By David Stevenson on Friday 13 July 2018
The FT's 'Adventurous Investor' David Stevenson gives his take on Glint.
Glint, a London based FinTech start-up offering payment cards backed by physical gold, has this week announced that it is starting a Series A funding to raise £15m as part of an overall fundraise. Crucially as part of that campaign, the payments business says it’s looking to raise £1.25m via a crowdfunding exercise with Crowdcube.
The gold backed card issuer says it decided to raise money via a crowdfunding exercise with Crowdcube to “meet demand from clients and the public to participate in this round, as part of an overall fundraise to maximise strategic partnerships and distribution deals in the UK and US and to develop functionality”.
According to co-founder Ben Davies: “We had significant interest from our client base day one to want to invest and the early adopters are our super advocates who help us improve our product for everyone and so its great we can give them an opportunity to invest small amounts at the same terms as our Institutional investors.”
Glint is looking to raise the £1.25m based on a £45m pre-money valuation. Since inception, the firm has raised over £7.5 million in capital from private and institutional investors.
Glint is an e-payment solution using a card on to which clients can load up a range of currencies and then choose to hold that ‘store of value’ as physical gold.
In effect this turns physically backed gold into a currency which can then be used for day to day transactions. Glint utilises the Mastercard global payment system with a single smartphone app and offers multicurrency capabilities.
To date, the London based fintech says it has gathered 9,157 full users and over 15,000 registered users (31,410 downloads). The average client gold balance amounts to 45g and is worth £1,382 at current spot prices.
Key investors include NEC Capital Solutions, through its venture fund co-operated with Venture Labo Investment, and the Tokyo Commodity Exchange (“TOCOM”). NEC Capital Solutions is the affiliated company of NEC Corporation, a leader in the integration of IT and network technologies. TOCOM is Japan’s largest, and one of Asia’s most prominent, commodity exchanges. It’s believed that the management are currently the largest (majority) shareholders alongside institutional investors and over 70 existing professional investors.
Unlike many more UK and Europe focused fintech business, Glint believes its greatest growth potential is in Asia and Latin America – it’s hoping to target new clients in countries as diverse as India (traditionally very focused on physical gold), Singapore, Hong Kong and a string of MENA businesses.
Glint has also announced that it will be launching its account and app based capability in the US in Q3 and has already signed a number of distribution deals including one with Bud, a plug and play financial services platform, distributed by banks, which connects multiple financial products together in one place.
Glint’s business model is based on a number of charges for operating the card and transferring into physical gold – it makes a small 0.50 per cent charge for buying and selling gold as well as a 0.125 per cent charge for storing liquid gold on an annual basis.
The business plans to deploy a large part of the proposed new funds on a ramp up in marketing. Glint is predicting a big boost in clients over the next year or so, targeting well over half a million new customers by the end of 2019. The business is also understood to be aiming to become cash positive after 2 years – the current burn rate is thought to give the company a runway of least 19 months.
According to Ben Davies the fundraising will be crucial for moving the business into this global market place. “We have built a resilient highly scalable micro-services architecture which is proprietary to us and unlike many Fintech payment companies we are not just piggy backing other platforms – what we call plug and play. We had to build our system as such because gold isn’t a currency on any processor platform. So, we hold the record of accounts and do all the external authorisation for gold and multi-currency settlement. Having built the tech we now need proceeds to take advantage of our significant distribution deals and partnerships globally – first in N. America and Japan – these deals really fastrack our growth and revenue.”
Glint also announced this week that customers can now hold Euros and US dollars, along with gold and sterling in multi-currency wallets, all through a single Glint account, which can be spent through the global Mastercard network using the Glint card. To mark the launch of additional currencies, Glint is to offer the first 50,000 people to load £1,000 or Euros 1,000 into the gold account (fee is 0.5 per cent) fee free gold/FX buy and spend until the end of 2019.