Coinout, from Mamaroneck, NY, is yet another financial services company trying to figure out what to do with people's loose change. In this case, Coinout has devised a kind of "loyalty program" that customers can subscribe to that coin change would be deposited into.
Once a customer's balance has built up to a certain level, the money can be transfered to a bank, as a payout to Amazon, as a donation to charity, or to pay participating retailers with.
Customers can subscribe by merely sending a text and an account will be established (if one doesn't already exist) using their phone number as a key. Retailers will be incentivised to use the Coinout service because it can act as a "loyalty program" through which customers can save money and then pay out through. Additionally, by not having to dispense coins, Coinout believes they can reduce retailer's costs for carrying cash.
To earn money, Coinout will charge merchants $20 per month and 3% on each transaction. Coinout is four months old and, in that time, has processed a total of 2,500 transactgions. It was stated that 32% of transactions are still made in cash.
In terms of fundraising, Coinout has so far raised $460,000 in a friends and family round.
The entrepreneur behind Coinout stated that Coinout hoped to be in 700 locations by the end of the year and 3,000 location by the end of the year following. 100,000 locations is considered the "tipping point" where Coinout would become both profitable and common to be in general use.
Making A Deal
Several of the sharks showed an interest in Coinout and the idea. Mark stated that he liked the ability to collect incidental data on people through these transactions. But, in the end, the choice was between Barbara and Robert.
Barbara offered the $250,000 that coinout was looking for but with the contingency that Coinout reach 700 retail locations by the end of the year as they said they expected to do. The entrepreneur declined this offer because he believed it didn't show enough confidence in the company as he hoped an investor would.
Apparently, this was confident enough for the entrepreneur, despite the fact that the double equity being asked for bit the company's value in half, because Robert was chosen as their new investor and partner.