Yboo (an acronym for ‘you’re better off on…’) recently announced its first external investment – a £150,000 loan from Angelfish – and has set in place a plan to scale up its operations.
The company previously held a funding campaign in which it was looking to raise £250,000 in seed capital (for equity).
Gearing up for growth
Telecoms veteran Gould was one of the first hires at O2’s predecessor Cellnet. He believes that Yboo’s “massively complex” underlying technology, which took six months to develop, makes it hugely attractive to would-be investors.
As we previously reported, Yboo captures multiple data points – from minutes used and texts sent, to local, international and premium rate numbers dialled, to mobile data and Wi-Fi usage – to build a picture of a user’s usage over time. The app then offers up operators’ tariffs that closely match that usage. This can save consumers money while helping operators to better understand their needs, according to Gould.
We spoke to Gould to find out more.
What does the investment you have secured mean for Yboo?
Martyn Gould: We’re excited about this investment – it’s about more than the money. We’ve chosen investors with a track record of rolling up their sleeves and actively helping businesses to grow and deliver on their objectives.
Our investors are also based in the North, which helps with the logistics of board meetings and so on. In terms of the usual ‘deal metrics’, we’ve taken an equity investment allowing us to develop our product and business, ready for a Series-A raise later this year.
Which part of the deal stands out for you?
Our options pool allows all Yboo full-time equivalent (or FTE) colleagues to share in the future success of everything we do. Protecting that options pool was vital to me, and our investors shared that view right from the start.
What will you do with the investment?
I’ve triggered Yboo’s scale-up plan. In simple terms, we’re going to improve our Android version while looking to launch Yboo for iOS – that’s currently in TestFlight. We also want to attract the best people to our team, gain market share and gain revenue. After that, we’ll be looking onwards to our Series A and international expansion.
What problem is Yboo looking to solve?
The way that people buy mobile in the UK is fundamentally broken – the average consumer overpays by £176, according to Ofcom. If you walk into a mobile retailer, you’ll get asked a series of questions, and although it’s very unlikely you’ll know the answers you’ll be recommended a product based on them. It’s the equivalent of walking into a car dealership and saying you want a new car and the salesman choosing which one you should buy.
We’ve found that it can take a consumer five hours to manually find the right mobile deal for them online by looking at comparison sites. Nobody has time for that, so we said we’d fix it and have our app compare your whole usage across the UK market.
How does Yboo work?
Once installed the app begins to measure information about the user’s unique behaviour. We then wait 24 hours to check that the phone isn’t behaving abnormally before giving recommendations. We recommend that people install it for two weeks, but you can take recommendations almost straight away.
Why might Yboo be appealing to would-be investors?
The magic is in how it all works together. The app is the pretty face that the consumer sees. It contacts the backend system that lives in the cloud and builds a meta-model (or a single view) of a person’s usage – including their profile; physical location; device; signal strength; voice text and data; and whether you ring national or international – all of those complex things. Once built, that’s compared to a product catalogue that returns the right results from every single mobile operator. It’s massively complex.
And it’s really important that those things work together properly due to different operators’ rules. For example, if you’re on one network and ring Turkey, it’s not classed as a call to the EU. But if you’re on another and you ring Turkey, it is. If you’re on one network and ring Palestine it’s charged as a call to Israel because of the political issues there, whereas other operators don’t. Our system analyses what that transaction would cost on every single network and in every single detail. We compare 30 times more deals than anyone else – it’s phenomenal power.
Once I explain to investors that one operator would include a certain call in a user’s tariff but another wouldn’t, and that the rules change both domestically and internationally, they see that Yboo is really good. Investors will see that we’ve built this with no help or money and wonder what we could build with cash behind us. And they’d be absolutely right to do so.
How will you monetise Yboo?
We could get a connection bonus if we recommend a plan. We could also get paid for helping operators understand consumer behaviour and optimise their plans. We have a trial going on there, with both sides trying to assess the value of that usage data.
It could work out at anything from 10p to a pound per anonymised consumer record. That data could be worth the same to different operators, so you could theoretically sell it multiple times.
How might Yboo evolve over time?
We will constantly poll signal strength and compare what you get in places where you hang out against other networks in the UK. The thing that’s a bit mind-blowing that most people don’t understand is that you could have five bars on 4G on the train to Huddersfield, but you’re sharing bandwidth with everybody else on that train who’s also on your network, so those bars are misleading.
We’ll always focus on price because that’s what everybody cares about, but over time we’ll keep adding components of extra value and let consumers decide if it’s a good or bad thing. I think it’ll be an awakening for many.
In regards to churn rate, how will you keep users once they’ve found their most suitable mobile tariff?
We’ll address that with a clear plan of moving into gas, electric and other utilities, such as fixed-line broadband. The app will be able to log into those accounts to get consumption data.
Why haven’t uSwitch and similar companies done what you’re trying to do?
It’s a great question and one that investors often ask. Yboo took Paul and I nearly six months to design. There was a time cost, an opportunity cost and a monetary cost. If somebody was to buy us they would need to have deep pockets and be really patient. To make it themselves they would need a massive team of people as it’s really complicated.
Yboo is out now on Android with iOS coming soon.