Piece of cake – we escaped corporate life to launch a fintech app

In 2013, Charlotte Kohlmann (ex-Deutsche Bank) and Michelle Songy (ex-Coca-Cola finance) left the safety of their corporate jobs to launch a fintech startup in the UK. Here, Michelle Songy, explains how they started up:

Charlotte and I were loving our adventurous ex-pat life living abroad in London – especially exploring the diverse mix of restaurants the city had to offer, with new and buzzing ones opening each week. One night at dinner, we briefly chatted about wanting to bust out of the corporate world and do something more creative and entrepreneurial.

As we were in a restaurant at the time, our thoughts were service-themed. We came up with the idea based on our frustration that no matter where you went to dine in London, the payment part of the restaurant experience was always sloppy, prone to error and outdated. We thought there must be a better way using a simple app-based interface.

We kept our idea super secret from friends and colleagues calling it our project “RAP” (Reserve and Pay). And no one found out about it for another year.

We spent hours after work and at weekends researching the systems that restaurants used and how payments worked. We were surprised to find out that none of their existing systems were connected.

From the reservation system, ordering system (point of sale) to payment terminals, nothing is integrated and all of them require manual reconciliations at the close of business. This can add hours to the staff’s work each night.

Restaurants asked for a simple system – one that was linked together would be their ideal solution. There seemed to be a couple of competitors in the US, but nothing taking off. We thought the mobile payment apps at the time were too complicated and time-consuming. We wanted to make the fastest, slickest way to pay your bill and also split it easily between friends (such as our friend who ordered the most expensive bottle of wine and the girl who asked for a side order of broccoli).

So after one year of working on it as a side project we had a full business plan, strategy, and financials to back up how we would raise £150,000 and sustain the business. We were also nervous. We realised we needed Entrepreneur Visas to be able to remain in the UK, but we thought that an international city with a growing tech scene (and long waiting times to get your restaurant bill) meant that London was the best place to start our fintech venture.

We also feel that the UK is more supportive of entrepreneurs with its “we’re all in it together” attitude compared to the US, which can feel overcrowded and more competitive. The UK offers a vibrant, resource-rich environment for entrepreneurs to thrive in. London, being an international city, is a wonderful testing ground to scale a global business.

After raising our first round of finance from a group of angel investors in the hospitality industry, and having had our visas approved, it was time to begin. Without one restaurateur contact or any working knowledge of building an app, 18 months ago we used our first lot of capital to hire a developer.

A few people warned us that mobile payments were a crowded and complex space. However, although a few chains were testing their own applications, the majority of independent restaurants, pubs, bars and clubs have never used mobile payments before. We saw this as a massive opportunity and I’m happy to say we are starting to see it pay off.

With the Cake app, which we launched last month in more than 25 venues – from the Rum Kitchen in Soho to North Audley Cantine in Mayfair – customers are notified of any payments they make against a cheque. So once you’ve paid in full, the bill closes off automatically as paid. They don’t even have to do anything manually.

And, if someone leaves or forgets to press pay from their phone, they will receive both a message and an email receipt to say that their bill has been auto-charged.

The response from both customers and restaurant staff has been amazing, and we’ve been delighted to see how well it’s going. Over the last 12 weeks the amount spent on the app has been increasing by more than 20% every week.

We are determined to take Cake to the next level. We’ve just gone live in a crowdfunding campaign with Crowdcube to help us continue to add more venues and to improve how the app works. We’re aiming to have over 100 venues live by the end of this year, and expecting to have more than 30 employees by 2017.

Michelle Songy is the co-founder of Cake.

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