Pockit: Virraj Jatania, Yuvraj Jatania, and Danny Jatania
Eminent entrepreneur Danny Jatania introduces a pre-paid card to save consumers money
Founded: 2012 Founder: Danny Jatania and sons Virraj and Yuvraj Turnover: £2.5m (first year projection)
With almost 25 years’ experience in business, if Danny Jatania says something is a good idea, believe him. The co-founder of health and beauty powerhouse Lornamead is tapping into a fast-growing market with his latest offering Pockit. The pre-paid card – which is sold online and branded with Mastercard – enables customers to control how much they spend, while offering access to exclusive discounts and deals. As well as being the first to offer cashback at the till, Pockit’s roll call of discounts already includes partnerships with Marks and Spencer, B&Q, Comet, Toys R Us, Halifax, Jessops and Aviva. With an increasing number of consumers seeking to manage their debts by using a pre-paid card instead of a credit card, Pockit is one to watch.
The market opportunity
Pockit is specifically targeted at 25-50-year-old men and women with a household income of between £20,000 and £70,000. However, as Jatania points out, the nature of the market is such that “everyone is a potential customer for us” – creating an enormous opportunity.
Entering at the early stages of an emerging sector, Pockit is well-positioned to beat its competitors to the punch. Indeed, Jatania claims it has already outstripped Clearcash, Orange and Virgin Money with the breadth of its offering.
By 2010 estimates from Mastercard, pre-paid cards will account for at least 4% of the European credit and debit card market by 2015. However, Pockit does face some challenges along the way. Principle in these, Jatania believes, will be expanding their relationships with retail partners to attract more customers – although this is likely to become easier as adoption of the card becomes more mainstream.
As a successful entrepreneur already, Jatania has been able to self-fund Pockit, to the tune of £500,000. With forecasts showing a first-year turnover of £2.5m, he is obviously confident that he will see a return on this investment.
However, he has hinted that he may seek external investment at a later date, from an investor who could also lend the business industry-specific expertise. Jatania explains:
“For a start-up, keeping up with the increasingly fast rate at which technology is changing requires a large amount of investment in software, hardware and resource. This raises the question of external funding and when is the right time to look to raise funds, by parting with equity. This is something we are giving consideration to at Pockit.”
The growth strategy
Jatania has already deployed an ambitious £1.5m marketing strategy, including online, magazine and newspaper marketing, and a variety of PR activities, while television advertising is also being explored.
To increase consumer adoption, Jatania is offering Pockit cards both on a monthly subscription of £3 a month and for a £5 one-off fee, to attract new customers (with the former offering greater perks, such as cashback).
He is also talking to corporate employers about introducing the card as an employee benefit for staff, at a discounted monthly rate of £1 – a strategy which has already attracted significant interest.
With his entrepreneurial sons by his side, Jatania hopes to grow Pockit to at least one million members within the next five years, forecasting a £40m turnover by the end of this period. He plans to get 40,000 of these cardholders on board in the first year (he amassed 2,000 in the three months after launching in beta alone).
Jatania then has his eye on international expansion, and the US, India, Nigeria and South America are top of the list.
When a legendary entrepreneur like Jatania champions a progressive consumer product, you stand up and listen. Having invested half a million pounds of his own money, retail giants Marks and Spencer, B&Q and Toys R Us are already on board.