Traditionally, university students have been stuck using platforms like Facebook, ebay, Craiglist, or letgo to sell items that range from textbooks to mini-fridges. However, these platforms aren’t exclusively for students. Paperclip offers a safe, student marketplace that enables thousands of students to buy, sell, and swap items on campus. Paperclip is already partnered with 40 UK universities with growth plans to expand to every UK university, which will be in part facilitated by its most recent funding. The company also provides its users with exclusive deals and discounts for services offered by organisations like Barclays, Tastecard, National Express, and Giffgaff.
London TechWatch sat down with Paperclip Chief Marketing Officer Laurence Denison to learn more about Paperclip’s seed round, future plans, and recent growth.
Who were your investors and how much did you raise?
We raised £750K Seed investment throughout 2019, which completed in January 2020. Notable investors included: David Buttress (JustEat) and Hayley Parsons (GoCompare), Green Shores Capital (Mayfair-based VC fund), and Seedrs crowdfund (we overfunded 125% from 400+ investors).
Tell us about the product or service Paperclip offers.
We are the UK’s leading provider of student marketplaces, enabling thousands of students to buy, sell and swap on campus at over 40 UK universities, including Oxford and Cambridge.
We currently have a 30% market share and are looking to take that to 70% (100 UK universities) this year.
What inspired the start of Paperclip?
Our cofounders (Rich and Alan) both had successful ventures together whilst at university; they’re solving the problem that they had 10 years ago!
Currently, a lot of students want to buy and sell together in a safe, trusted environment; however, traditional marketplaces don’t facilitate this. Therefore, Paperclip provides a private classified marketplace, just for students, which alleviates the risk and other issues of open marketplaces.
How is Paperclip different?
As opposed to other marketplaces like Gumtree and Facebook marketplace, Paperclip is just for students, has much higher trust levels (rating and user feedback system), and soon will also allow secure online payments.
What market are you targeting and how big is it?
Ultimately, once Paperclip has established itself to the 130 UK universities, it will turn its attention to the US market (2,600+ universities). However, the long-term vision involves disrupting the open marketplace model, which is worth $300B in the US alone.
Who do you consider to be your main competitors?
Shpock, Gumtree, Facebook marketplace, eBay.
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What’s your business model?
Providing discounts and promoting brands such as Tastecard, Barclays, National Express, and Giffgaff is how we make most of our money currently. In the future, there will be transaction fees and other associated fees (such as commercial seller accounts).
What was the funding process like?
We were lucky enough to receive investment from some top UK angel investors, such as David Buttress (former CEO of Just Eat). This meant that the funding process was a lot smoother than it could have been!
What are the biggest challenges that you faced while raising capital?
Resource-wise, raising investment is draining. It is a full-time job, and I would say the biggest challenge is keeping your eyes on the current tasks at hand (product development, growth, etc) whilst maintaining that 2-3 year strategic outlook and successfully raising funds for the future.
What factors about your business led your investors to write the check?
They liked the potential to disrupt a massive industry, and they trusted in the founding team to steer the ship to the destination and weather any storms along the way.
What are the milestones you plan to achieve in the next six months?
We have some huge commercial deals in the pipeline, but personally, the biggest milestones for me is onboarding our 50th UK university and rolling out online payments.
We have some huge commercial deals in the pipeline, but personally, the biggest milestones for me is onboarding our 50th UK university an rolling out online payments.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Hang in there, if you believe you can achieve. They say if you ask 100 people for investment and get nothing, then it’s time to rethink your proposition.
Furthermore, try to monetize as early on as possible…
Where do you see the company going now over the near term?
This year we’ll continue our march to a 70% UK market share, familiarizing a generation of students with the Paperclip brand name. From there, we’ll add depth to our offering and continue to refine the product to be as good as it possibly can be for students.
What is your favorite restaurant in London?
I just can’t get enough of Franco Manca!
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