Mitto is a Barcelona-based debit card/finance app and it is mainly a sustainability-focused product that has raised €2M from Athos Capital and others. Mitto has a live crowdfunding campaign on Crowdcube in which the company has already raised £500,000.
The Mitto app is connected to a payment card that integrates seamlessly with the customer’s existing bank account and helps the user in a number of ways:
● Users can immediately see the CO2 impact of their purchase as well as how
sustainable the company/brand is.
● Users are shown sustainable alternatives from partner brands that fit with Mitto’s mission
● Users can then get instant cashback and other discounts when they purchase
from Mitto’s partner brands
Marcos Cuevas, the co-founder and CEO of Mitto has provided Everly.eu with an exclusive interview where he addresses why is Mitto fit to expand beyond Spain and how has his previous experience helped to shape what Mitto is now.
Marcos started his entrepreneurial career by co-founding Acquamedia technologies that competed with Shazam. Although the company was successful Marcos decided to move on and co-founded Layers.com that allowed people to put sticky notes on any website. “We got 1M downloads, were backed by Google but it was impossible to monetize it from the legal perspective because we were on top of the content of other people.”
After living in Miami for a while, Marcos moved back to Barcelona and one of the most important things that stand behind Mitto happened. He watched the documentary on Netflix called “The True Cost”, a film that shows some uncomfortable truths about the fashion industry and the impact the industry is having on our environment.
And so he asked himself how can he contribute to solving some of these issues and came up with the idea of Mitto. “Mitto helps its users to save money while saving the planet.” After Marco was working in Fintech on an account for teens for a while, Mitto officially launched in August 2019.
Why did you decide to move on from a card dedicated to teenagers to the sustainability card dedicated to everyone?
The idea is that you are never too young to adopt sustainable consumer behavior. Because of that, we had to start all over again since you have to change the onboarding process but once we managed to do that, everything was set.
Some of the key digital banks like Revolut, Monzo bank, and Starling have been all seeing huge losses just recently. This brings up the question of how profitable their business model is. What is your take on that?
I am a customer of a neobank and these banks promised a new experience and delivered it to some extent. Everything became easier, banks became more open to what the customer wants and what he seeks. But when all the excitement about the new features wears off, you realize that you only have just another card. So first there was a huge cost for those banks to onboard millions of users but now there is no clear way on how to make the money back.
In early 2020 we had 1,000 users that activated and topped up their account per day. The cost of one user for us was about 5€. At that point we told ourselves “Okay, we know how to do this, let’s focus on the monetization from now on.”
And what did you come up with?
We came up with the idea of a marketplace that consists of sustainable brands. In the past months, we realized we are not just another Fintech and that we want to help both the merchants and the customers. Although Mitto started like a card, now we have a more vertical product that goes beyond just a Fintech product. Our goal in general is to increase the sustainable market GDP.
If I understand this correctly, you are not depending as much on how many customers are using your card but more on how much are your customers spending with your partners?
On one hand, we are promoting any sustainable brand and at the same time, we let those brands to become our partners. This way we are able to create a reward system for our users. If you pay with Mitto you get these three features: 1) Cashback, 2) The information of how the company is sustainable and 3) The CO2 impact of the product/company.
Whenever you buy something you are choosing what you are buying. And as much as we have the power to vote in elections, in terms of sustainability, we have way more power to have a positive impact by choosing carefully what we buy. And when you have the information on how sustainable the product is, then you can force big companies to enhance their products to become more sustainable. This is basically the original idea behind Mitto.
But how do you get the data from companies about their CO2 impact?
We do use the MCC data but we also use the more detailed merchant code. If you buy a product from an unsustainable food retail store and then you buy one from a sustainable one, the MCC code is the same one. So we do estimations on Spanish databases that we have access to and derive the CO2 impact from that (Mitto is only live in Spain so far). Although this is not a perfectly accurate method, it provides good enough data for the customer to make their decisions based on where to buy sustainably.
You already have about 200,000 clients. How are you going to proceed with the customer acquisition?
We even had to stop the acquisition process that was based on the “member get member” process. Now we are moving to “merchant-based” one where the cost of acquisition of a customer will be close to zero – when previously it was about € 5 per member.
We want to become something like a federated loyalty card of all the sustainable brands. This way, we will have all the data together and we will have no need to spend money on marketing – but also the merchants will have no need to spend on marketing as we will provide them with the marketplace, customers, and data they are looking for.
Mitto has recently also launched a crowdfunding campaign on Crowdcube that has already been very successful? What are your plans with this funding?
As I mentioned, definitely no money will go on marketing (laughs). We want to invest more in the product itself. We will also dedicate some of the money to customer success. Basically, the money will be invested in production and enhancing our product. We also want to demonstrate that we know how to open new markets so we don‘t want to just stay in Spain but expand to the Eurozone and the UK, that will be the next place where we are going to launch Mitto.
What is the main difference between having an angel investor and having funding from a crowdfunding campaign?
It‘s quite different from the process perspective because with investors you have meetings, you get to learn who are you talking with. Now we are looking for impact investors. So far we have big investors that are Fintech related. But we decided to blend them with people coming from impact investment environment.
And the biggest difference to a crowdfunding campaign is that it is a marketing campaign in the first place. The number of deals we have closed or initiated thanks to our crowdfunding campaign is even more important to the amount of money that we have raised. The crowdfunding campaign really helped to raise awareness of Mitto and helped us from a B2B perspective.
To see how Mitto is doing with the crowdfunding campaign, click on the picture below. 👇
But as a small investor, do I have any influence on the decisions within the company or any power at all?
As a small investor, you actually have amazing power. You have the right to ask us important questions, to be curious about how is the business model working and you can do this in front of the rest of the investors. You get to challenge the company.