Divido offers finance solutions to retailers and others to ensure higher sales of products, but does so for less fees than previously were available. Here, co-founder and CEO Christer Holloman explains how the company is taking its platform across the globe.
What is the business, when was it started and what were you doing beforehand?
Divido is becoming one of the world’s largest point of sale finance solutions. We offer retailers, lenders and payments facilitators the option to let their customers pay monthly for any product or service. What makes the business unique is that we are not a lender ourselves but draw upon several lenders which leads to higher acceptance rates and lower fees for all. The platform works both in-store and online and will be available in 10 countries by the end of the year in Europe, North America and Australia.
I started Divido in 2014 with my two friends, Fredrik Borgquist and Anders Hallsten. Before then, I was employed by the job reviews start-up Glassdoor.com. I was their first hire outside the US and set up the operations in EMEA. The company recently sold for $1.2 billion.
How did you get the idea, and what opportunity did you see when you started the business? What are your sales and what do you expect the turnover potential to be?
Point of sale finance has been around for 50 years and it hasn’t evolved much during that time as the big incumbents haven’t had a reason to change. I had been looking to start a company that would be able to offer a better experience for all involved – merchant and end customer- and so carve out our own niche in the process.
Divido levels the playing field by helping lenders supercharge their own capabilities. Now, they have access to a platform that benefits retailers, payments facilitators and their end-customers.
We have been operational for three years and next year Divido will have processed its first $1 billion dollars of credit applications.
How did you finance it and what were the challenges of that?
We raised £5 million through traditional seed funding secured by pitching to venture funds. And we’re currently going through a Series A funding round as we speak. The challenges we’re overcoming mirror those many FinTechs are facing: can you show sustained revenue growth? How many customers are you signing up? How big is the addressable market? What is great about Divido is that we are a very lean organisation.
As we don’t lend money directly, with that being the job of our lending partners, the capital we raise goes towards creating new features on the platform and expanding our operations.
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What were your key marketing strategies?
Like most businesses we use a number of channels to attract customers; focusing on digital acquisition, PR and events, ensuring that we are getting our message out there to the fintech community, as well as to our target retailers and payment facilitators. Although we have a broad target customer base, from SME retailers to Enterprise, as well as banks and lenders that can licence our platform, it’s important that we use the right marketing strategies in the right places.
What are the revenue streams?
Divido sells its solution to retailers, lenders and payment facilitators. We have four revenue streams; ideation workshops where we provide consultancy to interested companies, then once abroad we have a low set-up fee, monthly subscription and then small ongoing transaction fees.
What are the main challenges you have experienced and see?
The main challenge is time, there just is never enough of it. We’re a rapidly growing company. From 2016 to 2017, the volume we financed grew by 466 per cent! So far this year, the numbers are even better, but we’re still racing as fast as we can to meet demand. For us, time will continue to be our biggest challenge for the foreseeable future.
What advice would you give to early-stage businesses looking to disrupt markets?
If you’re still at the ideas stage, you will find yourself bombarded by opinions, articles and podcasts bestowing advice. It was the same for us, and you know what helped? We stopped procrastinating, stopped refining our business plan. And we stopped applying to accelerators and incubators. Thinking about doing something is your enemy. Doing something today, and not tomorrow, is your friend.
Focus on putting together a max 10 slide pitch deck and an animated video and start showing it to potential clients, those that would be paying for your product or service. If you’re a) afraid or unable to get in front of prospect customers, your business will fail b) if you’re not able to get them excited and want to sign up and pay, you will fail. If either of these things relate to you, you should consider getting a normal job.
If you have already launched, I would spend all your time getting in front of more potential clients. Worst case – they don’t sign up but give you feedback to inform what you should focus on. Best case – you make a sale!
Christer Holloman is the CEO and co-founder of Divido, a platform for retailers, lenders and payment providers to offer their customers the option to pay monthly for products or services.