SEASON 10 EPISODE 20
virtual atm network and mobile app
$500,000 for 3.5%
$500,000 for 12% + advisory shares
Spare, a mobile ATM App created by D’ontra Hughes, was launched in 2015. The App was founded in 2013 and gripped the ATM market by storm. It dispenses cash to customers via their phone and is used as a virtual ATM. The App transforms digital balance cash without a debit or credit card.
Motivation behind Spare
The App developer was irritated by how he had to look for an ATM, find one that is not associated with his bank, and be charged high accessibility fees. While working in a hotel bar, he often sent customers to an ATM across the street whenever they required cash. This encouraged him to develop Spare, a proximate ATM, cheaper, safe, and suitable than the old ATM. Hughes, a fin-tech entrepreneur, was inspired by global innovations to shake up the old business models. He is a risk-taker and a salesperson at heart.
D’ontra Hughes used $500,000 to launch the App, the money he raised from family and friends. Further, he partnered with tactical hardware whose Point of sale (POS) systems are now in store.
The company had accrued 2500 participant dealers countrywide and was already running 2700 transactions daily since its launch. In 2016, Spare received a radiant ranking from Portland’s Arcview Groups Investment Forum and consequently received a winners Fund Investment of $50,000. In the same year, Spare App participated in the Mobile World Congress held in Barcelona, Spain. Hughes met Richard Trenholm, who featured the App in an article. In 2017, he was named the winner of a startup Pitch at the Money 20/20 2017 in Las Vegas. In January 2019, Spare App partnered with Gopher Protocol, a software company. The partnership has earned them a wide range of access to the unbanked community.
Despite Hughes raising approximately $350,000, he had not found any dealers or made excellent sales. This drove him to approach the sharks for a clean startup chance.
Spare at Shark Tank
Hughes walked into Shark Tank, hoping to find a financier enthusiastic about giving him $500,000 in exchange for a 3.5% partnership in the business. He was looking for an investor who would assist with acquiring dealers, for the more the dealers offering the services, the more value the App gains. Mark Cuban saw the potential in the business and made Hughes the offer. They both settled on a deal of $500,000 in exchange for a 12% equity and a 2% consultative share.
Challenges after Shark Tank
In an interview with the Direct Cannabis Network, he mentioned that being the only CEO caused him sleepless nights. He tried figuring out some tough decisions for the company. His advice was that it is essential to get external advisors who have been CEOs before.
The App is up and running. Clients can now withdraw cash from local dealers and send cash from any digital wallet that includes PayPal, Apple Pay, and Coinbase. The company has made expansions in its coverage areas, and users are required to download the App and survey the areas to choose the best option.
Visit the Spare website