There are times, very often, when we lend moolah for a movie or a snack to a friend only to never get it back. The “You owe me” situation is awkward whichever side you are. The US$7 for an ice cream may seem too paltry to ask for but can add to a huge sum if you are always letting it slip.
Whether at school, college or office, on occasions such as birthdays, anniversaries, farewells, weddings to activities like attending movies, events and so on, people like doing things in a group to make experiences more memorable. In most of these cases, money is an inherent part to avail services.
Such situations call for what is called as ‘Money Pooling Paradox’, where a money pool is made and a person in the group takes the lead in collecting money from everyone.
“The paradox stems from the fact that people need money for activities to be carried out, where on one hand we have the goal of forging social ties, but on the other hand, chasing folks for their share makes one uncomfortable and leads to social awkwardness, which in turn stops us from going ahead with that group activity,” explained Ankit Singh and Rohit Taneja, Co-founders and Directors of Commerce Labs.
Singh and Taneja met for the first time at Harvard University at an HPAIR conference in 2012. They met again at Technion in Israel for an entrepreneurial project but little did they know that their complementary skills would lead to MyPoolin, a smart way to collect money in a group.
As per Mypoolin’s survey, people owe on an average US$575 (INR 35,500) to various people during a standard period of four years and then spend on an average 20 minutes a day chasing people around, maintaining excel spreadsheets and fumbling around for bank transfers to each other. MyPoolin wants to change this.
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Launched in November 2014, the B2C business primarily helps in fast and convenient aggregation (and settling) of money among friends, colleagues or members of a society. The startup was a part of the ‘Top 50 Startups in Asia’ at Echelon Summit 2014 in Singapore.
How does it work?
A user can invite friends to chip in money for a target amount via Facebook or e-mail. All invitees are directed to the site and one can see who all have been invited for the event, how much has each invitee contributed and how much money has been collected. In case of group-gifting, order is placed only when the entire amount is collected or when the group wants to cash out. Once the amount is collected, the organiser can get the money transferred to the bank account or redeem online. Also, the amount is refunded in full in case the group event is cancelled.
MyPoolin is present across multiple websites of different verticals such as e-retail, crowdfunding and travel in the form of a co-branded plugin. Users click on the Group Gift or Group Cost Split buttons on home page, product page or checkout page.
“It has unique features like built-in proprietary event and gift recommendation. Further, our back-end capability with integration and support of multiple payment gateways, wallets and escrow lead to great flexibility and scope for designing apt solutions customised for a merchant’s use case. While an order takes place on an e-retail side only when everybody chips in, but on crowd funding websites, donations are accelerated and refunds are enabled seamlessly and easily in case target is missed,” Taneja added.
It has payment partners such as PayTM, Mobikwik, PayU, Eko and Qwikcilver and some of its merchant clients include YepME, Gitanjali, BabyOye, Jabong, Cox & Kings, Peppercloset, ExoticIndia, Catapooolt, Milaap, Archies, IndianGiftsPortal and more.
The startup earns a commission per transaction, which varies across merchants and product categories.
MyPoolin is bootstrapped but is looking to close a funding round soon.
Who else is doing it?
In the West, Tilt and PayItSquare operate in a similar space, where they enable groups and communities to collect, fundraise, or pool money securely and effectively online.
“We find ourselves in a group payment space where we are competing against a combination of spreadsheet and net banking/cash. Our product is going to be unique because of the unique Indian market conditions initially and then evolve further,” Singh explained.
The company has started spreading awareness about the product by planting ambassadors in colleges to test the demographic of college students. “We have focussed on content marketing till now to create awareness and build decent traction,” Singh added.
Hiring is the biggest challenge faced till now. “The other challenge was that we underestimated our average sales cycle and miscalculated our time to market. It took us some time to understand the underlying reasons for the problem and overcome it,” Singh said.
MyPoolin will soon be launching a mobile app blending the process of payments within. It also plans to expand to Southeast Asia later this year, starting with Singapore.
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