Living in London may be pricey, but then there’s getting around. To decrease the price and the hassle of Londoners’ commutes, CommuterClub is partnering with leading peer-to-peer funder RateSetter to offer major discounts on annual public transport tickets through low-cost payment plans. The campaign, hosted on UK crowdfunding platform Seedrs, is one of the biggest moving campaigns of the week, according to Seedrs’ startup roundup.
As of this writing, CommuterClub is 92.6 percent funded by 219 investors, with a £2,500,000 pre-money valuation. It’s currently raised £509,425 of £550,000 in investment, and is offering an 18.03 percent equity. The company offers the two million London commuters losing out on over £400 million of savings every year by not purchasing annual public transport tickets (instead of monthly or weekly passes) a chance to recoup their money. According to CommuterClub, the company delivers average savings to the customer of £200 annually.
Here’s how it works: CommuterClub and RateSetter fund the cost of the Annual Travelcard upfront. Commuters then make 11 payments at the same cost as a Monthly Travelcard (including CommuterClub’s 5.6 percent interest rate) for a full year of travel, saving the equivalent of a month of free travel. To minimize credit risk, CommuterClub secured direct integration into the Oyster smartcard infrastructure, allowing it to radically reduce credit risk and thus charge an all-in fee of 5.6 percent. As an added bonus, commuters were able to keep current fares when Transport for London raised prices in January 2015.
An “Innovation to Watch,” as the Financial Times described CommuterClub, the company was selected for the FinTech50 2015. The company’s team includes Petko Plachkov, Managing Director and Founder; Imran Gulamhuseinwala, Chairman and Founder; Alain Orset, CTO; Steve Partos, Operations Manager; Will Becker, Advisor; and Sev Furneaux, Front End Design and Development.
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