Law graduate Oliver Purdue has secured backing from high-profile investors for his banking service Loot just two years after finishing his studies.
The company, which also employs UWE Bristol undergraduate Chris Denny, is aimed at helping students balance their books through a smart money management app.
Loot has the features of a traditional bank account, such as ATM cash withdrawals and transfers, along with a specially-designed app targeted at helping people stick to their budget.
Oliver, 22, set up the company shortly before graduating from UWE Bristol in 2014 having grown frustrated in his attempts to budget effectively using the app offered by his High Street bank.
He spotted a gap in the market after noting that while established banks were offering generous interest-free overdrafts and gifts to entice students, they were failing to help them manage their finances to make sure loans stretched across the entire academic year.
Users of the app will soon be able to benchmark their outlay against other students to check if they are overspending, and access tailored offers designed to help them save money.
On the inspiration behind the company, Oliver said: “I found that my banking app just showed my current balance, which didn’t really mean much to me. When students have their loans come in, their bank balance makes it looks like they have loads of money. But it doesn’t tell them how much that actually amounts to per week, until they get their next loan in.”
Loot launched at seven universities in September and plans to expand this year. The company has attracted £1.5 million in investment from Austrian early stage fund Speedinvest and Global Founders Capital.
Chris, also 22, a third year philosophy student set to graduate this summer, met Oliver at UWE Bristol and also worked alongside him at an Apple Store in Bristol.
Of the company, he said: “It’s a banking service for students and young people – one of its main features is that it helps students manage their money better. It doesn’t just tell you how much money you’ve got, as other banking apps do. You can set a savings goal which can help you budget, giving you a day-to-day spending limit. There is also categorisation, so you can see where you have spent your money, whether it’s food, going out, entertainment or clothes. We believe this makes it more meaningful.
“You will be able to compare your spending with other students. With food, for example, you might not know what constitutes a reasonable amount to spend on food in a week. If you are spending too much, relative to other students, we can provide customers with offers to help them save money.”
Loot is aiming to become the leading student banking provider, tapping into a potential market of more than two million people in the UK. Students are reportedly the least satisfied bank customers and use more paid-for money management apps than other consumers.
The 14-strong team behind Loot is hoping to make a major breakthrough in the burgeoning fin tech sector, with plans to invest its new funding in marketing and recruitment.
Chris said Loot would eventually generate profit through international transfers, but by charging a smaller fee than the established banks, and through its targeted promotions for customers.
He said: “Our first few months have been really great. Now we are moving on to the next stage, which is development, perfecting the iOS app and looking at launching an Android version so more people can use it. The investment will allow us to grow our team.”
The Prepaid Card which comes with a Loot account is an electronic money product. Although regulated by the Financial Conduct Authority, it is not covered by the Financial Services Compensation Scheme.