From consolidating its Canadian position, the fintech plans to expand to help more people make better financial decisions
Hardbacon, a personal finance application that more than 39,000 Canadians now use, has secured $706,000 in funding from more than 500 investors to go public and also solidify its Canadian position before reaching out globally next year.
“It’s not much money, especially in technology, given inflation and what’s going on with salaries, but it’s really about growth,” Julien Brault, Hardbacon’s chief executive officer, told Wealth Professional. “The cool thing is, at the beginning, you need the money to prove the model. Now we have found a model, which is lead generation, so it’s mainly to scale.”
The money will be used to hire a chief financial officer (CFO) with public company experience as Hardbacon goes public and pay more freelance writers to improve its content. Brault said its traffic now is more than 200,000 views per month, but it plans to reach 400,000 by year-end.
Hardbacon launched in 2017 to target the self-directed investor with some content, but more focus on its app, which connects to bank accounts, so can be used for portfolio tracking. It hoped to have a subscription model, but it was a hard sell during the pandemic since the banks were focused on pivoting to sustain their business and Brault said most individuals didn’t know how to invest in the stock market, which was a problem for the app.
The company has since switched to a lead-generation business, where it has content to attract traffic, but receives referral fees from financial institutions and brokers for the leads it provides. That’s become a more predominant model for those groups, which relied on traditional customer acquisition channels pre-pandemic.
“We’ve tried so many things over the years, and a lot of things have changed,” said Brault. “But we’ve just switched one word in our mission. Before, it was to help people make better investment decisions. Now, it’s to make better financial decisions. So, it’s still the same mission. So, every time we launch a new product or do a new partnership, we ask ourselves the question: ‘does it help people make better financial decisions?’ If the answer is no, then we don’t do it.”
Hardbacon is beefing up its insurance vertical and planning to provide more content for small and medium-sized businesses that don’t have a CFO, so the entrepreneur is making the financial decisions. That includes information on business credit cards, bank accounts, and financing options.
“I’m confident we’ve found a scalable business model, but I still feel we’re at the very beginning,” said Brault. He says Hardbacon is number two in the market, but wants to be number one in Canada before beginning to expand to other countries, both of which he hopes will happen next year.
“The goal is to basically become the dominant player in Canada, and then start to expand internationally,” he said. “We want to make sure that the Canadian operation is the cash cow before we go into the other markets because when you launch, let’s say, in Brazil, we’re to make zero the first year. It’s all investment. So, we want to make sure, before we do that, that the Canadian market is a stronghold for us.”
While the pandemic bankruptcies have diminished since 2002, Hardbacon is also hoping that a potential recession could drive more traffic to Hardbacon because “our business attracts more traffic in uncertain times.”
Hardbacon is also planning to go public to consolidate the market.
“There are still quite a few independents in this business, and it’s a fragmented market,” said Brault, noting that Hardbacon also has its eye on acquisitions, so it can rely less on the financial institutions.
“It gives us more ways to finance our deals, and that would give us more breadth of options in terms of finding single deals because, in terms of acquisition, we really know what we want. It would be websites that have traffic in the personal finance category or for small and medium businesses. We’re not looking to buy anything. It needs to operationally bring us closer to the goal of helping as many people as possible make better financial decisions.”