On Sunday, millions of viewers watched as Pouch chief executive Ben Corrigan and chief revenue officer Jonny Plein walked into the Dragons’ Den asking for £75,000 investment for 15 per cent of the retail tech start-up. The duo, with third co-founder, chief technology officer, Vikram Simha waiting in the sidelines, walked away with a deal of a lifetime.
After their pitch, Jenny Campbell offered the full £75,000 for the 15 per cent. This was followed by Touker Suleyman, Tej Lalvani, and Deborah Meaden who offered the investment for 20 per cent equity. Finally, Peter Jones was willing to offer the £75,000 for 25 per cent equity in Pouch.
“We received five offers, so we had a lot of the power in terms of the negotiations,” Corrigan tells GrowthBusiness, a situation that has only happened once before in Dragons’ Den’s 13- year history. “It was an overwhelming but enjoyable experience. And ultimately, we had to do what made the most sense for the business.”
What made the most sense for the business was a joint deal with Suleyman, Lalvani and Campbell for £75,0000 in exchange for 18 per cent of the business, split equally at 6 per cent for each Dragon.
What was it about Pouch that captured the imagination of all five Dragons?
The start-up is a free-to-use browser extension that finds and displays valid voucher codes in a non-obtrusive way while users shop, retaining their attention on the purchase that essentially lowers cart abandonment. Entering the Den, Corrigan’s main concern was whether the Dragons even knew what voucher codes are.
“We were concerned if they’d understand the value of our business. We didn’t know if multimillionaires used voucher codes, if they were familiar with the experience. After the three-minute pitch, we relaxed and really started to enjoy it. None of them asked us what we haven’t been asked by investors before. Nothing really stumped us. I felt that we had them on our side.”
Users are instantly informed of discounts for more than 3,000 retailers, including Dominos, Topman and Currys through Pouch’s pop-up box, which alerts shoppers of codes that are available for each deal. According to Corrigan, Pouch is solving a very real problem in retail. In the UK last year, consumers spent more than £154 billion online, which works out to £422 million every day. Not every site offers discount voucher codes, but Pouch’s founders still believe they could save British consumers tens of millions of pounds every day, while boosting conversion rates for retailers. This is based on internal data which shows the average saving across all vouchers and discounts is 10 per cent.
“When a user buys something using our voucher codes, we get paid a commissioned from the retailer. The thing is, close to 75 per cent of shoppers leave retail sites at the point of payment, because they’re busy looking for voucher codes in other tabs. We massively reduce rate of abandoning the basket by keeping them on-site,” he says.
With the investment from the Dragons, the start-up plans to up its marketing efforts, while working towards mobile and tablet products.
“Our next big milestone is turning Pouch into programmatic offering for retailers,” adds Corrigan. “This means we’ll provide the right voucher to the right user at the right time. For example, if we know a user is buying groceries on Sainsbury’s, we can suggest codes for specifically what they’re shopping for, and can understand what Sainsbury’s should be offering this particular customer.”
Right now, the plug-in is available on Chrome and Safari, and the approvals process for Firefox is in progress. But the future is mobile, says CRO Plein.
“We want to be using our position to negotiate incredible discounts for our users. The more we understand our users, anonymously of course, the better the deals we can negotiate for them. We want to funnel all those learnings to build an amazing mobile product, hopefully by early next year,” Plein says.
According to CRO Plein, the company’s core strength is its team, and with the exposure and investment secured from their appearance on Dragons’ Den, the next phase of growth will see Pouch investing in talent.
“Ben and I met in school and had this idea when we’d be shopping online, but we needed a developer to make this a reality,” he explains. “Later on, I bumped into a friend on the tube who suggested we meet with Vik. We met him twice and felt the chemistry, and brought him in as an equal partner. It’s this dynamic that makes us strong.”
The start-up will be adding to its tech team towards the end of the year, as they eye retailers in Australia, Germany and France next, Corrigan adds. “We’re a year in, but we have a long way to grow.”
