Hey people!
In this blog, I want to talk about an app which is now commonly used for sharing your expense with your friends and families. (Yes! it's splitwise)
For those who want to watch the video instead of reading it, here is the link:
A quick summary of what I will cover in this case study:
1) How did they find the Idea?
2) Their numbers
3) Covid Impact
4) Market research
5) Best features
6) Competitors
7) Popularity
8) Marketing strategy
9) My conclusion
10) What you can learn from this case study?
Without further ado let's start!
1) How did they find the Idea?
In 2011, there was a couple and were sharing their apartment with an individual, to save up money. They were splitting everything, all of their expenses, and things were going well. But soon they realized that they want to record each and every payment. so be it rent bills, or travel IOUs, or laundry, they wanted to record each and every transaction (so they can split them up equally).
But soon they faced a lot of problems because there were no common means. someone would put notes on the refrigerator, someone else would write in excel sheet or on their phones itself. They also tried out to find the solution i.e. if there is a way where all the payments can be recorded by everybody, but there were no common means at that time! so they developed their own app which we now know as Splitwise!
so how did Splitwise grew and became the most popular app for splitting up the bills? Let's understand further!
2) Their numbers
well, splitwise was one of the first companies which started working on this niche of expense splitting. that's why they got their funding in 2011 itself, just when they launched. And since then, 10 years have passed on, and they have received a total funding of around $30.2 Million.
They have seen over $90 Billion of transaction and expense splitting since its launch which is really huge!
3) Covid Impact
Additionally, when covid came, many people started to live together and started renting their apartments, so they can save some money. so more people started using this app. and as and when travel restrictions are being lifted, restaurants are opening up, countries are opening up, and group activities are starting, so this app will benefit more. and more people will start using this app (2021 may become a lucky year for them).
This thing has excited many of the investors and they see huge business potential in splitwise. That's why in their recent series A funding round they have got $20 Million in funding.
4) Market Research
Their major traffic is from the US, Canada, and India and their market is expected to grow at a compound annual growth rate of 12.4% until 2027 so it's really great.
Their market is expanding so the chance of capturing more market share increases.
5) Best features
One of the best things about Splitwise is, they store everything on the cloud. so you can access all of that from anywhere with an internet connection.
also, there is a minimum concern of identity theft because you do not require to link a bank account (Yes! you can use the app without that).
In case you want to record each and every transaction, then they have also integrated Venmo and Paypal in their app so that means you can record all of the transactions.
and the best part is: the splitwise calculator, online accounts, and this app are completely free.
Slowly Splitwise has started to gain so much popularity that many of the developers have started to come forward and redesign the app by themselves to remove some of the problems they faced.
6) Competitors
so even though, everything looks promising for now but it is operating in a very niche market with limited customers. and it is facing heavy competition from Tab, Settle Up, Splitter, Venmo, and goDutch (an Indian counterpart). The problem is that they all are targeting the same customer base.
for Eg: let us say, I have 5 options for splitting up my bills, so I will only use 1 app out of 5 available, right?
It's not like Instagram and youtube that I can use both things. so here they are facing more competition with respect to each other.
7) Popularity
Interestingly, even though Splitwise has its own shortfalls (like they do not explain that how they divided the whole expense, and many users get confused due to that) but I haven't seen and come across any app which is so popular and so widely used. It has 10M downloads and a 4.4-star rating on Google play itself. so you can see that it is very popular.
8) Marketing strategy
Do you know that they have heavy word-of-mouth publicity? Their 79% traffic comes from direct means i.e many people search about their app directly rather than ads. Whoever uses the app, also recommends it to their friends and family members. so it's really great!
only 1% of its traffic comes from social media accounts.
9) My conclusion
According to me, because of its great product and word of mouth familiarity they have the great opportunity to become one of the global leaders for interpersonal finances if they play their cards right!
10) What you can learn from this case study?
one thing to learn from this case study is that you need to find the problem and solution also. I have seen many people saying that I am not getting an idea for a startup or business but if you look around yourself, people have so many problems in daily life which we generally tend to overlook. We ignore most of our problems. Right? but why not we try to solve them?
if you look at splitwise, what problem did they solve? the one they and many people faced. But they were the ones who did not ignore the problem & found out the solution.
that's all for this blog guys! do tell me what you learned from this case study? and do you think that Splitwise will continue to grow or its counterparts will excel? Share your views in the comments section!
See you in the next blog!