Yomo empowers millennials to smash through the debt barrier

19 Feb 2018

Yomo CEO and co-founder Gavin Shields. Image: Yomo

Our Start-up of the Week is Yomo, which wants to help millennials achieve financial stability.

“We’re currently living through the perfect storm,” explained Yomo CEO and co-founder Gavin Shields.

“Flat wages, rampant debt-driven consumerism and out-of-reach house prices make financial freedom a distant dream for most of us.”

‘We want people to overcome and combat this debt trap we’ve been forced to fall into. This is not a way of living’

Yomo is a savings and investments app designed as a solution to combat this relentless cycle of spiralling debt.

“Our aim is to empower a new generation to take control of their finances, and create security and wealth for their future.”

The market

Through research, Yomo has identified a clear need for the millennial generation (in particular, 20-35-year-olds) to grasp this opportunity and gain control over their financial circumstances.

“However, while this is our target market, Yomo appeals to anyone who decides to take a step in securing their financial life.

“Yomo has been created to produce positive results for those who use it, and it also rewards them by using it.

“Not only does Yomo help individuals build and establish a solid savings habit, it also enables them to learn about money in a simple and engaging way. In addition to this, it teaches and creates a path to investing in stable investment funds, contributing towards the achievement of overall financial goals.”

The founder

Shields’ background is in economics, finance and technology development.

“After graduating from the University of Edinburgh in economics, I moved to London, where I was finance manager at P&G for one of the largest customer teams in the UK.

“I then joined Summit Partners, one of the largest venture capital firms in the world. Here I was an investor, focusing on technology across Europe.”

Shields set up his first start-up in 2009, a games company in London.

“This grew to 25 people in the UK, US and Japan. I have also had the opportunity to be involved in other start-ups since, which include PiggyPot and, of course, Yomo, which we have been building since mid-2017.”

The technology

“Our approach is pretty straightforward: we take something that is highly complex and often confusing, and we make it simple and fun,” Shields explained.

“We do this so that more people are able to take control of their finances, and aren’t put off by the usual boring and confusing language.

“We do tons of work in the background to make this happen. For example, our investment funds are complex and made up of thousands of different financial products – typically a user’s funds will sit across thousands of companies, bonds and even saving products – but users simply choose from four different risk levels and we take care of the rest.

“This means that whether a user deposits £10 or £1,000 into their Yomo account, those funds are divided up amongst those thousands of products.

“Why does this matter? Well, if you are stock picking –like investing it all in, say, Tesla – if that stock goes down or even crashes, you might lose all of your money.

“But if your funds are diversified across thousands of stocks, while your funds can still go down, they won’t be affected by a couple of companies going bankrupt.”

Shields said that the ultimate goal of Yomo is to end the debt-driven society that we live in today.

“We want people to overcome and combat this debt trap we’ve been forced to fall into.

“This is not a way of living.

“We want to help alleviate those feelings of worry, stress and anxiety that are associated with debt.

“By using Yomo, this will encourage people to save and invest wisely, while also leading them on a path to feeling financially stable and free.”

The crusade gains momentum

Yomo was launched in November 2017. Despite its fresh entry into the market, it’s already grown to almost 5,000 users and features in the top 150 apps in the UK App Store.

“Based on the app’s performance so far, we expect to have at least 15,000 users by June 2018.

“The rate of growth that Yomo is already experiencing only stresses the need and want for financial stability in the current market.”

Shields said that the company is currently in the process of raising £1m in funding.

The key to effectiveness is data.

“We use a lot of data to assess the efficiency of our business model and plans. This continuous assessment, adjustment and adaption can be a challenge.

“Looking at your business model from all angles and calculating ways to overcome issues isn’t always easy. It requires brutal honesty from yourself, your surrounding team and investors. But, in the end, if something isn’t working and this is clearly highlighted, you need to change and adapt to the needs and requirements of your audience.

“With data, you can’t run away from it – but isn’t this a great thing? As a team, we feel it’s vital to conduct consistent model reviews to ensure we’re always on the correct path, and our data research allows us to do this.

“No matter the challenges we’ve overcome in our journey so far, we always handle them as effectively as we can, whilst ensuring we maintain a high level of motivation within the team. Motivation is key to achieving ongoing results and there is always light at the end of the tunnel.”

He cited Amazon CEO Jeff Bezos: “Part of company culture is path-dependent – it’s the lessons you learn along the way.”

An encouraging culture is needed in Ireland

As a start-up entrepreneur, Shields said that there is a vast amount of help available across Ireland, which makes a considerable difference and impact on the start-up scene.

“Between Invest NI, Enterprise Ireland, InterTrade Ireland, advisers and entrepreneurs, there are countless people willing to get on board to help others succeed. This encouraging culture is incredible.

“However, sometimes there can be a lack of ambition in the Irish start-up scene, especially from investors. What I mean by this is that when you speak to investors in London, Berlin or San Francisco, they encourage you to shoot for the stars. In Ireland, my experience is that we tend to think on a much smaller scale.”

His advice to fellow or would-be founders is to research, research again and research some more.

“Before you proceed, spend as much time as possible identifying and understanding the problem you’re trying to solve.

“Without fail, we speak to our users on a weekly basis. It’s amazing what you can learn, even after years of working in the industry.”

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John Kennedy is a journalist who served as editor of Silicon Republic for 17 years