Jassby

Jassby

Growth Stage

Mobile Money App and virtual debit card for kids and teens

Mobile Money App and virtual debit card for kids and teens

Overview

Raised to Date:
$654,174 - RegCF
$2,904,170 - Total

Total Commitments ($USD)

Platform

SeedInvest

Start Date

10/29/2020

Close Date

01/07/2021

Min. Goal
$25,000
Max. Goal
$1,070,000
Min. Investment

$1,000

Security Type

Equity - Preferred

Series

Seed

SEC Filing Type

RegCF / RegD 506(c)    Open SEC Filing

Price Per Share

$3.17

Pre-Money Valuation

$25,846,022

Rolling Commitments ($USD)

Status
Funded
Reporting Date

01/30/2021

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$9,345

# of Investors

663

Momentum
Funded
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Year Founded

2017

Industry

Consumer Products, Goods & Services

Tech Sector

Fintech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

Low

Location

Waltham, Massachusetts

Business Type

High Growth

Jassby, with a pre-money valuation of $25.8 million, is raising funds on SeedInvest. It is a mobile money app for families that allows parents to share money with their children while also giving them hands-on experience about financial literacy. The app enables parents to set chores and allowance and a financial wellness plan for the kids. Benjamin Nachman founded Jassby in 2017 and has raised over $5 million in previous rounds of financing. The current crowdfunding round has a minimum goal of $25,000 and a maximum goal of $1,070,000, and the proceeds will be used for R&D and marketing. Jassby has over 400,000 installs and 150,000 completed registrations.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$95,066

$450

COGS

$234,322

$8,640

Tax

$0

$0

 

 

Net Income

$-3,216,947

$-1,851,282

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$463,272

$1,159,627

Accounts Receivable

$380

$0

Total Assets

$844,535

$1,352,929

Short-Term Debt

$228,086

$92,956

Long-Term Debt

$2,500,000

$0

Total Liabilities

$2,728,086

$92,956

Financials as of: 10/29/2020
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Synopsis

Unbanked and underbanked populations have long been ignored by banking institutions. This is because of the seemingly small amount of value they bring to the table. However, as technology has brought transaction costs down, this situation has begun to change. The sheer size of this population has also helped in this regard. One sub-segment of the unbanked and underbanked that is catching attention is the group that includes Generation Z — those aged 7 to 22. The older tranche of this group is eligible to work, so wages there can factor into the equation. For the younger members, cash is generated largely from allowances amounting to $41 billion per year as of 2017. By 2020, that figure should be closer to $72 billion.  Adding on wages and other sources of cash, spending power for this group increases to about $143 billion annually. 

One company hoping to capitalize on this sizable market opportunity is Jassby. In essence, the firm has built and launched a money and banking app with a virtual debit card feature in it. Unlike other apps in the space, though, Jassby is dedicated to today’s youth. Through its platform, minors can set up digital payment options that can either be used in-app or through vendors. The former is made possible by what management calls Jassby Mall. This is an online store with thousands of products from companies like Nike, Starbucks, Apple Music, Nintendo, and more. If users don’t want to spend the money through the ecommerce side of the platform, they can use it like any person would use a virtual debit card. This is possible thanks to Jassby’s co-branded arrangement with Mastercard. 

Because most of the users on the platform are likely to be minors, parental oversight has been built into the process. Parents, grandparents, and others can send money instantly to the youth utilizing the platform. Parents are also able to monitor spending and savings. They also have the ability to set up an automatic allowance, set up and manage chores, and more. One big part of the platform is centered on financial literacy. Management intends to provide educational content on this topic through the platform. Plus they will allow the app to monitor spending and savings habits with the end goal of establishing a “Financial Wellness Score” for each user. This score will relay to the users and their parents how financially prepared said users are for the real world. 

In time, Jassby intends to offer a large suite of services for its users. Once they turn 18, users will be given the opportunity to be approved for a credit card, plus they will be able to open a checking account. Eventually, Jassby wants to expand its services to include auto loans, personal loans, mortgages, insurance products and investment products. These will all open up new avenues for revenue, but for now the business will rely on two primary sources of income. The first is a 1.5% fee it charges to merchants when users buy products or services with their virtual debit cards. The second is a 15% commission on all products or services sold through Jassby Mall. 

Jassby’s current SeedInvest raise has been rated a Neutral Deal by the KingsCrowd investment team.

Next Section: Price

Price

From what we know about the app, the price being asked by management looks fairly high. In order to keep growing the business, management is hoping to raise $6.05 million through a side-by-side offering. The pre-money valuation assigned to Jassby by management is $25.85 million. This surprisingly high price — relative to the firm’s traction — has netted Jassby a very low price score.

Next Section: Market

Market

The problem with underserved or unserved markets is that they are often opaque by definition — making it difficult to fully assess the market opportunity. We do, however, know some important things about this space. For starters, total allowances for the 74.1 million children in the US come out to about $41 billion annually. This is based on 66% of parents providing their children with allowances. This brings the average weekly allowance to about $30, up 38% from 2016 alone. Total spending power for all Generation Z members, however, is far larger at $143 billion. This gives us a nice range to work with.

Using the $72 billion allowance figure, and applying the 1.5% commission rate on purchases, this implies an annual market opportunity of $1.08 billion. If we use, instead, total buying power of $143 billion, this grows to $2.15 billion annually assuming complete market saturation. If, instead, we assume that all capital is spent through the platform’s Jassby Mall, the opportunity would be greater. At that point, it would range between $10.8 billion and $21.45 billion annually. In an effort to narrow this window, we dug up some interesting statistics. 

According to one source, 45% of allowance funds spent go toward outings with friends. Another 37% goes toward purchases on digital devices or downloads. That leaves 18% that’s unaccounted for. Using these figures, though, the total addressable market opportunity might look closer to between $5.26 billion and $10.45 billion. This small size warrants a below-average rating from our system when it comes to market opportunity. This is due to one simple fact — even if management can achieve a sizable portion of the market, its overall upside is far more limited than a company in a larger space.

Next Section: Team

Team

For where its traction lies, the management team of Jassby is fairly large. The company has four executive-level positions. The key member of this team is Benjamin Nachman, Jassby’s founder and CEO. Prior to setting up Jassby, Nachman served as the Chairman of the Board for Credorax, a global e-commerce payment cards acquirer and processor. It had operations established in 34 countries. Experience there is incredibly close to what Jassby’s core operations are, so this alone makes Nachman qualified to run a startup like this. Prior to serving at Credorax, Nachman worked as a Partner at Reifenberg, Eckstein, Nachman & Co. Law Offices. That firm’s focus was on corporate, IP, and investment law, as well as litigation. 

Next in line at Jassby is Jim Glatiotis, the company’s CTO. Prior to joining the firm, Glatiotis worked as the VP of Commercialization at Tego Inc. This is a business that is focused on the technology side of asset tracking and IoT data management. Before that, he was an Executive VP and CTO for REZ-1, a provider of software and services aimed at managing domestic container fleets. 

Another key person at Jassby is Steve Reidy, the company’s CFO. He previously worked as a consultant at Beaver Brook Consulting. That firm’s specialism involved strategic, financial, operational, and human capital consulting services. Before that, Reidy was employed as the CFO for PI Worldwide, an SaaS provider of workforce assessment tools. Reidy’s job prior to that was as a VP of REZ-1. The last key person at Jassby is David Laubner. He currently serves as the business’ Chief Revenue and Marketing Officer. Before this, he worked as the Sales and Marketing Lead for Amazon. There, he focused on marketing strategy, brand, TV, performance marketing, and more. He came into Amazon with that company’s acquisition of Blink, where he served as Head of Digital Marketing, Sales, and E-Commerce. Prior to his time at Blink, Laubner was the VP of Marketing at Fuze. 

This team’s relevant domain experience — particularly that of its CEO — is a big bonus for investors. As a result, Jassby’s team score is one of its strongest across all five metrics. 

Next Section: Differentiators

Differentiators

Though the concept Jassby is working on may sound novel, there are actually a good deal of firms out there that are similar in nature. In its own filings, management discussed a few of these, including BusyKid, Greenlight, Current, and STEP. Each one of these offers next-generation debit card features through a mobile app. The one that most closely resembles Jassby is STEP, which also provides safety features and a savings account option for users. It is also — unlike many other competitors out there — free to the users. 

We also reviewed some firms not included in the list of competitors, but that do fit the bill nevertheless. Examples include Go Henry, FamZoo, and Chore Check. These players are more aligned with making sure chores are completed with payments made in response. Most of these services do come at a monthly cost, though, so Jassby is different in that regard. Another differentiator is that Jassby does plan to send approved virtual credit cards to its users upon their 18th birthday. Plus, management has made clear their longer-term goal of expanding to other financial products and services. 

While these differentiators are important, they aren’t enough to completely offset the fact that this is a crowded space. Jassby faces much competition, and many of the differentiators it does hold could be replicated by another company. Altogether, Jassby’s differentiators score is above average, but not especially strong. 

Next Section: Performance

Performance

Since launching in 2019, Jassby has seen a nice amount of traction. According to management, the app has been downloaded more than 450,000 thousand times. It has also seen more than 175,000 registrations completed. In the fourth quarter alone last year, 4,880 families came onto the platform and over $420 thousand worth of orders were placed on it. With a cost per registration of $2.95, Jassby has the potential to grow and if management is right about the near future, things are looking up for the firm. For 2020, management expects sales to total $2.95 million, though the company is still slated to lose $2.65 million for the year. By comparison, in 2019, Jassby reported revenue of $95,066, and with that it saw a net loss of $3.22 million and net operating cash outflows totaling $3.17 million. In 2018, revenue was just $450, with a net loss of $1.85 million and net cash outflows totaling $1.76 million. Even though these losses and outflows are significant, the annual rise in revenue, combined with user adoption, is all encouraging. Therefore, Jassby’s performance score is strong. 

Next Section: Other

Bearish Outlook

While there are bullish aspects to the Jassby deal, there are undeniably bearish aspects to it as well. For starters, the valuation looks quite high. This is at least until management can prove its revenue projections for 2020 are accurate. Even then, the net losses are an issue. Another negative to consider is that the app, on the Apple App Store, has a low rating of just 3.1 stars. Many of the competitors we examined have four to five stars. That suggests the business has some issues it needs to contend with. Add on to this the fairly small market size at present, and it’s clear that there are distinct concerns for potential investors. 

Next Section: Bullish Outlook

Bullish Outlook

Bearish issues notwithstanding, there are some bullish attributes that warrant consideration too. The company clearly is differentiated to a reasonable degree compared to the competitors our team examined. The downloads and user registration figures are definitely encouraging to see. Management’s partnerships, primarily with Mastercard, should be viewed in a favorable light. Another positive for the firm is its broader business strategy to have an e-commerce platform integrated to it. Using this, management wants to eventually expand to other opportunities. Throw in a qualified management team, and there’s a lot that investors can be happy about.

Next Section: Executive Summary

Executive Summary

In all, Jassby looks to us to be an interesting business for prospective investors. The company does have some issues that management needs to contend with — a low approval rating, negative cash flows, and more. However, Jassby does have clear potential, if these problems can be solved. As the situation currently stands, the issues that do exist prevent us from giving the business a high rating. Therefore, Jassby is a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com

Analysis written by Daniel Jones.

 

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Jassby on SeedInvest
Platform: SeedInvest
Security Type: Equity - Preferred
Valuation: $25,846,022
Price per Share: $3.17

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