interested in that type of deal, then this is enough information for you to go ‘Let’s sit down have a coffee with the guys behind the business and learn a bit more’,” said Deak.
With more and more equity crowdfunding platforms springing up, including ones targeting niche markets like real estate, it’s becoming increasingly difficult and time-consuming for investors to stay abreast of all the hottest deals, according to Deak.
“We all live in an age of information overload, so if you can really get down to the essence of a deal quickly, then in theory you could increase the efficiency of the deal-making process,” said Deak.
If investors spot deals on Tendr that they’d like to pursue further, they are redirected to the original platform featuring those deals. Deak said that, from a commercial perspective, offering investors the option to transact through Tendr is very exciting, however the startup would face a number of regulatory challenges.
“It would be nice, but it would require a global change in the regulatory landscape for us to do it or for us to innovate a new structure. For the time being, our focus is just on increasing the traffic to crowdfunding platforms, boosting transparency, and making the whole process easier and more accessible,” said Deak.
There were a number of reasons for incorporating the swipe-to-like motion made popular by Tinder, according to Deak. The first, he explained, is because he felt it was an efficient way to flick through and bookmark deals.
“There’s no shortage of finance and business investment related apps out there that have interesting content, so as well as being an efficient way to flick through and bookmark deals, it’s also a pleasant way to read and learn about what’s going on in the startup ecosystem,” said Deak.
Although he believes the essence of a pitch can be condensed into very small screen real estate, he stressed that Tendr is not encouraging people to make reckless investment decisions.
Another reason for incorporating the swipe-to-like motion, Deak admitted, was to spark curiosity.
“I wanted to make some noise … the headline writes itself: ‘Tinder for deal flows’. It’s not something that has been tried before and it’s an interesting way start to a conversation,” said Deak.
“The name is also a bit tongue-in-cheek but it’s helped us from a PR perspective; and I want us to be seen as a funky, forward thinking tech company rather than a static, institutionalised, dated finance company.”
The design has unintentionally, though unsurprisingly, resonated with people aged between 25 to 40 years. Deak acknowledged that older investors may be slower to adopt Tendr, but it’s the Tinder-savvy generation that will be inheriting and creating wealth over the next decade, so Tendr is happy to cater to that demographic.
Although Tendr does not have a monetisation strategy set in stone, Deak said he is open to the idea of implementing an affiliate model that would allow Tendr to take a small cut of any transaction it generates.
Given Tendr is, at the moment, an information aggregator, the value in its offering may lie in data insights. If Tendr is able to not only collect data, but also make sense of that data, and allow investors to maintain a real-time understanding of prospective companies, as well as industry trends and patterns, then it could become a dual discovery and data platform – though the data could be the startup’s biggest moneymaker.
“We’d like to make a good chunk of [data] freely available and have that published on the platform in real-time. We want to be the mouthpiece of the [equity crowdfunding] industry and publish useful snippets of information like, ‘the hottest deal of the week was X, the platform with the most liked deals was Y, and so on’. I think it’s important that we make a lot of this data fully accessible in real time,” said Deak.
“But if a publisher or customer wanted a bespoke report then that would be charged.”
Deak’s approach at the moment is: create it, build the community, and once usage scales, figure out the best way to monetise it.
Tendr has been bootstrapped thus far by the management team, though Deak said he’s looking to open up a funding round in the upcoming months – potentially an equity crowdfunding round – to help finance further product development and accelerate international growth.
Tendr plans on expanding to other countries in Europe, as well as Australia and further afield this year. The startup has already received enquiries from equity crowdfunding platforms in India, Israel, Singapore, Canada, France, the Netherlands and another half a dozen wanting to get involved.
Deak said Tendr will also be offering more filters – at the moment, users can only select which platforms they’d like to see deals from – and will allow users to customise their notifications of new deals. In the next version of the app, users will receive push notifications when a bookmarked deal reaches a certain percentage of funding – say, for instance, 90 percent – so investors don’t miss out on opportunities.
On a final note, Deak said he wants more people to support equity crowdfunding. He acknowledged there’s a vocal minority of people of who are constantly highlighting the risks involved with crowdfunding, but feels there’s far too little spoken about its benefits.
“Perhaps they come from institutionalised backgrounds and are concerned about risk. That’s fine, but there’s not enough being spoken about the fact that in the UK alone, there are thousands of jobs being created from businesses that got funded,” said Deak.
“Most of the time, investors will lose money, but when they succeed, it’s going to cover the losses. You will make it all back and then some.
“What people need to remember, in addition to job creation, is that entrepreneurs are creating new businesses that will shape the future. If you lose money, well that happens. What about the innovative life science and medical companies that are getting funded? What about the increase in employment? What about the benefits for the economy? This is something I feel passionate about. Tendr is also about getting this message across.”
Image: Lex Deak, Founder, Tendr. Source: Provided.