Campaign Success: Chip
Chip is a Fintech app whose mission is to build the world’s best saving & investment account. To date, the company has successfully launched five campaigns on Crowdcube – most recently, raising £11.3m from over 8,000 investors. We spoke with Co-founder and CMO, Alex Latham to hear their Crowdcube success story.
You’ve now successfully launched five crowdfunding campaigns on Crowdcube. What is it about crowdfunding that keeps you coming back?
As a marketer, I love getting products out to the world and as many people shouting about it as possible – Crowdfunding is the best microphone you could wish for!
We now have an army of 16,000 investors who are our biggest advocates and have been shown to be four times more likely to refer friends, than any other Chip user.
What types of investors participate in your crowdfunding campaigns?
To date, our campaigns have almost entirely been backed by our customers (I’d say about 90%) with a few larger Angel Investors acting as leads. Thanks to crowdfunding, we’re now in a very strong position to have early conversations with institutional investors – which we will need to achieve our vision.
Do your crowdfunding campaigns have an impact on user growth?
Yes, we always see a real increase in user growth during our campaigns. The biggest time this happened was, in our second crowdfund when we received the largest number of investors ever on Crowdcube’s platform – beating Monzo at the time. Our user growth skyrocketed – we went from being unknown Fintech to suddenly being more successful at crowdfunding than Monzo and Revolut.
Most recently, you raised £10m in 48hrs on Crowdcube. Could you tell us more about this campaign?
This was our fifth crowdfunding campaign and like the ones before it, was a very stressful process. From an external point of view, you would think we’d be more confident in knowing what the outcome was going to be but honestly, it’s still absolutely terrifying – particularly this time around with everything going on in the world and the fact this campaign was a convertible round, which many advised us against.
How did you prepare for your crowdfunding campaigns?
We more or less followed the same playbook – taking an audience and doing everything possible to turn them into brand advocates before the campaign launches.
This starts a few months out with preparing all of our content for the raise – my advice is to have as much content as possible, as people love engaging with it.
About six weeks out, we start communicating with our user base, organising Zoom Q&As and getting people excited about the raise.
We then launch our pre-registration page and allow people to express their interest – at this stage, we simply ask for their email address and not the amount to avoid intimidation.
On the day of the launch, we push through our pre-registration subscribers in batches, rather than at the same time to avoid crushing Crowdcube’s site (which happened to Freetrade). Once there, for many, it’s just the formality of hitting the invest button as they have been exposed to all the information ahead of the campaign. We always find that our conversion from our pre-registration is very high, near the 50% mark. I remember in our first crowdfunding campaign, we had 1000 signups from our 20,000 userbases and saw around 90% investing, which was pretty amazing.
How does Chip approach the disclosure of information for your campaigns?
We’re extremely transparent with everything, almost to the extent that sometimes I think we’re being too transparent! I personally think that in our space (Fintech), everyone is so focused on what they’re doing that even if they did find a gem of information from a competitor, it’s very unlikely that they’re going to completely ditch their game plan and try and steal a different idea. Crowd investors want to see that transparency and I think it’s only fair to give them all the information to conduct their own DD and make a judgment call.
This transparency continues post raise as we update investors on a quarterly basis and have a private Facebook group with nearly 10,000 members and a community forum for investors to engage and ask questions.
Will you continue launching crowdfunding campaigns?
From the very beginning, we have used crowdfunding as a way to encourage our users and share our success. In the future, it’s likely our rounds will include institutions, but we will fight to enable our loyal crowd investors to invest on the same terms. So yes, I hope so!
What would be your top equity crowdfunding tips?
1. Identify your audience
Before evening thinking about crowdfunding, you need to identify your audience – whether that be your friends, family, customers or angels investors. These individuals will (hopefully) be your first investors in your campaign so it’s extremely important you know who you’re pitching to.
2. Get buy-in, before launch
Crowdfunding is all about creating a community of advocates who believe in your business as much as you do. What you need to think about is how am I going to create this community? Forget about crowdfunding for a second, forget about raising money, how are you going to take the audience you have in front of you and transform them into advocates over the course of 6-8 weeks? If you can get them on board and aligned with your vision, investing should just be a formality.
3. Stand out!
There are going to be many other campaigns live on the platform at the time of your campaign. What are you going to do differently to stand out and be memorable? I see a lot of pitches with dull videos that last far too long and I think it’s a big mistake. Our approach has been to create a succinct video that sells our vision but does it in a fun way that people are going to engage with.