Bepo
About this raise
Bepo, with a valuation of $9 million, is raising funds on Wefunder. The company has developed an app that enables digital tipping. Bepo is solving the problem of cash tips disappearing as people don’t carry cash anymore and bringing a digital solution to millions of service workers and businesses. The platform has over 1,100 registered workers and has increased the average tip a service worker receives by 220%. Ian Sweeney founded Bepo in 2023. The current crowdfunding campaign has a minimum target of $50,000 and a maximum target of $1.24 million. The campaign proceeds will be used for product development, marketing, sales, and operational costs.
Investment Overview
Invested $68,090 :
Deal Terms
Company & Team
Company
- Year Founded
- 2023
- Industry
- Financial & Insurance Products & Services
- Tech Sector
- Distribution Model
- B2B/B2C
- Margin
- Medium
- Capital Intensity
- Low
Financials
-
Revenue
-
$261
as of FY2023
- Monthly Burn
-
$11,150
as of Jan '25
-
Runway
-
4 months
as of Jan '25
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Synopsis
Bepo is a company that addresses the modern challenge of diminishing cash tips in the service industry. With the decline in cash usage, service workers often miss out on tips that were traditionally given in cash. Bepo has developed a digital tipping platform that enables tippers to use popular digital payment methods like Venmo, Apple Pay, Google Pay, CashApp, and credit cards without the need to download an additional app. This solution is designed to accommodate both service workers and businesses who are adjusting to a cashless society.
The primary customers of Bepo are service workers and the businesses that employ them. These customers benefit from Bepo's platform, which helps them collect and track tips digitally. Service workers have reported an increase in the average tip amount by 220% since using Bepo, highlighting the platform's effectiveness in capturing previously missed income opportunities.
The problem Bepo addresses is the decline in cash tips due to the increasing preference for cashless transactions. As fewer people carry cash, service workers are at risk of losing a significant portion of their income. Bepo's solution is a digital tipping app that integrates seamlessly with existing payment systems, allowing users to tip service workers conveniently and efficiently.
In everyday scenarios, this problem is evident when individuals dine out, take a taxi, or receive personal services where tipping is customary. Without cash, many people find themselves unable to tip, leaving service workers without the gratuities they depend on. Bepo's platform resolves this by allowing customers to tip using their preferred digital payment method, ensuring that service workers can still receive tips in a cashless economy.
Price
Bepo is currently raising funds through a SAFE (Simple Agreement for Future Equity) with a valuation cap set at $9 million. The SAFE does not include a discount, which means that early investors will convert their investment into equity at the same price as later investors in a future priced round. This structure provides a clear framework for how future equity will be allocated, aligning investor interests with the company's growth trajectory.
The valuation cap of $9 million establishes a ceiling on the conversion price, offering investors a potential upside if the company’s valuation increases significantly in subsequent funding rounds. However, the absence of a discount means that early investors do not receive a price advantage over later investors, which is typically a feature in many SAFE agreements.
To achieve a 10X return, Bepo would need to reach a valuation of approximately $90 million at exit. This scenario would require significant growth in user adoption and revenue, given the company's current pre-revenue status and modest annual revenue of $261. The exit potential for digital platforms in the financial services sector often depends on achieving scale and demonstrating sustainable revenue streams.
The current revenue multiple, calculated at 34.5x, suggests that the deal may be overvalued relative to its industry and growth rate, potentially offering less favorable terms to investors. High revenue multiples can indicate that the current valuation is based on anticipated future growth rather than existing financial performance. For Bepo to provide substantial returns, it would need to significantly enhance its market presence and operational metrics.
Market
The market for digital tipping solutions, which Bepo addresses, is influenced by several key drivers and trends, notably the decline in cash usage and the growing adoption of digital payment methods. As society shifts towards a cashless economy, the need for alternative tipping solutions becomes increasingly apparent, impacting the service industry where tipping is a substantial component of workers' income. This trend positively aligns with Bepo's offering, as it addresses the gap created by the decline in cash tips.
The addressable market in the U.S. for tips is estimated to be $36.4 billion annually. This substantial market size presents a significant opportunity for growth, provided Bepo can effectively capture and convert a portion of these transactions to its platform. The market growth rate, however, is currently static, indicating a mature market where growth will likely depend on capturing market share from existing cash-based tipping methods rather than expanding the overall market size.
Team
Ian Sweeney is a seasoned entrepreneur and product leader with a diverse career spanning multiple industries. Prior to founding Bepo, Ian served as SVP and GM of Mobility at Trov Inc., where he led innovative insurance solutions for emerging mobility services, contributing to Trov’s acquisition by Travelers Insurance. Before Trov, he founded Intersection X, a consultancy focused on product development and go-to-market strategies for startups in sectors like fintech, IoT, and machine learning. Earlier in his career, Ian was Vice President of Product at Taulia Inc., where he drove product vision and strategy until its acquisition by SAP. As the CEO and Co-Founder of billFLO, he developed real-time cash flow management tools for small businesses, leading to its acquisition by Taulia. Ian also held leadership roles at Dolby Labs and Lucent Technologies, managing large-scale projects and intellectual property systems. With expertise in SaaS, product management, and business strategy, Ian combines technical acumen with entrepreneurial vision to drive innovation across industries.
Differentiation
Bepo operates in a competitive landscape with several established players in the digital tipping space. Competitors such as TipYo and Tip Jar offer similar services, facilitating digital tips via mobile payments. TipYo, for instance, partners with hospitality businesses to integrate digital tipping into their existing systems. Tip Jar, on the other hand, provides a platform for cashless tipping across various service industries, emphasizing seamless integration with popular payment apps.
In terms of company size, Bepo is in the early stages, with a focus on growing its user base and platform capabilities. Competitors like TipYo and Tip Jar may have more established market presence and possibly larger user bases, given their longer tenure in the market. Product quality across these platforms tends to be similar, as all aim to enhance the tipping process by leveraging digital payment technologies. Pricing models typically revolve around transaction fees, though specific rates can vary based on partnerships and volume.
Bepo targets a demographic that includes service workers in industries such as hospitality, personal services, and transportation. These workers often rely on tips as a significant portion of their income. The platform also appeals to businesses in these sectors that are transitioning to cashless operations and seeking efficient ways to facilitate tips for their employees. Additionally, the end users—customers who tip—are generally individuals who prefer using digital payment methods over cash, aligning with broader trends towards cashless transactions.
Performance
Bepo's financial performance reflects its early-stage status, with modest revenue figures and a focus on managing operational costs. The company reported an annual revenue of $261, indicating that it is still in the nascent stages of monetization. This figure suggests that while the platform has user traction, translating this into significant revenue remains a challenge.
Financially, Bepo's most recent monthly burn is approximately $11,150, with cash on hand reported at $45,000. This burn rate indicates that the company has a limited financial runway, necessitating careful management of expenses and strategic deployment of any new capital raised. The current cash reserves provide a relatively short operational buffer, emphasizing the need for either increased revenue generation or additional funding to sustain growth and development efforts.
Despite the low revenue, Bepo has successfully registered over 1,100 workers on its platform, which is a positive indicator of user engagement. The reported increase in average tips by 220% for these workers suggests that the platform is effectively addressing its core mission of enhancing tip collection for service workers. However, converting this user engagement into a scalable and profitable business model remains a key challenge for the company.
Risk
Bepo faces several unique risks associated with its current business model and market positioning. A significant concern is the high revenue multiple of 34.5x, which may suggest the company is valued more on potential future growth rather than its current financial performance. This high multiple presents a risk to investors, as it implies that the company must achieve substantial growth to justify its valuation.
Another risk factor for Bepo is its status as a two-sided marketplace. Building and scaling such a platform can be capital-intensive and challenging, as it requires simultaneously attracting and maintaining both service workers and tippers. Success in this model often hinges on reaching a critical mass of users, which can be difficult in a competitive environment.
The company's current financial position also poses a risk. With a low annual revenue of $261 and a recent monthly burn rate of $11,150, Bepo's financial runway may be limited, potentially constraining its ability to sustain operations and invest in growth initiatives without additional funding.
Bepo operates in a competitive landscape with low barriers to entry, which could lead to increased competition from other digital tipping platforms. This competitive pressure requires the company to continuously innovate and effectively differentiate its offering to retain and grow its user base.
Bullish Outlook
Bepo's bullish outlook is supported by several key factors, particularly the substantial market opportunities available in the digital tipping space. The decline in cash usage and the rise of cashless transactions create a favorable environment for Bepo's platform. The U.S. tipping market, valued at $36.4 billion annually, presents significant potential for growth as more service industries and consumers shift towards digital solutions.
A unique strength of Bepo is its app-free integration with popular digital payment systems like Venmo and Apple Pay. This feature simplifies usage for consumers, potentially enhancing user adoption. The platform's ability to increase average tips by 220% for service workers demonstrates its effectiveness and appeal, providing a competitive edge in enhancing worker income.
Growth drivers for Bepo include leveraging the trend towards digital and mobile payments. As more consumers adopt these technologies, Bepo's platform is well-positioned to capture a larger share of the tipping market. The company's expansion plans to increase its registered worker base and explore partnerships with businesses in various service sectors could further drive growth.
While Bepo is still in the early stages financially, the potential for significant market penetration and revenue growth exists. The company's focus on enhancing user experience and expanding its offering could lead to improved financial metrics over time, aligning with industry benchmarks as the platform scales.
Bearish Outlook
Bepo faces several challenges that contribute to a bearish outlook. Market-wise, the digital tipping space is becoming increasingly competitive, with established players like TipYo and Tip Jar already having footholds. These competitors may have more resources and a larger user base, making it difficult for Bepo to differentiate itself and capture significant market share.
From a financial perspective, Bepo's current revenue of $261 indicates limited growth, and the high revenue multiple suggests that the company may be overvalued. This valuation could deter potential investors who are cautious about paying a premium for a company with minimal revenue and an unproven business model. Additionally, Bepo's cash reserves of $45,000 and a monthly burn rate of $11,150 highlight concerns about its financial runway, which could impede its ability to sustain operations and invest in growth initiatives without additional funding.
Growth inhibitors include potential technological challenges in scaling the platform to accommodate a larger user base and the need to integrate seamlessly with various digital payment systems. Furthermore, achieving broad market adoption is a hurdle, as the platform must convince both service workers and consumers to switch from existing cash or alternative digital tipping methods.
Executive Summary
Bepo is a digital tipping platform designed to address the decline in cash tips by enabling payments through popular digital methods. Its core customers are service workers and businesses that benefit from enhanced tip collection in a cashless economy.
In terms of valuation, Bepo is raising funds through a SAFE with a $9 million valuation cap. The company is pre-revenue, with an annual revenue of $261 and a monthly burn rate of $11,150. These figures highlight the early-stage nature of the business and the need for careful financial management. The high revenue multiple suggests that the company may be overvalued relative to its current performance, posing a risk to investors.
The market for digital tipping is sizable, with an addressable market of $36.4 billion in the U.S. Bepo targets a niche within this market, focusing on service industries transitioning to cashless transactions. The company's differentiation lies in its user-friendly platform that integrates with existing digital payment systems, positioning it well against competitors like TipYo and Tip Jar.
Bullish factors include the growing trend towards digital payments and the potential for Bepo to capture a significant portion of the tipping market. Conversely, bearish factors highlight the company's need to achieve substantial growth to justify its valuation, alongside competition from established players.
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Company Funding & Growth
Funding history
- Total Prior Capital Raised
- $310,000
- VC Backed?
- No
Close Date | Platform | Valuation | Total Raised | Security Type | Status | Reg Type |
---|---|---|---|---|---|---|
05/01/2025 | Wefunder | $9,000,000 | $68,090 | SAFE | Funded | RegCF |