How do you go from serving in the British Army to founding a voucher platform that’s eventually bought by MoneySuperMarket.com?
And what sort of challenges do you face when trying to scale an API business that has massive value but largely unseen powering other businesses!?
We spoke with Alex Preece, Co-Founder & COO of Tillo, to find out, and even learnt about how Tillo helped feed 1.5M children a week during the pandemic.
Based in Brighton, Tillo helps brands to drive sales and reach new audiences via an easy-to-use digital gift card platform. For businesses looking to reward and incentivise their customers or employees, Tillo offers on-demand access to gift cards from the widest selection of the world’s favourite brands. Tillo works with the likes of Amazon, Starbucks, H&M, Uber and Nike, and in 2019 processed $¼ Billion worth of gift cards across 26 different markets.
Sure. So I left school at 16 and went to serve in the British Army for nearly 7 years, including operational tours in both Iraq and Bosnia. After jumping out of lots of planes and shooting guns, I realised that I had a bit of a thirst for technology!
So I went on to co-found a deal and voucher platform that was sold to MoneySuperMarket.com just 8 months after inception.
At this time, I was keeping a keen eye on Groupon and how they were operating in Chicago. And I wanted to replicate that here in Brighton in the UK. So Tillo was born, or at least an early version of it!
We quickly learnt however that sending people to the likes of Zizzi’s with paper-based vouchers wasn’t going to work in the long run, so we moved to digitise the whole operation and then found our niche in the B2B space through working very closely with Eagle Eye.
Yes, so it was interesting seeing just how fragmented this whole process was. If you were a business looking to run incentives, you had to deal with each retailer separately and that took an enormous amount of effort.
No-one had really connected up the gift card brands in the same way as Visa or Mastercard had done for banking.
Our first step was to connect all the suppliers and bring together a pool of merchants or retailers onto the Tillo platform. Then we tackled the other side, the buyers.
To give an example, we have Quidco on the platform. They effectively use it as an affiliate network to be able to offer their customers the chance to shop across multiple brands. All Tillo does is enable Quidco to connect to our API, but the result is such that as a customer, you can move your wallet money across many different brands, and for the business, they’re seeing the money stay in retail as opposed to going straight to a customer’s bank account.
The other ways are very similar to Quidco actually.
There’s Honey for example, who were recently bought by PayPal. They follow the same model whereby a browser extension allows customers to collect points when they’re shopping – the customer can then turn these points into what’s called honey ‘gold’ that can then be used across a number of different gift cards.
There’s also employee rewards businesses – the likes of Reward Gateway or Next Jump that offer thousands of corporates perks/incentives – they all find this system much easier than having to deal with hundreds of separate retailers!
Indeed! We’re very lucky to work with these amazing, global brands. In fact, our numbers have been consistently healthy too – 100%+ year on year growth for the past 4 years! We got our initial seed money pretty easily through Passion Capital, and then Paul Forster, the co-founder of Indeed.com. And then we hit profitability really quickly after that.
Actually, the story didn’t pan out quite like that!
About a year ago, we attempted our Series A quest. But we just couldn’t find the right fit in terms of an investor.
Unfortunately, the B2B world we’re in isn’t seen as very sexy. The interest we did have just wasn’t right for us. That said, we did still complete a small fundraise at the start of 2020 to expand our board and since then our profits have stood us in really good stead too.
So one of the most important things to happen for Tillo this year was getting involved in the UK Government’s free school meal initiative. The Tillo technology effectively underpins the whole front end of this scheme.
Through it, we’ve managed to supply 1.5M children a week with meal vouchers, and bring on new supermarkets into the gift card space.
We’ve 150X’ed our transaction processing volume in the past few months – it’s been truly game-changing for Tillo.
Well that’s actually where our challenge now lies. We’d love to scale and open up in new markets and countries, but focusing exactly on where our strengths lie and how to repeat that for other markets is the challenge.
To date, it’s been two guys doing everything ourselves. But our little black books are now running dry and we realise we can only do so much as the founders.
We’ve recently brought on loots of new roles including a new Chief Revenue Officer, a Head of Marketing and Account Directors and many others to help us on journey.
But knowing the long-term strategy that sits above that is somewhat of an unknown for us right now. And putting in place the right infrastructure to scale is also a challenge.
Even coming down to remuneration – it’s such a minefield to know how to remunerate correctly, especially in this niche of B2B.
We’ve definitely been hit by the whole inability to do things face-to-face. Not just internally with strategy sessions and the like, but also externally with building up client relationships and doing deals.
I’m a massive advocate of getting out there and meeting people. So adjusting to this remote way of working has been tricky.
I love nothing more than a good CrossFit workout! And spending time with my two children – that’s always a good way to take my mind off things!
Thanks Alex – it’s been really interesting hearing all about your journey so far and we wish you all the best in taking Tillo to the next level and beyond!
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