In the last few years, the fintech industry has undergone a significant change, only accelerated by the pandemic. Fintech companies have continued to empower consumers with various innovative financial solutions, simplifying access to financial instruments like saving, investing, and banking. Plus, the year 2020 has shifted the priorities of many consumers from spending, to saving and investing.
British startup Chip has fit the trend perfectly. It offers an automatic savings app designed to simplify and automate the process of saving money. Founded in 2016 and headquartered in London, this September, the company raised €11.5 million in 48 hours as part of their Series A.
Today we meet with Simon Rabin, Chip’s Founder and CEO, to discuss how the COVID outbreak affected the fintech industry, how to grow a strong team, and raise funding during a pandemic.
Hello, Simon! Thank you for being with us today. Can you give us a short overview of your journey as an entrepreneur and why you decided to found Chip?
Thank you, it’s a pleasure to speak to you. The idea for Chip was born around the same time as my first daughter. As my wife and I were expecting our first baby, we became more conscious of our finances. Despite us both having good, stable jobs, we weren’t good with money, nor were we good at saving. There wasn’t an easy and painless way to save and grow finances. I wanted to change that, and so I started Chip. And the rest, as they say, is history. I still think there is a great deal of so-called gatekeeping when it comes to financing, but fintech has been able to shake it up. Democratization is key to why fintech has been so disruptive and the reason why it’s the future, and I’m delighted to be part of this future.
2020 has been a challenging and unpredictable year for many businesses. What has the year been like for Chip?
2020 has been indeed unpredictable and challenging. I’m sure it’s a view we all share – it’s certainly not what we expected or planned for in early January.
The impact this year had on both macro, and micro levels is immeasurable. It caused a seismic shift in people’s incomes, financial attitudes, and priorities from a personal finance perspective.
On a more granular level – looking at how that changed our users’ behaviour – people became more aware of the need for a financial safety net. They started planning more. As spending dropped, saving skyrocketed. We saw a massive spike in user numbers and amounts put aside – our user base doubled, and we crossed the 165 million mark for users’ saving amounts.
In September, Chip landed €11.5 million via Crowdcube and the Future Fund. How did you decide to do crowdfunding in the midst of the pandemic?
The past year validated an enormous demand in the market for a mobile-first digitally native challenger platform for savings and investments. We’ve grown massively in this time, so it was a natural move to accelerate this growth.
I think the most powerful way for a business to grow is to have thousands of investors advocating something they believe in, and our 15,000-strong community has helped us get where we are now in more ways than simply investing.
Since 2018, your team has grown from 20 to 80 people. What tips would you give to someone who wants to build a strong team?
I think the advice I’d give now is a bit different from what I would have said this time last year, mainly because of how much the pandemic has shaken up the way we all work.
We still have our offices at Chip located in Central London, but we mostly work remotely now, and our team is very spread out. It works very well for us, and I’m proud of how our team has adapted to the change. This means that as an employer, you are no longer limited to where you find your talent. Make the most of it, look beyond the big cities or even outside of the country of your company’s residence.
You mentioned Chip+1 earlier. What is it?
Chip+1 is our brand new account offering the UK’s highest return of 1.25% (variable) and FSCS-eligibility.
With rates plummeting and high-street banks offering an average of 0.01% on their savings accounts, the returns on Chip+1 are 125 times better than those provided by most big banks. It’s the highest return a saver can get on money in an FSCS-eligible savings account with easy access.
To bring this chart-topping return, we flipped the traditional approach to marketing by prioritizing our users and giving a chunk of our advertising budget directly to our than in return for recommending Chip to their friends. This allows us to grow our user base organically by attracting people who genuinely love Chip and recommend us to their friends.
What are the 2021 plans for Chip?
In a nutshell, we are building the best savings account in the world. We’ve come a long way since our auto-saving chatbot days. Since then, we’ve grown up, matured, and introduced a whole suite of new features and accounts. The current focus of Chip is on enabling users to accumulate long-term savings and build wealth. Everything we do is laser-focused on delivering that.
Ultimately, we want to enable our customers to feel free to live the life they want – although it sounds a bit materialist. Still, we firmly believe that the key is to give them the tools to accumulate the most money possible and make sure that money is growing with their ambitions.
What do you think of the future of fintech? Any trends we should watch out for?
The reality is this industry is just getting started; in particular, the power of Open Banking, AI, and mobile-managed finances is only just beginning to be unleashed.
All of these have contributed to and will continue to drive the democratization of finance. Fintech will allow for more simplified, streamlined, and easier access, leveling the playing field. The age of legacy providers in the wealth sector is numbered. The era of democratized finances is already being ushered in by the fintechs, including Chip.
What is your advice to entrepreneurs looking to launch their own fintech company?
This might sound too simplistic, but I think it’s as straightforward as making sure you find a problem that real people face and do your best to solve it.