What it meant to me to win the start-up collection – Phil Daneshyar, Kanda
Electrician Richard Fleeman had a problem. As an electrician, a customer he’d done his job for had gone bankrupt, leaving him £ 20,000 out of pocket. Was there a way for traders like him to make sure they got paid once the job was done? He discussed it with his cousin Rob Gallagher, who happened to be studying astrophysics at Cambridge University. The couple developed a digital platform that would be an escrow account for traders using cryptocurrency. The money would be released once the job was completed.
Richard and Rob brought their friend Phil Daneshyar, who had previous experience as an entrepreneur, to Dragon’s Den 2017 – the year he left the University of York – to set up a device to monitor your water usage. Though the dragons held onto their money, California-based 11 Health licensed the technology to monitor how dehydrated chronically ill patients were.
The trio launched Tradesmart website last December and later that month won a £ 150,000 investment from the Start-Up Series Fund through Worth Capital.
> See also: What it meant to me to win the start-up series – Scott Lever, Zobi
Worth helped the founders realign the company, renaming it Kanda – a nod to the word “openness,” which means openness and transparency – and dropped the idea of the stock account.
The feedback they received, according to Daneshyar, was that artisans were too busy and using cryptocurrency made the product too complicated.
Instead, Kanda evolved into a website that creates offers and invoices for traders. Prospective clients also receive funding for their renovation projects with 30 lenders, whether they are renovating a kitchen or installing a new bathroom. That way, Kanda kept it for both trade and customer.
> See also: What it meant to me to win the start-up series – Daniel Verblis, The Moving Home Warehouse
Search engines like Checkatrade help customers find craftsmen, but Kanda converts that into an accepted offer and then helps you get paid for it.
“You can’t just attack part of the chain, you have to solve everything,” says Daneshyer. “We carry out offers, invoices and payments, streamline operations and protect the trader until the end.”
To date, Kanda has received 700 registrations.
How important was it to get funding for the start-up series and what has Worth Capital done for your company?
We bootstrapped three Kanda by December. I worked on it full time with my own savings, Rob used part of his student loan while Richard was still working full time while we were developing the website. Our biggest problem was, can we stay fluid for another year? The answer now is yes, we can.
The investment allows us to work full time with no hesitation or worry, which means we can only focus on business. Second, we had a runway between 12 and 18 months so we could think strategically about where we were going.
The problem with bootstrapping a start-up is that you are desperately trying to keep growing sales so that you cannot clearly think about the longer term plan and product that you are trying to create.
How did winning the competition affect Kanda alongside the equity stake?
For me, I had done this type of fundraising before and I saw it as a game of sorts. They are just looking for a solution for an investor. But for Richard and Rob, who had never been through anything like this before, Kanda was a massive risk.
For them, it was a confirmation that we were on our way to making a change in an industry where we wanted to make a change. That meant that people believed in us as entrepreneurs to do this. It was a real confidence boost for all of us.
How has the COVID-19 pandemic affected your company?
We presented as Kanda at a fair in Manchester on March 12th. The very next day, the government announced very strict social distancing measures. We came home and said we have to face it. We canceled the office we rented in February and went on a virtual tenancy. We switched off all marketing activities, postponed partner deals and focused on our product for three months. We thought we just have to focus on developing the product for the next three months.
Likewise, there were craftsmen who found it very difficult during the lockdown. That is why we have set up a Facebook page with 300 to 400 members as a self-help group. We felt it was our duty to protect these guys.
Our business model hasn’t changed as the ability to offer finance is a huge draw for artisans, as is the fact that it is easy to navigate and the technology is up to date. We strongly believe that funding needs to be packaged in such a way that it is easy to use. We owe it to our artisans to make beautiful software that is easy to use because we want them to become digital businesses.
We have a long-term plan that will take two years to execute to get to where we want the product. We think we just have to ignore what’s going on out there. Yes, Covid is here, but the boilers will still fail!
What is the outlook for Kanda now?
If anything, people are spending more time at home and they’ll want to adjust to it whether it’s a home office, more living space, or building an extension. We know that apart from one other black swan incident, people want to use the product and it is defensible.
To this end, we hope to make another investment later this year.
Small Business and Worth Capital are partners in the relaunch of the start-up series – with £ 250,000 equity to be won every month!