Spare is a mobile ATM app that was created by D’ontra Hughes. He pitched the mobile app on Shark Tank, in the hopes that investors will help him expand his visibility and his global reach.
Spare was launched in 2015, and it dispenses cash to users via their phone. Read on to learn more about Hughes and his background, as well as his hopes for expanding the mobile app moving forward.
Here’s what you need to know:
1. Spare Is an App That Converts Your Digital Balance to Cash
Spare converts a user’s digital balance to cash without the need of a debit or credit card. To use, simply download the app, and request the amount of cash you want. Your GPS will direct you to the nearest shop registered with the app, and you will then show the store merchant a onetime PIN generated by the app. If it is correct, the merchant will give you the requested amount of cash.
If they so choose, the merchant has the option to add a fee to the transaction, whether it’s a flat flee or a percentage of the transaction. Depending on the merchant, the fee could be less than an ATM charge. The specific amount varies. The merchant benefits from increased foot traffic into their shop.
“As a user, you can choose from multiple payment options within the wallet section to fund your SPARE account,” Hughes told Seeking Alpha. “Once funds have been uploaded, you can make a request to one of our merchant locations which will grow to just over 15,000 locations within the next year. The user goes to the location, presents phone with secure code; they are given cash and they are on their way.”
2. Hughes Got the Idea for Spare When He Was Working at a Hotel Bar
Hughes came up with the concept for the app when he was working at a hotel bar in Los Angeles. Neither the bar nor hotel lobby had an ATM, so customers had to cross the street in front of the hotel and use a third party ATM if they wanted to have cash with them. Hughes realized that it would be easier if the bar could simply give cash to the customers.
“Spare is mainly solving the issue of liquidity with your own bitcoin balance,” Hughes told Bitcoinist. “So, when you don’t have a bitcoin ATM nearby – you would use our merchant network. The merchant does not have to accept bitcoin, as the technology converts and issues a market value that can be redeemed in cash… No more you have to waste time searching for Bitcoin ATMs, as everything can be done directly from your iOS device.”
In May 2016, the Spare app received a glowing rating from the Arcview Group’s Investor Forum in Portland, and was subsequently given a $50,000 Winner’s Fund investment.
3. Hughes Cited Shark Tank’s Mark Cuban as One of His Business Idols
In an interview with the Direct Cannabis Network, Hughes talked about his role as CEO. “The toughest reality is that the CEO is the loneliest position of the company. You will spend sleepless nights trying to figure out what the proper course of the company should be and honestly, you are the only person who can make that decision,” he said.
When asked what can be done to remedy these stresses, Hughes offered a few solutions. “Get yourself some advisors that are outside of the company but have been a CEO a few times. They will be the best people to speak to when things feel like they are going sideways,” he reasoned. “Know the difference between confidence in what you have created and confidence in if that creation has a place in reality. There are a lot of sh**ty ideas out there. You don’t want yours to be one of them.”
Hughes cited Elon Musk, Brad Feld, Marc Andreesen and Shark Tank‘s own Mark Cuban as business inspirations. He told the Cannabis Network that these men were worth watching for their “wise words” and “viewpoint.”
4. Hughes Wants a Shark Tank Investor to Help Him Expand the App’s Reach
According to the Shark Tank Blog, Hughes has raised an estimated $350,000 in venture capital. That said, he’s yet to land any merchants or major sales, and is going into his Shark Tank pitch with a “pure start-up opportunity.”
In January, Spare announced its partnership with the software company Gopher Protocol. Hughes discussed the partnership, as well as the ways in which he’s used platforms like Samsung and Paypal to thrive. “Spare does not have a ‘partnership’ with any of the companies above. However, we utilize their publically available API to facilitate transactions,” he explained.
“One of the primary benefits of the partnership with Gopher is that they will be a wallet solution that will allow for a greater range of access to the un/under-banked community,” he added. “We see great possibility in the growth of Spare’s initial offering to this base of users as the partnership matures.
5. Hughes Landed a $400K Deal In Exchange for 12.5% of the Business
Hughes managed to land a deal with Mark Cuban, after pitching on Shark Tank. Cuban purchased 12.5 percent of the business in exchange for the $400K that Hughes requested.
Cuban said that the Spare app struck a chord with him, as he struggled to get money from a bank when he was starting out. “When I was broke and sleeping on the couch, I couldn’t open up a bank account. You needed to have 200 bucks. You needed this, you needed that. They didn’t give me one,” he said.
Fellow Shark Barbara Corocoran spoke highly of Hughes, even if she didn’t choose to invest. “Although the product wasn’t for me, I always say great entrepreneurs are risk takers and salespeople at heart,” she wrote on Twitter. “And I gotta admit, D’Ontra’s got both qualities. I’m excited to see where he takes his business next with @mcuban.”