Sydney startup Slyp has secured $4 million to expand its digital receipts tech, and between banking innovation and environmental awareness, now is just the right time for this fintech to shine.
In October last year, Slyp raised $2 million from NAB Ventures and Westpac’s venture capital arm Reinventure.
This time, ANZ has also come on board, as well as Scentre Group, the shopping centre giant behind Westfield in Australia.
Since their $2 million raise, Slyp founders Mike Boyd, Paul Weingarth and Spiro Rokos have been working to develop the platform to the point of bank-appropriate security and scalability.
The team has also been building the infrastructure to make sure the network is ready to receive data from its partner banks’ retail point-of-sale customers.
The vision is to create a single “golden standard of smart receipts that is consistent across retail”, Weingarth tells StartupSmart.
“Now we’re at the tail end of it and getting ready to push the button.”
This funding will be used to build out the core of the platform, to make sure it’s secure, safe and scalable. As they gear up to launch the product, the co-founders will also be investing in marketing and building customer awareness, Weingarth says.
The holy grail
At this stage, Slyp had the opportunity to take on more investment than it chose to.
“We wanted to not bite off more than we could chew and take a very pragmatic approach to our capital raising dynamics and strategy,” Weingarth explains.
The co-founders are, however, likely to raise “a fairly material, sizable” chunk of investment next year.
This round is partly about “getting ANZ into the stables”, and also bringing Scentre on board to create “industry-wide collaboration”.
As a fintech founder, having three of the four big banks and retail players on board “really is the holy grail”.
As a startup, Slyp is independent and agnostic, and can unlock the “ubiquitous network” for those partners, Weingarth says.
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“What they bring to the table is their customers.”
The startup will be able to reach the banks’ partners and customers through their apps. The banks can also provide a retailer proposition, co-branding and act as a reseller.
In this way, Slyp has stayed true to its original strategy.
There has been demand from some retailers for the business to move more quickly, rather than waiting for the banks. But the co-founders have focused on “short-term pain, long-term gain”, holding out to gain access to the customer base the banks can offer.
“That would take us quite some time to get that level of distribution,” Weingarth notes.
“It is a very unique challenge in that, unlike many other fintechs … we literally flip on our solution to millions and millions of consumers or users.”
And it hasn’t necessarily slowed the business down, he says. The team has been optimising the product based on customer feedback and validation.
“We have done a lot of work around what is that golden standard of a smart receipt,” Weingarth says.
“Ultimately, we are in the business of customer experience.”
Australia, and beyond
Weingarth says Slyp is “fairly blessed” to be based in Australia. Four banks hold a significant market share, meaning the startup can get to the “tipping point” relatively quickly.
But, while the team is focusing on Australia for the next 12 to 18 months, it has seen a lot of interest from overseas, and will likely look to enter new markets towards the end of next year.
“It’s a global, everyday problem,” Weingarth says.
“Printing paper receipts is not only a missed opportunity to digitally engage your customers, it’s also a huge cost on the environment,” he explains.
Already, we’ve seen a move away from plastic bags in retail, and people are becoming more and more aware of environmental issues.
“There are hundreds of millions of trees cut down around the world to print paper receipts, and 85% of them end up being thrown in the bin,” Weingarth says.
Equally, most paper receipts have BPA on them, which is toxic and makes them non-recyclable, he adds.
“It’s a really interesting issue that we want to tackle.”
Eliminating paper receipts for good is “ingrained in our culture”, he says.
“Not only from a commercial perspective, but to do our bit for the environment as well.”
A different beast
When building a fintech, something many founders don’t appreciate is the move from proof-of-concept to an actual production environment is “a huge leap”, Weingarth says.
“It’s like going from learning how to drive a car to learning how to drive a plane,” he says.
“It’s a completely different beast.”
When you’re working with banks, you can get a meeting with a bank, and even get engaged for a proof-of-concept project, but moving from that to actual implementation is a whole different story.
It’s difficult to adjust from an operational perspective, but it’s also about finding the right person within the business, Weingarth says.
If you get stuck in the ‘innovation’ part of the business, they may not actually have the funding to take that product live, or get it into the real world.
“Make sure you understand clearly the path towards production, and who the actual business sponsors who have funding would be, to get you to that position,” Weingarth advises.
It’s a very, very long road, he adds, advising founders push for decisions to be made as quickly as possible.
“You can get stuck in a vacuum,” he says.
“As an early-stage company, the last thing you want to be doing is paddling, waiting for different decisions to be made,” he explains.
“You would much rather a quick ‘no’ than a slow ‘maybe’, or even sometimes a slow ‘yes’.”
On the other hand, Weingarth warns against getting frustrated with banks if they don’t move fast enough, or if it feels like they’re not listening.
“Really, it’s about listening to them and taking a consultative approach, and really understanding what their motivations are,” the co-founder explains.
Banks will be worrying about things like compliance and regulation, “that always take precedence over innovation”, he says.
“Be respectful of what’s important to them.”