Datam

Idea

Introduction

In 2020, more than 50% of all payments in the UK were made using cards, with cash payments falling by over a third from the previous year. In fact, there were 13m people last year alone that used cash just once a month or not at all.

As a result, small businesses in the UK must be equipped to take card payments and respond to this rising consumer demand. And yet it can still take anything from 3 days to 3 months for a business to be able to start taking card payments; a process that jumps through a wide range of hoops from the initial salesperson (ISO), the bank (acquirer) and up to 4 other different stakeholders before the process is complete. The process is inefficient, expensive and largely paper-based.

Datam was founded to streamline this process. We encompass the entire value chain within one central cloud hosted hub, enabling businesses to get up and running in just 5 minutes.

Substantial accomplishments to date

£2.5m has been spent on the Datam platform to date from founders and existing shareholders.

Raised £715k in Q1 2021 funding additional delivery & sales resource and repaying previous loans.

The business has filed unaudited accounts for the last 2 years showing profitability and a positive EBITDA.

The IP is wholly owned by the business.

In late 2018, an earlier version of the product was evaluated by Visa and Datam was awarded a contract and brand support in an initiative to make it easier for SMEs to gain access to competitively priced card acceptance. The project was successfully rolled out on time and on budget and is now the default platform for 2 UK based financial institutions.

This project surpassed expectations as the merchant sales and on-boarding process completed in just 5 minutes - half the target time set by Visa at the start of the initiative.

The 4th major version of the platform was subsequently released in June 2020.

The platform is now live with 3 other businesses, including an “order at table” App, demonstrating the platform’s agility and ability to manage the merchant journey across different payment channels, product types and end user sectors.

Results for our customers (ISOs, acquirers, finance companies etc.) so far have shown:

90% reduction in time for application processing;

35% efficiency increase for salespeople;

40% increase in efficiency for admin staff;

22% increase in conversion rates compared to sales methods dominated by manual methods.

Monetisation strategy

Datam receives a small percentage of the turnover of every business that applies for a credit card processing account via the Datam platform. The percentage is paid by the credit card industry as a small share of their margin. All these small percentages gross up into perpetually repeating revenue.

Acquirers - this is the bank that processes card payments on behalf of a business and is integrated with VISA & Mastercard. We receive a monthly commission fee on the card transactions processed by businesses onboarded using the Datam platform.

Independent Sales Organisations (ISOs) - ISOs work on behalf of acquirers to source customers for them. Datam receives subscription fees from ISOs so they can use the platform to onboard merchants plus an application processing fee;

Hardware Finance Companies - Datam receives an application processing fee each time a merchant onboarded using Datam takes out finance in order to fund the purchase of their chip and pin machine

Use of proceeds

We are raising investment to scale our operations, improve the platform and meet strong, growing demand from partners & customers.

30% Service Deployment

The business is investing in the team to speed up the roll-out of the services, to ensure the recurring revenue streams arrive more quickly.

20% Sales and Marketing

We want to create more of our own gravity, with Datam already becoming the ‘must-have’ platform for every stakeholder in the value chain. We are investing in world-class sales professionals and refining our sales messages to scale our customer base.

20% New Product Modules

We have a full roadmap of development to further differentiate the proposition and add more revenue generating capabilities to the Datam platform.

30% Working Capital

We will reserve a portion of the funds raised to provide the capital to support the larger opportunities that we are already identifying, when the deployment of additional resources will de-risk project and expedite returns.