Generally, the most highly vaunted products on Shark Tank are digital or bring in some revolutionary tech. Spare is a product that aims to replace ATMs as it is a digital banking app that centralizes many functions of the bank.
D’Ontra Hughes is the mastermind behind the app. He wants to replace all kinds of ATMs with digital banking apps because he thinks they take up too much public space. Hughes came up with the idea in 2013, one of the few apps Apple has whitelisted.
What makes the product stand out is the fact that it’s something that makes things easier for people and much cheaper. People don’t have to worry about the processing fee of an ATM with this bank. Spare has merchants that it pays so that they can give cash to users if they ever require it.
There are other apps out there that are doing the same thing as Spare. However, there are none in the US Market, and Hughes wants a Shark to help him enter the market here. His main goal with the current pitch is to find someone to help him find more merchants with the app.
Now that we know more about the app, we should look into how the shark tank pitch went for the product.
Hughes enters the tank and tells the sharks he’s looking for $500,000 for 3.5% of his business. If the valuation seems too high, then you’d be right on the money because the Sharks, too, audibly gasped.
Once the initial shock wears down, Hughes continues to tell them about the app. He means that the app allows customers to request the cash from a merchant who wishes to participate. Customers can also have funds in their bank account or pay pal to the app.
He further explains that this is beneficial to the merchant as well as it can get them a lot more traffic which they would otherwise not get.
He also tells the Sharks that he wants to break into the market in the USA. He mentions that the company has already managed to raise $347,000 in various funding rounds, so there are people who believe in the company and want to see it proceed.
He doesn’t disclose any information about merchants but mentions that he would need people who can work part-time to be merchants for the company. The app is currently only available on the Apple Store but is development to be available for Android.
Once Hughes explains the whole business model, the Sharks ask him even more questions. The Sharks want to know how the expansion will come about and if he even plans for it to happen. The Sharks also don’t quite agree with the business model. They don’t think the merchants will want to keep cash on hand for the app’s customers.
None of the Sharks seems all that interested. However, Mark stays on. He makes an offer for $500,000 for 12% and 2% advisory shares, which Hughes can’t help but accept.
The company is still active. However, it’s unsure that the deal with Mark went through. Regardless of that, they have annual revenue of $4 million.
Our Review of Spare
The digital banking app is one of the best things to come out of Shark Tank. However, there are people who would like it and those who don’t. We have thus mentioned some pros and cons of the app that can help you decide whether or not you want to invest in the app.
Pros of Spare
- It can replace ATMs. ATMs are bulky and ruin the scenic beauty of any space they’re placed in.
- It allows people to seek cash from merchants. If people ever feel like they need to access some money, they can go to the specified merchants, and these people will provide the cash to them. It eliminated processing and maintenance costs that go into ATMs.
- It acts as a virtual ATM. You can transfer money from your account in any way to pay a certain amount. There’s also the fact that you never haveto work an ATM again as it would all be online for you.
- It is an app that lets you take out money; youcan get the money from a merchant whenever you want.
- The app helps with cash withdrawals and any transfers you need to make.
Cons of Spare
- There aren’t any significant cons that we can think of.
Who is Spare For?
Spare is an app for those who don’t enjoy traditional ATMs. If you have a problem with the interface of an ATM or you think that they don’t add to the aesthetic of a cityscape, then Spare is for them. You don’t have to worry about withdrawing cash, so you can quickly withdraw money whenever you want.
Many people also hate that ATMs come with a percentage of the processing fee. If you don’t want the processing fee to be something you give up, then Spare is for you. It’s also for all of those people who wish to ease when processing any cash withdrawal.
Are There Any Alternatives?
There are no current alternatives to Spare in the US. Thus, Spare can capture the US market share with relative ease. You don’t have to worry about money problems at all as the app managed to solve all of them for you. You don’t even have to face any danger when using the app as you would when using traditional ATMs.
Our Final Thoughts
There will be many apps in the future with the functions that Spare has managed to emulate. But Spare has set the lead, and it’s quite an excellent app as it limits the use of ATMs.
It serves the consumer to decide for themselves the kinds of banking services and cash withdrawal services they want to opt for. Virtual ATMs can be extremely important for people if they’re in places where ATMs aren’t readily available. Thus, they’re necessary.