Posted on: 05 Dec, 2019
Yallacompare is regarded as the leading finance comparison sites in the Middle East.
They raised $8 million in Jan 2019 to further scale their business.
In this article we’ll take a look at their business model to understand the drivers of their impressive growth.
Disclaimer: the information presented here is derived from public domains or third party tools and is by no means exhaustive of the business strategies used by Yalla Compare.
Let’s jump in.
Table of Contents
Founded back in 2011 by Jon Richards and Samer Chehab, Yallacompare went through what is arguably the best way to build a tech startup.
Jon noticed an inefficiency in the market for conveniently finding information around selecting financial products like bank cards or loans.
Like any successful entrepreneur, Jon decided to test the idea first.
He started blogging and sharing information and soon found himself ranking at the top of Google for relevant keywords.
As organic traffic soared, soon thousands of people were asking for more information on how to apply for banking products.
This provided proof that the problem they wanted to address existed and customers were definitely struggling to find relevant information about financial products.
Time for the solution.
It started to take shape when banks started contacting them saying they who saw an opportunity for collaboration.
That’s when Yallacompare shifted to the financial product comparison model and started generating revenue.
Aka proof of concept or in 2019 “startup speak” they were getting traction and working their way towards “product-market-fit”.
The ability to prove that they could acquire customers and generate revenue set them up nicely for when they met their first investor 3 years later.
They closed their first seed round of $500K and a year later their Series A in 2015 to the tune of $3 million.
Today Yallacompare is a platform business that connects users with financial product providers for loans.
They compare banking products like personal loans, car loans, credit cards, commercial loans, home loans, sme loans and more.
Also, in what is proving to be a master stroke, they were the first in the market to bring insurance aggregation in the UAE.
This means that users can now compare and buy a host of insurance types like health, car, life insurance and more right through their platform.
Let's consider the business and the products offered, who would be their target market?
When considering demographic distribution for their market segmentation we’re probably talking about working professionals maybe 21 years and above because the chances of getting a bank loan without having a salary are slim to none.
As for psychographic distribution we’d probably be interested in customers that show an interest in:
On the supply side of the their business model are the banks and insurers.
As the platform is free for users, this means that the supply side is where Yallacompare generates its revenue. More on this a little later.
YC generates close to 250K site visitors per month.
Almost 50% of their website traffic comes from search and content marketing. Plus, 60% of their insurance business is via organic traffic.
Jon’s background is in Digital Marketing so it makes sense that their content game is tight.
They produce socially relevant content like this article that educates users on VAT that generated close to 200 shares:
Or how about reaching customers through engaging content on social channels like this Halloween video that generated over 15,000 views:
They also reach customers through paid channels such as:
They also reach customers through events and sponsorships like Step conference and PR via being published in sites with massive audiences like The National.
Let’s put it this way.
If you’re looking for a car loan you’ll definitely want to check around with a few banks to know how much you’d get charged for interest rates, the loan amount you could receive, documents required to complete the transaction, how soon you'd could get the funds etc.
The idea is that you’d want to know what’s available so that you make an informed decision and find the best deal possible.
Where would you start? How would you start?
You'd have to search and sift through each bank’s website to find the information you need, then call them up and ask to speak to the right department, then being put on hold or wait for a call back form an agent.
And wait, and wait and wait.
With Yallacompare, the process is simplified down to a click on car loans and instantly you have 53 loan options to choose from.
Quickly compare and select the bank that’s most suitable to your needs, enter your details and the relevant person from the bank will call you back.
The amount of time and effort Yallacompare saves for users is tremendous!
That’s value right there.
What’s more, due to their existing relationships with suppliers they also provide users with exclusive rates that can produce savings of up 20%.
If your health insurance costs 8K.
You might be able to get it for 6.4K.
That’s a huge difference!
And now as a user this gives you the option to either save money or even consider taking the higher health plan.
Suppliers on the platform generate leads a lot more cheaply. This helps them reduce their cost of customer acquisition.
Clear value creation by helping these institutions both save and generate money. As a result it is expected that financial aggregators such as Yallacompare could eventually become the most common sales channel for these institutions.
Due to the data and size of traffic that their platform experiences, Yallacompare can also help suppliers create tailor made products that would add even more value to users.
One of the core criteria for their success is the strong strategic relationships they’ve built with both banks and insurance companies.
“We really focused on growing the brand within the industry so there wouldn’t be many, if any, C level bankers in the UAE, Qatar or Bahrain who wouldn’t know who we are” Jon Richards
With an impressive list of banks onboard:
This strategy looks to be paying off handsomely.
Other key partners include:
Yallacompare built their insurance platform from scratch.
This requires a high investment in tech and automation but makes the startup a lot more defensible as it is not easy to replicate such a monetary and time intensive investment.
They’ve also invested in a Call center to support the growing demand and customer base.
Geographic expansion to consolidate their position as the leader in MENA also requires extensive investment in market research, strategic planning and management teams.
Marketing and branding: Yallacompare recently underwent a re-brand from the previous name compareit4me.com which also involved a larger investment but adds to the startups positioning especially when entering new MENA markets. They also spend on marketing on educating customers and raising awareness around comparing financial products.
Partnerships such as the first of its kind collaboration with Smiles App by Etisalat will raise further awareness about insurance products for consumers and how affordable it can be.
Finally, as the company continues to grow they continue to invest in hiring necessary talent to meet the market demand.
Yallacompare generates its revenue through 2 main ways:
With the banking product comparison, clients take 90 days to pay invoices.
This means cash is needed to support the sales for that period (internal link).
“The bigger we get, the higher our accounts receivable, the more we need to manage cash flow”.
The insurance business represents about 50-60% of their monthly revenue and is growing.
Yallacompare represents over 76% of the insurance policies sold online in the entire GCC.
With a grand vision of being the dominant player in the financial comparison industry across MENA whilst educating consumers on proper financial planning you can’t help being inspired by Yallacompare.
Clear planning and educated decision making from the outset.
They decided to go ahead with their business after proving that the problem they were addressing existed instead of just believing they had a great idea that would catch fire.
The concept was validated by demonstrating that they were able to acquire customers and generate revenue.
Openness to continue learning new skills as the business grew and openness to continue learning about the customer needs led to being the first to introduce the “uber-successful” insurance aggregator and platform payment business model.
What does the future hold?
It could go down the road of using machine learning to make predictions for personalized products that users would value, or automating the complete financial product purchasing life cycle or even creating their own in-house insurance products.
We can only wait and see.
For now, their growth continues across MENA.
So let’s take all the lessons we can from them.
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