The fledgling site, chaired by former Tesco Personal Finance chairman Stuart Sinclair, has already raised £2m from investors and Scottish Enterprise in the hope that it will follow brands such as Direct Line insurance and Moneysupermarket.com to become the next essential innovation in financial services. With £500,000 raised this year alone, the company looks to have a higher burn rate than many start-ups.
Chief executive Gavin Littlejohn, who oversees a team of 16 staff, said he and his backers had solved a key problem for the financial services industry: companies cannot sell complex financial products over the internet because they need to extensively screen customers through face-to-face or telephone interviews to assess their risk profile. Similar services such as Mint and Wesabe have already taken off in the US, with Mint bought for $170m (£109m) last year with 1.5 million users.
Littlejohn said: “We are harnessing large amounts of information to make it easier for users to make financial decisions and the financial services industry to sell the right products to the right people. These are very high value pains to solve. These things will not just be nice to have but will be a requirement for the consumer and the industry going forward.”
Having launched in full beta in May, MoneyDashboard is currently serving a “few thousand” users with functions that help them set budgets, check their daily financial positions and monitor different transaction categories and recommends suitable financial products. It is now in the process of adding incremental improvements such as a bigger transaction panel and demonstration accounts to allow users to test the service before deciding whether to input all their financial information.
The company’s existing backers include Edinburgh-based Par Equity and numerous business angels, three-quarters of whom have executive backgrounds in financial services. Although some might increase their investment in the new funding round, the company has turned to the venture capital markets for the first time. If it succeeds in raising the funding, Littlejohn said it would go towards further product development and marketing the brand.
He previously told the Sunday Herald that the business would operate with a minimal marketing budget and rely on word of mouth. He now says: “We haven’t seen lots of television advertising for sites like YouTube or Facebook because people see their value and tell their friends. I am not diminishing our requirement in future for more above-the-line advertising, but we provide a very real service that people can access and enjoy.”
The site is currently adding a “few hundred” users every week. Littlejohn would not give more specific numbers, but said they were on target at this stage. He reiterated the aim to break even in two to three years with “several hundred thousand” users.
“The question now is execution,” he said. “How well do we understand the customers’ needs and how well do we communicate that we have solved the problem?”
