“Managing recurring expenses still sucks!” according to David Rovira, who co-founded the personalized expense management app Polaroo to “take the pain out of paying bills.”
Unlike the expense tracking apps currently in the market using generic data and estimates, Polaroo assesses each user's spending history and profile to propose the best offers available – in “just minutes,” Rovira said.
The app, which can be used by individuals, households and businesses, goes even further. It takes care of the monthly payments to the respective service providers; users simply get an annual rate, payable in fixed monthly charges, that aggregates the payments – making it easier for them to plan their finances. Any month-to-month fluctuations or changes in the various bills due to changes in consumption or the switching of providers are already factored in during the calculation of the annual rate.
“In a nutshell, the idea is to save time and money and also optimize a neglected area of service,” Rovira, the company's COO, told CompassList at the 2019 Madrid South Summit.
“We do not partner with providers that use hidden charges. We also believe in sustainability and the need to control carbon footprints, so we only use renewable energy companies,” he said. Currently these partners include Holaluz, Aigues de Barcelona, Gana Energia, Canal de Isabel II, HomeServe and Sorea.
“Some customers have saved almost €2,000,” he added. In the case of a restaurant, “we've saved them €7,000 per year.”
Named Best Spanish Fintech Startup by Mastercard last year, Barcelona-based Polaroo plans to raise €1m this year to fund its expansion across Spain. The startup has secured €1m in seed funding and grants so far, including from Silicon Valley VC Plug & Play and angel investor and serial entrepreneur Didac Lee.
Engineers and a lawyer
The idea popped up when the trio were studying and working in various countries including Germany, the UK, Austria and the US. In each country, they encountered the same frustrating issues of managing household bills.
“Wherever you are, you have the same recurring expenses: water bill, gas, phone bill, insurance… you don't know what the costs will be, which companies offer various services or which are the best. The process is always time-consuming,” Rovira said.
Besides fluctuations in the monthly bills that make financial planning difficult, customers also often incur punitive bank charges for having insufficient funds to pay for bills that had unexpectedly exceeded their agreed limits. In addition, customers don’t know how much money they can save by switching to different deals or providers.
All these factors were taken into account when the bill management software was developed in 2017. The siblings, David and Marc Rovira, and their friend Sergio Sanchez took eight months to build the app in the Roviras' family garage. CTO Sanchez is a mechanical and IT engineer, while CEO Marc Rovira has master's degrees in Aerospace Engineering and Innovation and Entrepreneurship. COO David Rovira is an international business lawyer.
We've saved a restaurant €7,000 per year
After pre-incubation at the CRS division of energy giant Repsol, the startup launched as Widuid with electricity, gas and water expenses in 2017. In early 2018, it rebranded itself as Polaroo. New services were also added like repairs, maintenance, solar panel and electric vehicle costs. Other common expenses to be added include telephone, internet, insurance, gym and on-demand services. Polaroo gained over 3,000 registered users in the last six months of 2019. About 1,000 have submitted all their bills to the platform – a 30% conversion rate.
The company, with a team of 10 full-time and 10 contract staff, has started using AI to improve its automation features and algorithms. It is currently “focusing 100% on the Spanish market because first of all, you need to become a country leader in order to jump to other markets,” David Rovira said.
B2B-B2C model
After registration, a user simply gives Polaroo all the information and bills for the contracts they have with different providers. “We'll do the rest,” Rovira said.
The algorithms will start by looking for better tariffs and providers. When an optimized combination of contracts is worked out, the user gets shown how much money he can save by switching providers. Once the user authorizes Polaroo to manage his accounts, any switch between providers is automatically processed by the app, as long as the service providers is a Polaroo partner.
The company targets both B2B and B2C sectors, offering annual SaaS contracts. Consumers currently pay a symbolic fee of only €2. The service providers pay commissions to Polaroo for managing their customers’ accounts. Additional revenue is earned for extra products and services, such as maintenance plans and accessories, sold to the end-users.
The “easy to budget for” flat annual rate guarantee passes the risk of higher variable charges to Polaroo. The company will cover the shortfall during peak consumption, such as extra usage in the winter months. This is then compensated through lower energy consumption in the summer, with the same flat rates paid by the users.
The startup raised its first seed round of €500,000 in February 2019 from investors from seven countries including Silicon Valley VC Plug & Play, the co-founders of Spanish flatshare platform Badi and Lee, a prominent Spanish angel investor and founder of 15 startups. The funds were mainly used for tech and customer service improvements. More funds are needed to expand operations and to develop more automation programs.
“We are looking at European funds. We want to play in the Champion's League and take Polaroo to other countries, growing internationally in a structured way. We already have international partners identified,” Rovira said.
