CoinOut, Scan and Bank
Jeffrey WittenCoinOut founder and CEO, Jeffrey Witten, appeared on ABC's Shark Tank on February 17, and came out a winner, with Shark Tank investor, Robert Herjavec. In Part 1 of this series, I interviewed Witten about his mobile app and wallet, right before his appearance in the tank. I was able to interview Witten again after the episode aired on what the future holds for both his new partner and the company.
"From his cyber-security background, he understands the basics around building a great product, but understands minimizing the information needed from customers," says CoinOut Founder, Jeffrey Witten about his new investment partner, Robert Herjavec.
CoinOut, a digital wallet app that can be downloaded onto your smartphone for free, allows anyone with a mobile number, to save loose change, and in turn, convert [their] receipts into effortless money. Think a digital piggy bank, combined with a cash back credit card, without the card or financial requirements.
The Offer
While the tank got a bit heated as between Mr. Wonderful and Mr. Cuban, the venture struck the chords of cyber-'shark', Robert Herjavec. The investor offered $250,000 (Witten's asking price) for a 15% stake in the business, contingent upon Witten obtaining a successful pilot with a large retailer. While he countered 10 percent, Herjavec declined. Ultimately, Witten accepted the offer.
Taking a look at what the other Sharks had to say:
Barbara Corcoran
While going head to head with each of the investors, Barbara made it known to Witten that she liked how he was treating each of the sharks like his equal; that he wasn't backing down. Seeing the potential of the app, she offered Witten his $250,000 asking price for a 15% stake, contingent upon Witten getting into 700 retailers by the end of the year. However, Witten declined due to the contingency, and ultimately, the investor was out.
Talking Herjavec's offer, I wanted to know what was stirring in the CEO's head.
Andrew Rossow: Why do you think Robert bit onto your product?
Jeffrey Witten: I think Robert understood the technology and business potential of it. One of the things we talked about, was the problem of change is clear, in that there is a massive business of coin reserves that are built around it.
What Does The Future Have In Store for CoinOut, Witten, and Herjavec?
One of the bigger questions consumers have had regarding the app is how the numbers are determined. Witten says that CoinOut offers two cashback programs--the Promoted Cashback program and the Retailer Promoted Cashback program.
Promoted Cashback Program
The Promoted Cashback program allows users to take a picture of their receipts from any retailer (i.e. Subway, McDonalds, Starbucks) and earn a small amount of change back. The amount of change that comes back changes daily. "Today you may be able to scan four receipts; tomorrow could be five," explained Witten. The CEO indicated that they anticipate changing methods of communicating amounts to customers in the future, but at but at least for right now, it's a micro amount with a little bit of the surprise factor there, said Witten.
Retailer Cashback Program
With the Retailer Promoted Cashback program, the merchants have the ability to decide the amounts and benefits. Those merchants who have partnered with the company have a unique QR-code printed on the receipt, which upon scanning, deposits a pre-decided amount into the user's wallet.
Transaction Charges
While the episode was originally filmed months prior to airing, the business model has changed. For example, while Witten mentioned in the Tank that originally, CoinOut would take approximately 3% from each transaction, the company no longer takes percentages from any transaction.
I was able to get a statement from Shark Tank investor and CoinOut's latest partner, Robert Herjavec on what he thought of Witten's pitch.
Andrew Rossow: Throughout Witten's pitch to the Sharks, what did you think about his proposal, demeanor, and product?
Robert Herjavec: Jeff is a great entrepreneur with strong vision! He sold hard in the tank and now he’s got to execute.
For more information on CoinOut, you can read Part 1 of this series and check out their website.
