5M gave ERNIT the edge in 2017
Q&A: A funding round made all the difference for ERNIT in 2017. CEO Søren Nielsen tells us about ERNIT’s development the past year.
By Anders Holmgaard, Communications Manager, #CPHFTW
2017 marked a shift for #CPHFTW member ERNIT. A DKK 5M investment from Spar Nord and Seed Capital in the beginning of the year “is the reason why we’re here today,” says CEO Søren Nielsen as we called him up between Skype calls on a busy friday morning.
Since 2015 he and two co-founders have been working on creating the world’s first smart piggy bank — teaching children how to save up their money in a world where physical coins are in decline.
Søren shared with us how the investment has impacted ERNIT the past 12 months.
Describe ERNIT’s development through the years.
When I look at our development through the years I think about our time in New York City in 2016. As a young startup, we got accepted at the Techstars accelerator. Excited about the program, we had brought our families to New York City. We stuffed 10 people into a 90 square meter apartment.
Every morning we went down Manhattan by bike. But in 2017 I feel like ERNIT has shifted gears. We’re still biking, but it’s going faster and faster. And hopefully in 2018, we’re able to motorize our vehicle.
How did you run your business before you got the 5M investment?
We spent as little money as possible. We had rented a cheap office space at one of our friends’ and didn’t receive any salary. Every penny literally went down the piggy bank. But nevertheless, we managed to produce an app and a prototype of our product.
In the end of 2016 we started negotiating with Seed Capital and Spar Nord. The work with the lawyers took ages but in January 2017 we sealed the deal.
It was a big relief to sign the papers. It took me quite long to find the right pen to do it with. But finally we popped the champagne.
How did the investment change ERNIT in 2017?
The investment enabled us to integrate our back-end into that of Spar Nord. This makes it possible for our users to fix an account to their ERNIT. This was crucial for the development of our product. Kids need to know that there is real money involved when they save their pocket money.
Along the way, however, we had to come to terms with the fact that it was impossible to reach the deadline in time. We are still counting on launching the partnership before Christmas though.
In 2017 we were also finally able to pay ourselves a salary. A small salary — but still a salary. Now, we’re six people in Denmark and five in Ukraine. We changed offices to SingularityU in Copenhagen and for the first time we have a feeling of being a real company — not just some guys in a garage.
But an investment also means more work for me as the CEO. I have to make reports on our KPI’s every month and make sure the numbers are right. We have become more professionalized and structured due to the money flow, but the pressure has also increased.
Once a month I have to prepare and hold a board meeting. It feels like an exam every time. It can be frustrating with all the requirements from the board and it has changed my daily life, but then again I learn so much.
I have gained amazing insights as to what investors are looking for and our board members have helped me understand how the big banks think — that’s extremely valuable when I do pitches.
What were the highlights of 2017?
One of the biggest highlights of the year was pitching ERNIT at Singapore Fintech Festival in front of 2000 people and ten judges from the biggest banks in the world. I was nervous, but it went well and we have benefitted a lot from it.
2017 was also the year we produced our finished product. Before, we only had a 3D printed prototype with an Arduino board. So I shed a tear as I packed our very first factory-made piggy bank at our manufacturer in Denmark and sent it out the door.
2017 has been a wild ride. But that’s life in the startup world. If you can’t deal with that, you don’t belong here.
What are your expectations for 2018?
In 2018 we are on the hunt for more funding. We need to scale outside of Denmark. We’re already in talks with big banks like Barclays and Standard Chartered and I’ve just sent piggy banks to Greece and Malaysia.
After three years we have finally figured out how our product has to work but it’s safe to say that 2018 will see even more changes to ERNIT. Simply because the happiness of our users is what needs to drive us — not the money at hand.
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