Sunday, February 25, 2024

Spare After Shark Tank Update [2022] – Where Are They Now?

Spare Before Shark Tank

Searching too far and too wide for an ATM is something many people have experienced at least once in their life and D’ontra Hughes was one search person. When an ATM is finally found, it never belongs to the bank of your choice and it has insane ATM charges. D’ontra had even once been charged $5 to get $20 of his money.

The average ATM fee in America is $4.69 and D’ontra Hughes wanted to change that. It is for this reason, that he developed Spare which is a virtual network of ATMs that allows you to access cash from merchants on the Spare Network.

Spare is used by downloading the software application. When you want to withdraw cash, you simply open the application on your phone and will be shown a list of vendors in your area who are willing to give you that money. The Spare Application charges a much lower rate of $3 for a withdrawal.

D’ontra Hughes worked at JP Morgan before he started his business and so had a lot of experience working in finance. His Spare application had started well but had scaling problems. One problem that he had was that too many businesses were asking for more volume for them to adopt the application.

D’ontra needed help to grow his business and so he reached out to Shark Tank for help. He was invited to be on the 20th episode of the 10th season.

Spare on Shark Tank

Spare 2 D’ontra Hughes went onto Shark Tank seeking $500,000 for 3.5% of his company Spare. This gave the business a valuation of $14,285,714. He started his pitch with a presentation that highlighted the high banking fees that people were charged when they used an ATM. He then showed the Spare app and the benefits of using it.

Being a software application, there were no samples to review. After he gave his presentation, Lori asked D’ontra what the rate for withdrawing $20 was and she was told that it was $3. D’ontra then said that Spare gets a third of the transaction cost which is split with the merchant. There are also processors in that equation who would get a third of the transaction cost.

Mark Cuban then asked if he was using a third-party network and D’ontra said that he was. Kevin then asked how much he could withdraw and D’ontra said that the maximum that an individual could withdraw is $100. Barbara then asked D’ontra how he found his merchants and how many he had in his network.

D’ontra said that they had been in business for a couple of years and had around 2,700 merchants.  He said that most of them were small-scale retail shops. D’ontra then said that the merchant number was grown over the past 2.5 years. Mark Cuban then asked him if that was his problem at the moment. D’ontra said that he was ready to explain but Daymond interrupted him.

Daymond said that the company’s valuation looked accurate given his numbers but at first glance, it had looked overvalued.  D’ontra then said that his vision was to be the ubiquitous cash-out option and he had done that. He then said that a company known as BBPOS had come as a strategic hardware partner.

Spare 3 D’ontra said that the company had 933,000 units and they would be uploading their software to their units. Kevin then asked him if he was saying that he already had registers in the stores and D’ontra said that they do. He then showed the sharks a unit that they had. Lori then asked them what BBPOS specifically did.

D’ontra said that BBPOS made point of sales hardware. He then said that they were the largest in the world. Kevin then asked if they made the devices that print the receipts and D’ontra said that they did. Barbara then asked if they were in that many stores already. D’ontra said that they were.

Mark Cuban then asked them for the locations they were in and the locations they weren’t in. D’ontra then said that one of the biggest problems that they had was scaling. It was possible for them to go to a chain like 7/11 but they would be told to go and get volume.

D’ontra said that with their location in 2,700 stores, they had proven that they can add value to their customers. Mark Cuban then asked him how many transactions he was doing in a day. D’ontra said that they were doing about 2,500 transactions in a day.

The sharks said that those were a lot of transactions. The sharks thought that it was a big number especially since he was just starting. Barbara then asked him what his background was. D’ontra said that he used to work at JP Morgans. He then had a business idea in 2010 and he decided that he would become an entrepreneur.

D’ontra said that he had gone through a very trying process even sleeping on friends’ couches and sleeping in his car just to raise money to make the business a reality. Mark Cuban then asked him how much money he had raised and D’ontra said that he had raised $500,000 to date. Mark Cuban then asked him who he had raised the money from. D’ontra said that the money was from friends and family he had also had a small convertible note round.

Spare 4 Make then asked D’ontra what the cap on the convertible note was. D’ontra said that the amount was $9,000,000. Kevin then asked him how he convinced people to buy into his $9,000,000 valuation. Mark and D’ontra said that it was because D’ontra knew how to sell.

Kevin then asked D’ontra why he thought people would walk down the block for $1.69. He knew that most ATMs charged $4.69 while D’ontra was charging $3. D’ontra said that people do care and he then explained that the underbanked are the people who do not have access to the same financial opportunities as others.

Mark Cuban agreed and said that he needed $200 to open a bank account and there were times in his younger years when he did not have that. Kevin O’Leary then left. He said that the company was overvalued. Lori then left because she didn’t think that she was a fit for the product. Barbara then said she couldn’t relate to that and so she was out.

Daymond then left because the thought that the business idea had major logistical challenges. Mark Cuban said that he liked the idea but 3.5% for $500,000 was not enough. He then asked D’ontra to give him a better offer. D’ontra then offered Mark 5% for $500,0000. Mark Cuban rejected the offer.

Mark then offered D’ontra $500,000 for 15%. D’ontra then asked him if he would do it for 12%. Mark Cuban said he would do it for 12% and 2% advisory shares. D’ontra agreed and they made a deal. D’ontra said that he gave up more than he wanted but having Mark Cuban on board was monumental.

Spare Now in 2024 – The After Shark Tank Update

Spare 5 The deal with Mark Cuban was never finalized and the business is not listed on his website as one of his companies. However, spare has continued to do business. Spare does not have any competitors in its space. The company continues to be available on Apple Store and Google Play. Spare has more than 1,000 downloads on Google Play. It has 4.8 out of 5 stars on the Apple Store from over 300 reviews.

Spare has partnered with the Urban League of Essex County New Jersey to help residents get their stimulus checks faster. The Spare Network would facilitate faster transactions. $20,000 in direct stimulus funds was available for this. $100-$200 will be available for each family.

The Spare Network has grown and it is now available from 32,000 locations in the country. Spare has several social media pages. Its Instagram page is its largest page and it has over 3,700 followers on Instagram and over 3,900 followers on Instagram. It also has over 2,800 followers on Instagram.

Spare is making an annual revenue of $4,000,000 and is located in California where it continues to provide innovative and affordable ways to transfer money at an affordable cost.

Victor Kamwengu
Victor Kamwengu
Victor is a movie buff, dog lover and author of a wide variety of subjects. When he's not tapping away at the keyboard, you can probably find him cozied up on the couch watching a cult classic or catching up on new releases.
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here