PledgeMe.Investment

Technology,



NZ $22,501 pledged


18 people pledged


1 month left


NZ $200,000 minimum target


Min

NZ$200,000

Max

NZ$2,000,000

11 11% Complete

Pledges will only be confirmed if the target is reached by: 25/09/2022 at 12:00 PM (NZDT)

Make a Pledge

About

PayAid

How PayAid was born

PayAid was created to disrupt New Zealand’s short-term lending scene, which, in our opinion, is outdated, inefficient and lacks innovation. Most traditional payday loan providers charge compounding interest rates. Together with layers of fees (such as late payment fees, establishment fees, extension fees, etc.), these old-school practices make it difficult for customers to get out of the debt cycle, especially for those living from paycheck to paycheck.


Our solution

PayAid is introducing an innovative, lower-cost financing solution to New Zealand. PayAid provides Kiwis with early access to a portion of their salary (pay advance) right from their phones. All this at a fixed fee of 5% per advance and no other hidden or late fees. When you get $100 from us you only repay $105 - nothing more.


Our straightforward process takes only a few minutes to complete and is paperless. Once the user has finished the sign-up process on the app - which takes about five minutes - we will calculate the user's advance limit and pay the chosen amount to their bank account.


PayAid is also a budgeting app that helps customers effectively manage expenses by understanding where their money is spent. A customer can allocate their budget to different expense categories and our algorithm will automatically update their budget as they spend. Our app will send them a notification when they are about to exceed their budget, allowing our customers to make better financial decisions.

 

Our vision

With our innovative approach to personal finance, PayAid aims to be the preferred choice for pay advance services, helping Kiwis manage their finances with ease.

Company overview

PayAid is planning to offer its consumers a better way to manage their finances by providing an alternative version of consumer credit that breaks away from traditional financial practices. PayAid is designed to provide its customers with pay advance services that allow them to get immediate access to a portion of their upcoming salary without having to rely on credit cards or other forms of debt.

PayAid approaches consumer credit in an alternative way, offering our users:

Short-term pay advance services, designed to give the consumer breathing room until their next payday or to fulfil urgent needs.

 
A straightforward, automated application process through a mobile application to allow customers an effortless way to receive a pay advance.

 
A simple, transparent fee structure of a fixed one-time charge, no late fees and no interest.

 
Budgeting tools to provide the customer with financial insights, allowing them to save and spend smarter.

 
Affordability assessment of each advance, using algorithms to compare the customer expense to their income. this ensures they never get more credit than they can afford.  

 


PayAid is primarily designed to support people who live from paycheck to paycheck or need some extra cash. We are committed to designing a business model that is easy to use and has a fair approach to finance.

 

 

Revenue model

PayAid plans to generate its revenue through customer fees. PayAid will provide its customers with access to a portion of their pay in advance (Pay Advance Service) for a fixed 5% transaction fee on the total advance. There will be no interest, no late fees, and no hidden charges. We estimate that $200-250 will be the average cash out amount.

Our product

The ID process only takes place at the registration. The returning customers do not have to prove their identity again, meaning they can cash out faster. However, if a user has been inactive for more than 30 days, they will need to reconnect their bank account.


Customer eligibility

Once the App is publicly available, the users wishing to use our service will have to meet eligibility criteria. The user must:

Be a New Zealand citizen or resident or hold a valid work visa

Have work income in their bank account of at least $450 per week

Have a New Zealand Drivers Licence or Passport

Be over 18 years of age

 

 

Use case

PayAid service has a broad use case. Customers can use their advance for any purpose as the funds are deposited directly into their bank accounts. 

Unlike Buy Now Pay Later services, which tie the customer’s funds to specific purchases, PayAid gives the customer freedom to use their funds however they see fit, whether it is for rent, holiday shopping or utility bills.

 


Benefits

According to our preliminary market research, in which we interviewed 20 potential customers, the most appealing attributes of our service are highlighted below:

Ease-of-use and speed: users register on their mobiles and get approved in seconds. 

Innovativeness: the budgeting tool is an attractive bonus point

Affordability: 5% transaction fee is manageable 

Flexibility: users can spend money on whatever they need 

 

Technology overview

 

PayAid has created a solution by combining our proprietary technology and several APIs from our providers, seeking to simplify and improve Kiwis’ access to credit.

Our easy and seamless sign-up process is the key attribute helping us appeal to a wide demographic. PayAid is designed to be as automated as possible to reduce the time and hassle of retrieving credit.

To achieve this, we selectively outsource certain functions where it is cost-effective, such as bank statement retrieval, ID verification, and direct debit application.

 

We have developed four core pieces of technology for the App:

 

Seamless verification: API integration allows us to instantly retrieve a user’s bank statement and check their provided ID against the government databases. By doing so, PayAid can offer a user-friendly experience while maintaining its low prices.

Pay cycle detection: our algorithm detects when the user gets paid, aligns the repayment schedule with the paycheck to make it easier for the customer to repay, and lowers the chance of debit failure.

Expense categories: user’s expenses are sorted into 20 categories, e.g. groceries, rent, utilities, travel. We then use these categories in the affordability calculator and the budgeting tool.

Affordability calculator: using data points we calculate users average spending on the necessities (rent, utilities, groceries, transportation). Then, to find the maximum cash out limit we compare the average essential expenses to their salary. PayAid retrieves this information using Illion bank statement retrieval.

 

 

What we have achieved

Even before COVID-19, we observed that people in New Zealand were struggling to get affordable credit. Unfortunately, the pandemic didn’t make the situation any better.

One article from Finder captured our attention, stating that one out of three Kiwis is living paycheque to paycheque. Surprisingly, an initial search showed no current credit providers in New Zealand offering affordable and accessible solutions.

The idea of bringing a straightforward, flat-rate pay advance service to New Zealand was born. We then started developing a business model, and in June 2021, we established PayAid Ltd.

Since then, we have self-funded and received private investment for research, development, branding, office rental and legal fees.

Future Milestones
Some of the upcoming milestones we are looking forward to are:


Market Size

 

After comparing the target market profile to our criteria for customer eligibility, we calculate the total number of potential customers to be 511,000. Early adopters must be likely to try new technology and have a stable income from a job. Those with personal income between $20,000 - $70,000 are most likely to use our service.


Those who earn less might not be eligible, while those who make more might not require our service. Additionally, those who live in more populated areas are more likely to learn of our service due to the marketing exposure.


We use data from similar services in Australia to determine our penetration rate.


As of November 2021, 8% of Australians, specifically 22% of Gen Z and 11% of Millennials, have used pay-on-demand services at least once.


Considering that pay-on-demand was introduced in Australia around 2019 & that PayAid will have the first-mover advantage, we estimate the penetration rate for PayAid in the first year to be 4% - 6% of the target market.


Thus, our expected market volume in the first year is approximately 20,000 - 30,000 active users.

Our team

Advisors

 

 

Offer

WHY WE ARE CROWDFUNDING

When you build a product for the people, it only makes sense that it's the people that get an opportunity to invest and be a part of the success.

We genuinely believe that PayAid is a service that will help the people of New Zealand. No one should ever feel stuck when they need money, not when they have a job and work hard.

So as we raise our funding round, we want to do so with a public crowdfunding campaign instead of private investment money. Unlike traditional investing, public crowdfunding means that anyone can be involved, rather than only a few wealthy individuals.

 

We're raising a minimum of $200,000 and a maximum of $2,000,000 and eligible investors can get involved for as little as $500.

KEY OFFER DETAILS

We are offering up to 2,000,000 shares at $1.00 each. The minimum total amount required to be raised under this offer is $200,000 (200,000 shares).

Shares issued through this crowdfunding will be non-voting ordinary shares, ranking equally with all other existing non-voting ordinary shares and carrying the rights listed below. Our nominee company, PayAid Nominee Shareholding Limited, will hold legal title to these shares on trust for investors under this offer.

1. The right to an equal share in dividends and other distributions made by PayAid Limited (subject to the rights of any other class of share).
2. The right to an equal share in the distribution of surplus assets of PayAid Limited. You can read more about the rights attached to shares in our Constitution.

VALUATION:

We have raised $210,000 from early investors and our advisors at $10,000,000 valuation earlier in 2022. Since then we have completed the app development and started live testing of the App. Our pre-money valuation of $20,420,000 has been created with the help of our advisors and the Equidam valuation platform. It is based on Scorecard, and Venture Capital valuation methods. The average of both methods has been used as pre-money valuation.

WHAT WE WILL DO WITH THE MONEY


If we only raise the minimum in this round, that will allow us to launch the app and operate for at least 3 months.
We’ll do most of the work in-house with help from our contractors. In this case, we will be raising more capital once the app is live to get the necessary lending capital.

If the maximum is raised, we’ll be able to do a full scale launch of the app as projected. In this scenario, we'll have a higher advertising & operational budget that will allow us to attract a higher number of users and operate according to our projections.

RETURNS

There are currently no dividends paid to shareholders, but once we hit profitability the Board will review this. Over the next few years, we plan to invest heavily in growth.

If shareholders do want to buy or sell shares, they can register interest with us, and we can manage the buying and selling of shares. We cannot guarantee that there will be buyers or sellers available.

 

Risks & Mitigations

RISKS HOW WE WILL MITIGATE THEM
API Services or Application issues We have sufficient backups and recovery procedures to restore the app in a timely manner.

Outsourced API services generate less control over potential downtime Close collaboration, periodical alignment meetings, and joint/integrated planning with API providers

Cash flow issues Plan well ahead, have good financial planning and, as far as possible, ensure the company is not underfunded. Potential future lending capital raises

Cyber attacks Partnering up with Amazon Web Services for cloud hosting to improve security

Customers who may not pay their financial obligations
Continuous analysis of users’ bank accounts before their next cash-out


Low brand awareness

Multiple marketing campaigns to increase exposure

Staffing Issues, failure to find employees If we fail to find specialised developers in NZ we will look for developers overseas

New direct competitor enters the market We will have the advantage of being present in the market first. We plan to continue working on our services to offer the best possible product

Business model that competitors can copy Continuous market research on client’s needs and constant R&D investment to add more features and products in the future

Potential litigation, claims

Insurance policy and Business Continuity strategy

 

Warning Statement

 

This document has been prepared by PayAid Limited. The purpose of this document is for information in relation to the PayAid Limited share offer on PledgeMe. All efforts have been made to ensure the accuracy and reliability of the content as of the date of this document. PledgeMe is licensed and regulated by the Financial Markets Authority, and the share offer made by PayAid Limited will only be available for acceptance through the PledgeMe website.

Equity crowdfunding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative
and carries high risks. You may lose your entire investment and must be in a position to bear this risk without undue hardship. 

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment. Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

A NOTE FROM PLEDGEME

We have completed Equifax checks on PayAid Limited and PayAid Nominee Shareholding Company Limited as well as their directors and beneficial owners. We have also completed Google and Insolvency checks and Enhanced Due Diligence on the company Directors as required. There were no adverse findings.

Updates 2

Campaign extension

01/07/2022 at 4:51 PM

After talking to some of our potential investors, we think 30 days may not be a sufficient amount of time to run our campaign as it will take longer for potential investors to go through it before they can make a decision. Hence, we have decided to extend our campaign from 30 to 90 days.

Information Memorandum Adjustment

28/06/2022 at 1:58 PM

We have received several questions so far, and they are all very helpful. Based on the comments we received from Ralph, we have made a minor adjustment to our Information memorandum. On page 33, under Assumptions - "The PledgeMe campaign successfully raises $2 million" changed to "The PledgeMe campaign successfully raises around $800,000". As we used the median raise figure in our calculations, that is around $800,000.

    Details

    Offer Details

    Current Valuation 20,420,000
    Raise Minimum 200,000
    Raise Maximum 2,000,000
    Share Price 1.00
    Minimum Pledge 500.00
    Maximum Shares Offered 2,000,000
    Explanation of valuation:

    We have raised $210,000 from early investors and our advisors at $10,000,000 valuation earlier in 2022. Since then we have completed the app development and started live testing of the App. Our pre-money valuation of $20,420,000 has been created with the help of our advisors and the Equidam valuation platform. It is based on Scorecard, Venture Capital valuation methods. The average of both methods has been used as pre-money valuation.

    Financial Summary

    Prev Year Current Year Est. FY 2024 Est. FY 2025
    Revenue NZ $0 NZ $0 NZ $1,323,699 NZ $5,025,904
    Operating Expenses -NZ $11,097 -NZ $25,500 -NZ $1,021,356 -NZ $1,844,096
    EBITDA -NZ $11,097 -NZ $25,500 NZ $26,724 NZ $2,675,965
    Net Profit -NZ $11,097 -NZ $25,500 NZ $16,216 NZ $1,915,210

    Company Details

    Company Name: PayAid Ltd

    Company Number: 8186661

    Company Documents

    Information_Memorandum_-_PayAid.pdf

    (application/pdf, 10.4 MB, uploaded 28 June 2022)

    Valuation_PayAid.pdf

    (application/pdf, 523 KB, uploaded 26 June 2022)

    PayAid_Shareholders_Agreement.pdf

    (application/pdf, 23.8 MB, uploaded 22 June 2022)

    PayAid_Ltd_Company_Constitution.docx.pdf

    (application/pdf, 158 KB, uploaded 19 June 2022)

    Nominee_Company_Constitution_PayAid_Nominee_Shareholding_Limited.docx.pdf

    (application/pdf, 157 KB, uploaded 19 June 2022)

    CertIncorporation_PayAid_8186661_13June2022.pdf

    (application/pdf, 588 KB, uploaded 13 June 2022)

    CoyExtract_PayAid_8186661_13June2022.pdf

    (application/pdf, 745 KB, uploaded 13 June 2022)

    Director Details

    Name Role Profile URL Invested?
    Laurie Chaplin Director https://pldg.me/PayAid-Directors
    Andrey Korzh Director https://pldg.me/PayAid-Directors

    Questions 12

    Ask a Question (You must login to ask a question)


    Hi team. Interested to know what value you are trying to provide to your customers with the budgeting tool within your product. It seems to be a feature that could compete with your business model and viability as a whole, with most budgets trying to help users off the pay-check to pay-check cycle.

    I'm a heavy user of YNAB, which seems to have a potentially similar feature set, from the mockups you are providing within your marketing materials. Their trademarked tagline is literally "Stop living paycheck-to-paycheck, get out of debt, and save more money™"

    Initial thoughts are that perhaps the budget feature was an "easy" add-on simply because your integration partner is already categorising each of the user's transactions. But have you taken into account the impact of providing these budgeting features? You don't want to help them break the paycheck cycle, you need to keep them coming back for more, right?

    Posted on 12-07-2022 by Andrew Humphries

    Hi Andrew, thank you for your question. And thank you for taking the time to read our information memorandum. As you have noticed, we decided to introduce a budgeting tool as part of our services after implementing the automatic categorisation of transactions.

    There are two main reasons for implementing a budgeting tool in our app. Our vision is not to exploit our users by trying to keep them in the debt cycle; instead, we are trying to create a solution that supports users in time when they need it the most. We believe that this approach will be favoured by users and lead to higher retention rates.

    Furthermore, the budgeting tool has an additional benefit to our business. If a user is already using our budgeting tool, they are more likely to use PayAid next time they need credit. To use the budgeting tool, they need to be registered and once the user is registered, getting an advance is convenient and almost instant. Hence the implementation of a budgeting tool was strategic to our business model.

    Answered on 18-07-2022 by Laurie Alec Chaplin


    Hi Laurie,

    Consumer credit is a highly regulated market, however the information memorandum is light on details regarding how PayAid will comply with the CCCFA and the associated Responsible Lending Code.

    Of particular interest is the requirement under Part 2 sub-part 6 of the CCCFA for fees to be closely linked with costs incurred in delivering the service. Additionally, the view adopted by the courts, and the Commerce Commission, in the Sportzone case made it clear fees can not contain any element of profit.

    Given the PayAid product does not charge interest, CCCFA compliance requires fees have no profit component, and there is no charge to the employer (in contrast to competing products like BNPL or PaySauce), how does PayAid generate its projected profit while maintaining compliance?

    Posted on 11-07-2022 by Andrew

    Hey Laurie,

    I have read quite a bit of your memorandum and work with start-ups myself. Everything is looking pretty solid. I am, however, wondering about how you plan to expand overseas? I understand that would have a massive impact on the potential future value of your company but could also lead to a collapse if done prematurely.

    Could you tell me a bit more about:

    1. How soon do you think you could expand overseas?
    2. How hard is it to expand? Have you done research on this yet?
    3. What will need to be in place for you to know you are ready?

    Posted on 07-07-2022 by Ben

    Hi Ben, thank you for your question.

    We don't have any immediate plans to expand overseas, however, once we are well established in the New Zealand market, we will consider launching our App in Australia, Canada UK and Parts of Europe.

    1. It will depend on how fast we can reach our market share in New Zealand. As you have mentioned above, it is a crucial step that could significantly increase the value of the company but needs to be done correctly and at the right time.
    2. We have done some research, and the most challenging part will be local regulations. Once we are ready to expand, more work and research will need to be done.
    3. Once we have achieved all our current goals in New Zealand and reached market capacity, we will be ready to expand overseas.

    Answered on 18-07-2022 by Laurie Alec Chaplin


    Hi Laurie,
    I think you mis understood my question, not sure if that is because of my poor phrasing or a bit of an Achilles heel in your business. You manage to generate some $1.3 m revenue in the first year based on a 5% return per lend from $2,000,000 shareholder investment this is pretty miraculous. Yes, you can loan that money multiple times, which was the point of the second half of my question.
    That entailed a person borrows $200 in Jan. He has to pay back before another borrowing ( your answer) say after 4 weeks at end of Jan . Then at start of Feb he borrows $200 again and pays back at end of Feb and so on during the year. This is not as you say borrowing $2,400 for the year but $ 200 at any one time and he has to repay $120 pa for holding $200 for (slightly) less than a year. Hence I believe your miraculous returns. Yet this is like any other payday loan system.
    Next going back to the arbitrage point. I am giving you money. On your model, you are making over $ 5m pa on my investment after 3 years but still don't talk about any return to shareholders over the next few years. Sure, initially, you want to put money back in to generate growth but once at $11.8m revenue and $5m plus profit I would have expected some kind of Shareholder return. The only comment is "the board would consider it "
    Great business for you, a no interest loan from me and no commitment to give me back any return even when the business is running over $5m profit on a $2m initial investment. Not expecting all back but at least a return on capital invested. Maybe you are not that confident of the 25/26 year figures?

    Posted on 05-07-2022 by Paul Steinkamp

    Hi Paul,

    Thanks for the question; generating $1.3m in revenue in the first year is quite doable. Our profit model works like this:

    We plan to have 30,000 users at the end of the first year and an average of 3.5 advances per user per year.

    3.5 X 30,000 = 105,896 total advances per year.
    105,896 X $250 = $26,473,980 pay advance amount per year
    $26,473,980 X 0.05 = $1,323,699 revenue

    This is a very simplified example of the conclusions gathered from our projections, as full projections are too complicated to display.

    PayAid system is based on low amount, short-term pay advances that are generally paid off in 1 to 2 pay cycles, hence the higher returns. PayAid utilises a simple, transparent fee structure that is quick and easy to use; this model has shown to be successful and popular with users in the USA and Australia.

    Regarding your second point, I am not sure what you mean by "arbitrage", as this is "exploiting a price difference across identical assets in different markets." As the last answer explains, this is simply not what we do. By investing, you benefit from owning part of the company. If we achieve our growth goals, the company will appreciate in value, and so will your shareholdings. Also, as it says in our IM, we plan on distributing dividends. But it will depend on how much we can raise, the amount of money we need for lending capital and the company's future growth. This is why we don't promise any firm figures or dates regarding dividends at this stage.

    Answered on 08-07-2022 by Laurie Alec Chaplin


    Let's assume you want to borrow $200 for a fortnight.

    If you get an ANZ low fee credit card with zero annual fees, and you do a cash advance. Interest rate is 20% and cash advance fee is 0. Total you pay back is $201.53.

    If you use PayAid you pay back $210. This is 6 times more expensive.

    Am I wrong or is this not usurious?

    Also I want to hear more about how much threat you see from PaySauce, given it's free and it's backed by a big bank.

    Posted on 30-06-2022 by Felix Lee

    Hi Felix, thank you for your question.

    We agree that there are multiple ways to approach finances, including credit cards. However, we position ourselves in a different category that is closer to Buy Now Pay Later (BNPL) and our research showed that more and more people are inclined to use BNPL services over credit cards. There is a number of differences between us and credit card companies, including fee structure, application time and eligibility. For instance, according to the ANZ website, if they already have an outstanding balance and take out a cash advance on your credit card, you will need to keep paying interest on it until the whole credit balance is paid off in full, which can be difficult for some people. In essence, we are trying to accommodate a specific market segment and that is why we use a fixed fee structure instead of being interest-based like Credit Cards.

    PaySauce is an indirect competitor that fills the same market needs as PayAid but operates quite differently. We include PaySauce in our IM because PaySauce was listed on NZX in 2018 and got support from ASB, which really shows the demand and potential of their service in the NZ market. The main difference is that to get a pay advance from PaySauce, users' employers must be registered and using their platform. PayAid allows anybody who meets our lending criteria to get a pay advance; this enables us to reach a much larger market. Moreover, at the end of the last financial year, PaySauce's customer base is around 6,000 after its acquisition of SmoothPay. Compared to roughly 560,000 registered companies (StatNZ), we can see that the majority of the market is untapped.

    There are other disadvantages to PaySauce in comparison to our service:
    - Users can only access the funds they have earned up to the day they get the advance, there is no credit.
    - Users can't pay off the advance over multiple cycles; all the funds are deducted from their next paycheck.

    Answered on 03-07-2022 by Laurie Alec Chaplin


    Hi There,
    Your whole plan is based on arbitrage as far as I can see, you borrow money and lend to people. What I don't see is the cost of that borrowing for you. Sure you show your average lend of $200-250 at 5% in revenue but where does your cost of money come into the equation? Your expenses do not show the cost of financing the loans as far as I can see.
    Also there is nothing in your risk profile about rising interest rates and instability in the financial markets. If the rates rise how will you sustain a 5% per lend model. I don't believe a survey of 20 people ( or maybe it was 40) is really a good survey to show price sensitivity or even really to test the whole concept.
    Lastly, your example uses a loan of $200 for a month with repayment of $210. If that were to happen for the individual every month he would be repaying over a year $120 for a $200 loan. That is an embarrassing APR. If he isn't then I suggest you need more than 30,00 users to make your revenue figures.
    Maybe you would like to comment on these observations?

    Posted on 30-06-2022 by Paul Steinkamp

    Hi Paul, and thank you for your question.

    Firstly, our business model is not based on arbitrage; as mentioned in our IM, we plan to use part of the funds raised through this crowdfunding as lending capital. With a reinvestment of profit over the next 2-3 years, we plant to be able to meet the demand. However, if we get to the point where the demand is so big that we do not have enough lending capital ourselves, we might approach NZ banks and get lending capital from them. Because the turnaround period for our pay advances is relatively short, any interest rate of the loan will be easily covered.

    Lastly, our pay advances have a fixed fee and can be repaid in 1-4 weeks. Within the repayment period, the user cannot take out another advance. In your example, if the individual is taking out a $200 advance every month, that would be $2,400 over a year, so he/she still only pays back a fixed 5% fee, while we earn $120. Under no circumstances will our customers have to pay back $120 on a $200 advance. Essentially, with the rotation of money, we will earn revenue but not at the expense of our customers. Our research of similar companies operating overseas (based on publicly available data) shows that, on average, the active user takes out 1.5 advances per month. We used publicly available data and adjusted for the NZ market in our projections.

    Answered on 03-07-2022 by Laurie Alec Chaplin


    Hey there, I really like your idea but I have some additional questions about your app,

    1. How will you retrieve the information that is required for you to calculate the cash-out limit and for the budgeting tool?
    2. You mentioned in your IM that the app is currently undergoing testing. What testing does the app need to be finished?
    3. When do you envision launching the app to the public?

    Posted on 28-06-2022 by William Holliday

    Hi William,
    Thank you for your feedback. Hopefully, this answers all your questions:

    1. We retrieve the information of users' income and expenses using Illion bank statement retrieval. This allows us to get a live feed of users’ expenses and income. The expenses are sorted into categories, groceries, rent, utilities, travel, etc. We then use these categories to perform our affordability calculations and the budgeting tool.

    2. At the moment, we are conducting live testing of the app. We can currently register and take out an advance. All planned features in our IM are working, although the app still needs a fair bit of polishing, particularly with the automated payments admin panel and the budgeting tool.

    3. We envision finishing testing and finalising backend development in Q3 2022. We are planning on the commercial launch of the app in Q1 2023

    Thank you for your questions. If you have any more, don’t hesitate to ask.

    Answered on 29-06-2022 by Laurie Alec Chaplin


    Hi Laurie, I accept that you do not know the amount that will be raised, but your information pack includes forecast P&L, based on "The PledgeMe campaign successfully raises $2 million" so surely you can include the $130k into the P&L on that basis?

    Posted on 27-06-2022 by Ralph Shale

    Hi Ralph,

    Thank you for your question.

    As mentioned in my previous answer, we have accounted for PledgeMe fee in our forecast and future cash flow. We agree that it could have been included in PnL 2022/2023

    Answered on 28-06-2022 by Laurie Alec Chaplin


    Can you advise how the Pledgeme Fee is accounted for? Based on a $2m raise the fee is going to be $150k, yet the 2023 P&L shows costs of $50k.

    Posted on 27-06-2022 by Ralph Shale

    Thank you for another question Ralph

    Our 6.5% success fee for PledgeMe has been accounted for in the forecast and future cash flow. However, because we do not know the exact amount that will be raised through PledgeMe that is not reflected on our 2022/2023 PnL.

    Answered on 27-06-2022 by Laurie Alec Chaplin


    Given that FinTech companies - especially Buy Now Pay Later have been hammered on stock exhanges around the world, how has this been factored into your valuation? I not that Laybuy which is listed on the ASX has a market valuation of circa NZ$13m, and it has revenues of close to $50m.

    Posted on 27-06-2022 by Ralph Shale

    Hi Ralph,

    Thank you very much for your question.

    We can not speculate on the performance of the financial markets or how it would affect our future operation, especially considering that we are still at an early stage.
    Equidam utilises publicly available data from other companies to help startups get valued as accurately as possible, even at an early stage. From our side, we have spent a significant amount of time during the last six months working on projections that went into creating our valuation. This is why we believe that our valuation reflects future possibilities for our product.

    Answered on 27-06-2022 by Laurie Alec Chaplin


    Hopefully this question gets answered

    Posted on 26-06-2022 by Marvin Lewis Mackey

    Hi Marvin, thank you for your interest. We have answered the question below.

    Answered on 27-06-2022 by Laurie Alec Chaplin


    I have a few questions.

    The I.M states you have raised $210,000 at a $10M valuation from "early investors and advisors earlier in 2022"

    1: How are you able to justify raising at double this valuation only months later?

    The only explanation of your valuation is:

    "Our pre-money valuation of $20,420,000 has been created with the help of our advisors and the Equidam valuation platform. It is based on Scorecard, Venture Capital valuation methods."

    2: How do you specifically derive your company valuation using these methods? I would like to see these calculations.

    Looking at the financials all I can see for FY 2021/22 and FY 2022/23 are losses of $261,097.

    On top of this there is $78,219 in liabilities to the company from outstanding business and shareholder loans. If I'm not mistaken this is a total net liability of $339,316. ($261,097+$78,219)

    Total assets are stated as $274,301 comprised of $122,693 as cash and $151,608 in intangible assets.

    By subtracting Total Net Liabilities from Total Net Assets this indicates the company currently has a Total Net Equity position of -$65,015.

    3: Given this, please can you clarify how you justify a $20.420M valuation?

    Note:

    The figures shown on the Financial Summary section on PledgeMe differs from the figures shown in the Financials section of the Information Memorandum.

    Shouldn’t the Financial Summary section on PledgeMe be updated to reflect what is also shown in the Information Memorandum?

    It states a Net Profit of -$25,500 on the Financial Summary section, but states a Net Profit of -$250,000 in the Information Memorandum for the FY 2022/23.

    Posted on 25-06-2022 by Tim

    Hi Tim,

    Thank you very much for taking the time to read through our information memorandum and putting together your questions.

    1. For our early investors we offered a special share price based on an agreed valuation of $10,000,000. This was based on our early investors being either involved with PayAid from very early stages or bringing the expertise and experience necessary for us to get to the stage we are at today. Thanks to their expertise, we were able to plan our resources more efficiently and accelerate our development.

    One other reason why we have a higher valuation now compared to the early/angel investment stage is that our app is now finished and available in Testflight for App Store and in Google Play Console for Android (undergoing testing). This has confirmed that we are able to develop the necessary technology.

    We have taken your request into consideration and have added our full valuation to our PledgeMe page.

    2. For the calculations, it looks like you are using our projected expenses in the net liability, which is not quite right. Below are our calculations for our net equity position.

    Net Equity = Current assets - Total liability - Inventory

    As stated, our current assets equal $122,963 and our total liabilities equal $78,219. As we don’t have any inventory, our net equity would be $44,474.

    If you are interested in our equity position as well, we have calculated that below.

    Equity = Total assets - Total liability

    Our total assets are $274,301 which means our equity is $196,082

    - There are a few reasons why the $250,000 expense you mentioned is not included in this calculations:
    The balance sheet is produced on a specific date (in this case: 30/5/2022). Hence, the current asset is as of 30/5/2022, whereas the -$250,000 expenses you see are our projection for the full financial year 2022/2023. As these two numbers are from different points in time, they shouldn’t be used together to find the Net equity. Up to now, in the financial year 2022/2023, we have only spent $25,500 of this $250,000 estimation.

    - Not all of these expenses would go into liabilities as we would pay them off using cash earned from our projected revenues. Moreover, some of these expenses will go into buying equipment for our office and app development and will become a part of our assets.

    - If a portion of projected expenses were included in calculating potential Net equity, then estimated revenues should also be considered in such a calculation.

    3. The company's net equity tells you how burdened it is with debt compared to the value of the assets. Evidently, our Net equity is positive, meaning we can well cover our debt with our cash holdings. Essentially, it reflects the financial health of the company and therefore, doesn’t show a complete picture of a company's value. This is because Net equity doesn’t take into account other factors such as our potential earnings and human capital.

    To reflect our potential as a pre-revenue company, we used a projected financial forecast to generate a valuation using Equidam. We chose two different valuation methods, scorecards and venture capital. You can read more about these two methods in the valuation report we have now uploaded. Our financial forecast was based on numbers from comparable companies overseas and adjusted for the New Zealand market. (You can read more about this in our Profit & Loss Assumptions)

    Reply to your note:

    The figures in the Financial Summary on PledgeMe are current figures(so far into this financial year) for FY 2022/2023 while in our memorandum these are predicted figures to give the reader an understanding of our expected profit for the full financial year.

    We agree that we could have added “est” on top of the columns in our memorandum to reflect this clearer.

    Thanks again for taking the time to read our information memorandum and putting together these questions. If you have any more don’t hesitate to ask.

    Answered on 27-06-2022 by Laurie Alec Chaplin

    Pledgers 18

    Geoff Tobeck
    2022-08-04 09:53:59 +1200
    Mike
    2022-07-30 14:02:32 +1200
    Claire McGowan
    2022-07-30 03:32:42 +1200
    Joshua
    2022-07-19 09:24:16 +1200
    Julia Wilson
    2022-07-16 13:14:36 +1200
    Simon Paris
    2022-07-10 20:47:40 +1200
    Devina hussain
    2022-07-10 20:18:48 +1200
    Reshad Hussain
    2022-07-05 21:18:00 +1200
    Joanne mellis
    2022-07-04 12:17:27 +1200

    "Looking forewords to great thing with you. good luck"

    Pablo Jr
    2022-07-03 18:27:48 +1200
    Frida Sumardjo
    2022-06-30 11:50:48 +1200
    Danielle Auld
    2022-06-30 09:58:48 +1200
    Dope Honey Limited
    2022-06-29 14:16:47 +1200
    Paul Lambert
    2022-06-28 09:48:27 +1200
    Nicholas Walshe
    2022-06-27 12:39:35 +1200
    Marvin Lewis Mackey
    2022-06-25 08:28:21 +1200
    Cuong Tran
    2022-06-24 12:43:26 +1200
    Otto
    2022-06-24 12:26:53 +1200

    PayAid

    How PayAid was born

    PayAid was created to disrupt New Zealand’s short-term lending scene, which, in our opinion, is outdated, inefficient and lacks innovation. Most traditional payday loan providers charge compounding interest rates. Together with layers of fees (such as late payment fees, establishment fees, extension fees, etc.), these old-school practices make it difficult for customers to get out of the debt cycle, especially for those living from paycheck to paycheck.


    Our solution

    PayAid is introducing an innovative, lower-cost financing solution to New Zealand. PayAid provides Kiwis with early access to a portion of their salary (pay advance) right from their phones. All this at a fixed fee of 5% per advance and no other hidden or late fees. When you get $100 from us you only repay $105 - nothing more.


    Our straightforward process takes only a few minutes to complete and is paperless. Once the user has finished the sign-up process on the app - which takes about five minutes - we will calculate the user's advance limit and pay the chosen amount to their bank account.


    PayAid is also a budgeting app that helps customers effectively manage expenses by understanding where their money is spent. A customer can allocate their budget to different expense categories and our algorithm will automatically update their budget as they spend. Our app will send them a notification when they are about to exceed their budget, allowing our customers to make better financial decisions.

     

    Our vision

    With our innovative approach to personal finance, PayAid aims to be the preferred choice for pay advance services, helping Kiwis manage their finances with ease.

    Company overview

    PayAid is planning to offer its consumers a better way to manage their finances by providing an alternative version of consumer credit that breaks away from traditional financial practices. PayAid is designed to provide its customers with pay advance services that allow them to get immediate access to a portion of their upcoming salary without having to rely on credit cards or other forms of debt.

    PayAid approaches consumer credit in an alternative way, offering our users:

    Short-term pay advance services, designed to give the consumer breathing room until their next payday or to fulfil urgent needs.

     
    A straightforward, automated application process through a mobile application to allow customers an effortless way to receive a pay advance.

     
    A simple, transparent fee structure of a fixed one-time charge, no late fees and no interest.

     
    Budgeting tools to provide the customer with financial insights, allowing them to save and spend smarter.

     
    Affordability assessment of each advance, using algorithms to compare the customer expense to their income. this ensures they never get more credit than they can afford.  

     


    PayAid is primarily designed to support people who live from paycheck to paycheck or need some extra cash. We are committed to designing a business model that is easy to use and has a fair approach to finance.

     

     

    Revenue model

    PayAid plans to generate its revenue through customer fees. PayAid will provide its customers with access to a portion of their pay in advance (Pay Advance Service) for a fixed 5% transaction fee on the total advance. There will be no interest, no late fees, and no hidden charges. We estimate that $200-250 will be the average cash out amount.

    Our product

    The ID process only takes place at the registration. The returning customers do not have to prove their identity again, meaning they can cash out faster. However, if a user has been inactive for more than 30 days, they will need to reconnect their bank account.


    Customer eligibility

    Once the App is publicly available, the users wishing to use our service will have to meet eligibility criteria. The user must:

    Be a New Zealand citizen or resident or hold a valid work visa

    Have work income in their bank account of at least $450 per week

    Have a New Zealand Drivers Licence or Passport

    Be over 18 years of age

     

     

    Use case

    PayAid service has a broad use case. Customers can use their advance for any purpose as the funds are deposited directly into their bank accounts. 

    Unlike Buy Now Pay Later services, which tie the customer’s funds to specific purchases, PayAid gives the customer freedom to use their funds however they see fit, whether it is for rent, holiday shopping or utility bills.

     


    Benefits

    According to our preliminary market research, in which we interviewed 20 potential customers, the most appealing attributes of our service are highlighted below:

    Ease-of-use and speed: users register on their mobiles and get approved in seconds. 

    Innovativeness: the budgeting tool is an attractive bonus point

    Affordability: 5% transaction fee is manageable 

    Flexibility: users can spend money on whatever they need 

     

    Technology overview

     

    PayAid has created a solution by combining our proprietary technology and several APIs from our providers, seeking to simplify and improve Kiwis’ access to credit.

    Our easy and seamless sign-up process is the key attribute helping us appeal to a wide demographic. PayAid is designed to be as automated as possible to reduce the time and hassle of retrieving credit.

    To achieve this, we selectively outsource certain functions where it is cost-effective, such as bank statement retrieval, ID verification, and direct debit application.

     

    We have developed four core pieces of technology for the App:

     

    Seamless verification: API integration allows us to instantly retrieve a user’s bank statement and check their provided ID against the government databases. By doing so, PayAid can offer a user-friendly experience while maintaining its low prices.

    Pay cycle detection: our algorithm detects when the user gets paid, aligns the repayment schedule with the paycheck to make it easier for the customer to repay, and lowers the chance of debit failure.

    Expense categories: user’s expenses are sorted into 20 categories, e.g. groceries, rent, utilities, travel. We then use these categories in the affordability calculator and the budgeting tool.

    Affordability calculator: using data points we calculate users average spending on the necessities (rent, utilities, groceries, transportation). Then, to find the maximum cash out limit we compare the average essential expenses to their salary. PayAid retrieves this information using Illion bank statement retrieval.

     

     

    What we have achieved

    Even before COVID-19, we observed that people in New Zealand were struggling to get affordable credit. Unfortunately, the pandemic didn’t make the situation any better.

    One article from Finder captured our attention, stating that one out of three Kiwis is living paycheque to paycheque. Surprisingly, an initial search showed no current credit providers in New Zealand offering affordable and accessible solutions.

    The idea of bringing a straightforward, flat-rate pay advance service to New Zealand was born. We then started developing a business model, and in June 2021, we established PayAid Ltd.

    Since then, we have self-funded and received private investment for research, development, branding, office rental and legal fees.

    Future Milestones
    Some of the upcoming milestones we are looking forward to are:


    Market Size

     

    After comparing the target market profile to our criteria for customer eligibility, we calculate the total number of potential customers to be 511,000. Early adopters must be likely to try new technology and have a stable income from a job. Those with personal income between $20,000 - $70,000 are most likely to use our service.


    Those who earn less might not be eligible, while those who make more might not require our service. Additionally, those who live in more populated areas are more likely to learn of our service due to the marketing exposure.


    We use data from similar services in Australia to determine our penetration rate.


    As of November 2021, 8% of Australians, specifically 22% of Gen Z and 11% of Millennials, have used pay-on-demand services at least once.


    Considering that pay-on-demand was introduced in Australia around 2019 & that PayAid will have the first-mover advantage, we estimate the penetration rate for PayAid in the first year to be 4% - 6% of the target market.


    Thus, our expected market volume in the first year is approximately 20,000 - 30,000 active users.

    Our team

    Advisors

     

     

    Offer

    WHY WE ARE CROWDFUNDING

    When you build a product for the people, it only makes sense that it's the people that get an opportunity to invest and be a part of the success.

    We genuinely believe that PayAid is a service that will help the people of New Zealand. No one should ever feel stuck when they need money, not when they have a job and work hard.

    So as we raise our funding round, we want to do so with a public crowdfunding campaign instead of private investment money. Unlike traditional investing, public crowdfunding means that anyone can be involved, rather than only a few wealthy individuals.

     

    We're raising a minimum of $200,000 and a maximum of $2,000,000 and eligible investors can get involved for as little as $500.

    KEY OFFER DETAILS

    We are offering up to 2,000,000 shares at $1.00 each. The minimum total amount required to be raised under this offer is $200,000 (200,000 shares).

    Shares issued through this crowdfunding will be non-voting ordinary shares, ranking equally with all other existing non-voting ordinary shares and carrying the rights listed below. Our nominee company, PayAid Nominee Shareholding Limited, will hold legal title to these shares on trust for investors under this offer.

    1. The right to an equal share in dividends and other distributions made by PayAid Limited (subject to the rights of any other class of share).
    2. The right to an equal share in the distribution of surplus assets of PayAid Limited. You can read more about the rights attached to shares in our Constitution.

    VALUATION:

    We have raised $210,000 from early investors and our advisors at $10,000,000 valuation earlier in 2022. Since then we have completed the app development and started live testing of the App. Our pre-money valuation of $20,420,000 has been created with the help of our advisors and the Equidam valuation platform. It is based on Scorecard, and Venture Capital valuation methods. The average of both methods has been used as pre-money valuation.

    WHAT WE WILL DO WITH THE MONEY


    If we only raise the minimum in this round, that will allow us to launch the app and operate for at least 3 months.
    We’ll do most of the work in-house with help from our contractors. In this case, we will be raising more capital once the app is live to get the necessary lending capital.

    If the maximum is raised, we’ll be able to do a full scale launch of the app as projected. In this scenario, we'll have a higher advertising & operational budget that will allow us to attract a higher number of users and operate according to our projections.

    RETURNS

    There are currently no dividends paid to shareholders, but once we hit profitability the Board will review this. Over the next few years, we plan to invest heavily in growth.

    If shareholders do want to buy or sell shares, they can register interest with us, and we can manage the buying and selling of shares. We cannot guarantee that there will be buyers or sellers available.

     

    Risks & Mitigations

    RISKS HOW WE WILL MITIGATE THEM
    API Services or Application issues We have sufficient backups and recovery procedures to restore the app in a timely manner.

    Outsourced API services generate less control over potential downtime Close collaboration, periodical alignment meetings, and joint/integrated planning with API providers

    Cash flow issues Plan well ahead, have good financial planning and, as far as possible, ensure the company is not underfunded. Potential future lending capital raises

    Cyber attacks Partnering up with Amazon Web Services for cloud hosting to improve security

    Customers who may not pay their financial obligations
    Continuous analysis of users’ bank accounts before their next cash-out


    Low brand awareness

    Multiple marketing campaigns to increase exposure

    Staffing Issues, failure to find employees If we fail to find specialised developers in NZ we will look for developers overseas

    New direct competitor enters the market We will have the advantage of being present in the market first. We plan to continue working on our services to offer the best possible product

    Business model that competitors can copy Continuous market research on client’s needs and constant R&D investment to add more features and products in the future

    Potential litigation, claims

    Insurance policy and Business Continuity strategy

     

    Warning Statement

     

    This document has been prepared by PayAid Limited. The purpose of this document is for information in relation to the PayAid Limited share offer on PledgeMe. All efforts have been made to ensure the accuracy and reliability of the content as of the date of this document. PledgeMe is licensed and regulated by the Financial Markets Authority, and the share offer made by PayAid Limited will only be available for acceptance through the PledgeMe website.

    Equity crowdfunding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative
    and carries high risks. You may lose your entire investment and must be in a position to bear this risk without undue hardship. 

    New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment. Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

    A NOTE FROM PLEDGEME

    We have completed Equifax checks on PayAid Limited and PayAid Nominee Shareholding Company Limited as well as their directors and beneficial owners. We have also completed Google and Insolvency checks and Enhanced Due Diligence on the company Directors as required. There were no adverse findings.

    Campaign extension

    01/07/2022 at 4:51 PM

    After talking to some of our potential investors, we think 30 days may not be a sufficient amount of time to run our campaign as it will take longer for potential investors to go through it before they can make a decision. Hence, we have decided to extend our campaign from 30 to 90 days.

    Information Memorandum Adjustment

    28/06/2022 at 1:58 PM

    We have received several questions so far, and they are all very helpful. Based on the comments we received from Ralph, we have made a minor adjustment to our Information memorandum. On page 33, under Assumptions - "The PledgeMe campaign successfully raises $2 million" changed to "The PledgeMe campaign successfully raises around $800,000". As we used the median raise figure in our calculations, that is around $800,000.

      Offer Details

      Current Valuation 20,420,000
      Raise Minimum 200,000
      Raise Maximum 2,000,000
      Share Price 1.00
      Minimum Pledge 500.00
      Maximum Shares Offered 2,000,000
      Explanation of valuation:

      We have raised $210,000 from early investors and our advisors at $10,000,000 valuation earlier in 2022. Since then we have completed the app development and started live testing of the App. Our pre-money valuation of $20,420,000 has been created with the help of our advisors and the Equidam valuation platform. It is based on Scorecard, Venture Capital valuation methods. The average of both methods has been used as pre-money valuation.

      Financial Summary

      Prev Year Current Year Est. FY 2024 Est. FY 2025
      Revenue NZ $0 NZ $0 NZ $1,323,699 NZ $5,025,904
      Operating Expenses -NZ $11,097 -NZ $25,500 -NZ $1,021,356 -NZ $1,844,096
      EBITDA -NZ $11,097 -NZ $25,500 NZ $26,724 NZ $2,675,965
      Net Profit -NZ $11,097 -NZ $25,500 NZ $16,216 NZ $1,915,210

      Company Details

      Company Name: PayAid Ltd

      Company Number: 8186661

      Company Documents

      Information_Memorandum_-_PayAid.pdf

      (application/pdf, 10.4 MB, uploaded 28 June 2022)

      Valuation_PayAid.pdf

      (application/pdf, 523 KB, uploaded 26 June 2022)

      PayAid_Shareholders_Agreement.pdf

      (application/pdf, 23.8 MB, uploaded 22 June 2022)

      PayAid_Ltd_Company_Constitution.docx.pdf

      (application/pdf, 158 KB, uploaded 19 June 2022)

      Nominee_Company_Constitution_PayAid_Nominee_Shareholding_Limited.docx.pdf

      (application/pdf, 157 KB, uploaded 19 June 2022)

      CertIncorporation_PayAid_8186661_13June2022.pdf

      (application/pdf, 588 KB, uploaded 13 June 2022)

      CoyExtract_PayAid_8186661_13June2022.pdf

      (application/pdf, 745 KB, uploaded 13 June 2022)

      Director Details

      Name Role Profile URL Invested?
      Laurie Chaplin Director https://pldg.me/PayAid-Directors
      Andrey Korzh Director https://pldg.me/PayAid-Directors

      Ask a Question (You must login to ask a question)


      Hi team. Interested to know what value you are trying to provide to your customers with the budgeting tool within your product. It seems to be a feature that could compete with your business model and viability as a whole, with most budgets trying to help users off the pay-check to pay-check cycle.

      I'm a heavy user of YNAB, which seems to have a potentially similar feature set, from the mockups you are providing within your marketing materials. Their trademarked tagline is literally "Stop living paycheck-to-paycheck, get out of debt, and save more money™"

      Initial thoughts are that perhaps the budget feature was an "easy" add-on simply because your integration partner is already categorising each of the user's transactions. But have you taken into account the impact of providing these budgeting features? You don't want to help them break the paycheck cycle, you need to keep them coming back for more, right?

      Posted on 12-07-2022 by Andrew Humphries

      Hi Andrew, thank you for your question. And thank you for taking the time to read our information memorandum. As you have noticed, we decided to introduce a budgeting tool as part of our services after implementing the automatic categorisation of transactions.

      There are two main reasons for implementing a budgeting tool in our app. Our vision is not to exploit our users by trying to keep them in the debt cycle; instead, we are trying to create a solution that supports users in time when they need it the most. We believe that this approach will be favoured by users and lead to higher retention rates.

      Furthermore, the budgeting tool has an additional benefit to our business. If a user is already using our budgeting tool, they are more likely to use PayAid next time they need credit. To use the budgeting tool, they need to be registered and once the user is registered, getting an advance is convenient and almost instant. Hence the implementation of a budgeting tool was strategic to our business model.

      Answered on 18-07-2022 by Laurie Alec Chaplin


      Hi Laurie,

      Consumer credit is a highly regulated market, however the information memorandum is light on details regarding how PayAid will comply with the CCCFA and the associated Responsible Lending Code.

      Of particular interest is the requirement under Part 2 sub-part 6 of the CCCFA for fees to be closely linked with costs incurred in delivering the service. Additionally, the view adopted by the courts, and the Commerce Commission, in the Sportzone case made it clear fees can not contain any element of profit.

      Given the PayAid product does not charge interest, CCCFA compliance requires fees have no profit component, and there is no charge to the employer (in contrast to competing products like BNPL or PaySauce), how does PayAid generate its projected profit while maintaining compliance?

      Posted on 11-07-2022 by Andrew

      Hey Laurie,

      I have read quite a bit of your memorandum and work with start-ups myself. Everything is looking pretty solid. I am, however, wondering about how you plan to expand overseas? I understand that would have a massive impact on the potential future value of your company but could also lead to a collapse if done prematurely.

      Could you tell me a bit more about:

      1. How soon do you think you could expand overseas?
      2. How hard is it to expand? Have you done research on this yet?
      3. What will need to be in place for you to know you are ready?

      Posted on 07-07-2022 by Ben

      Hi Ben, thank you for your question.

      We don't have any immediate plans to expand overseas, however, once we are well established in the New Zealand market, we will consider launching our App in Australia, Canada UK and Parts of Europe.

      1. It will depend on how fast we can reach our market share in New Zealand. As you have mentioned above, it is a crucial step that could significantly increase the value of the company but needs to be done correctly and at the right time.
      2. We have done some research, and the most challenging part will be local regulations. Once we are ready to expand, more work and research will need to be done.
      3. Once we have achieved all our current goals in New Zealand and reached market capacity, we will be ready to expand overseas.

      Answered on 18-07-2022 by Laurie Alec Chaplin


      Hi Laurie,
      I think you mis understood my question, not sure if that is because of my poor phrasing or a bit of an Achilles heel in your business. You manage to generate some $1.3 m revenue in the first year based on a 5% return per lend from $2,000,000 shareholder investment this is pretty miraculous. Yes, you can loan that money multiple times, which was the point of the second half of my question.
      That entailed a person borrows $200 in Jan. He has to pay back before another borrowing ( your answer) say after 4 weeks at end of Jan . Then at start of Feb he borrows $200 again and pays back at end of Feb and so on during the year. This is not as you say borrowing $2,400 for the year but $ 200 at any one time and he has to repay $120 pa for holding $200 for (slightly) less than a year. Hence I believe your miraculous returns. Yet this is like any other payday loan system.
      Next going back to the arbitrage point. I am giving you money. On your model, you are making over $ 5m pa on my investment after 3 years but still don't talk about any return to shareholders over the next few years. Sure, initially, you want to put money back in to generate growth but once at $11.8m revenue and $5m plus profit I would have expected some kind of Shareholder return. The only comment is "the board would consider it "
      Great business for you, a no interest loan from me and no commitment to give me back any return even when the business is running over $5m profit on a $2m initial investment. Not expecting all back but at least a return on capital invested. Maybe you are not that confident of the 25/26 year figures?

      Posted on 05-07-2022 by Paul Steinkamp

      Hi Paul,

      Thanks for the question; generating $1.3m in revenue in the first year is quite doable. Our profit model works like this:

      We plan to have 30,000 users at the end of the first year and an average of 3.5 advances per user per year.

      3.5 X 30,000 = 105,896 total advances per year.
      105,896 X $250 = $26,473,980 pay advance amount per year
      $26,473,980 X 0.05 = $1,323,699 revenue

      This is a very simplified example of the conclusions gathered from our projections, as full projections are too complicated to display.

      PayAid system is based on low amount, short-term pay advances that are generally paid off in 1 to 2 pay cycles, hence the higher returns. PayAid utilises a simple, transparent fee structure that is quick and easy to use; this model has shown to be successful and popular with users in the USA and Australia.

      Regarding your second point, I am not sure what you mean by "arbitrage", as this is "exploiting a price difference across identical assets in different markets." As the last answer explains, this is simply not what we do. By investing, you benefit from owning part of the company. If we achieve our growth goals, the company will appreciate in value, and so will your shareholdings. Also, as it says in our IM, we plan on distributing dividends. But it will depend on how much we can raise, the amount of money we need for lending capital and the company's future growth. This is why we don't promise any firm figures or dates regarding dividends at this stage.

      Answered on 08-07-2022 by Laurie Alec Chaplin


      Let's assume you want to borrow $200 for a fortnight.

      If you get an ANZ low fee credit card with zero annual fees, and you do a cash advance. Interest rate is 20% and cash advance fee is 0. Total you pay back is $201.53.

      If you use PayAid you pay back $210. This is 6 times more expensive.

      Am I wrong or is this not usurious?

      Also I want to hear more about how much threat you see from PaySauce, given it's free and it's backed by a big bank.

      Posted on 30-06-2022 by Felix Lee

      Hi Felix, thank you for your question.

      We agree that there are multiple ways to approach finances, including credit cards. However, we position ourselves in a different category that is closer to Buy Now Pay Later (BNPL) and our research showed that more and more people are inclined to use BNPL services over credit cards. There is a number of differences between us and credit card companies, including fee structure, application time and eligibility. For instance, according to the ANZ website, if they already have an outstanding balance and take out a cash advance on your credit card, you will need to keep paying interest on it until the whole credit balance is paid off in full, which can be difficult for some people. In essence, we are trying to accommodate a specific market segment and that is why we use a fixed fee structure instead of being interest-based like Credit Cards.

      PaySauce is an indirect competitor that fills the same market needs as PayAid but operates quite differently. We include PaySauce in our IM because PaySauce was listed on NZX in 2018 and got support from ASB, which really shows the demand and potential of their service in the NZ market. The main difference is that to get a pay advance from PaySauce, users' employers must be registered and using their platform. PayAid allows anybody who meets our lending criteria to get a pay advance; this enables us to reach a much larger market. Moreover, at the end of the last financial year, PaySauce's customer base is around 6,000 after its acquisition of SmoothPay. Compared to roughly 560,000 registered companies (StatNZ), we can see that the majority of the market is untapped.

      There are other disadvantages to PaySauce in comparison to our service:
      - Users can only access the funds they have earned up to the day they get the advance, there is no credit.
      - Users can't pay off the advance over multiple cycles; all the funds are deducted from their next paycheck.

      Answered on 03-07-2022 by Laurie Alec Chaplin


      Hi There,
      Your whole plan is based on arbitrage as far as I can see, you borrow money and lend to people. What I don't see is the cost of that borrowing for you. Sure you show your average lend of $200-250 at 5% in revenue but where does your cost of money come into the equation? Your expenses do not show the cost of financing the loans as far as I can see.
      Also there is nothing in your risk profile about rising interest rates and instability in the financial markets. If the rates rise how will you sustain a 5% per lend model. I don't believe a survey of 20 people ( or maybe it was 40) is really a good survey to show price sensitivity or even really to test the whole concept.
      Lastly, your example uses a loan of $200 for a month with repayment of $210. If that were to happen for the individual every month he would be repaying over a year $120 for a $200 loan. That is an embarrassing APR. If he isn't then I suggest you need more than 30,00 users to make your revenue figures.
      Maybe you would like to comment on these observations?

      Posted on 30-06-2022 by Paul Steinkamp

      Hi Paul, and thank you for your question.

      Firstly, our business model is not based on arbitrage; as mentioned in our IM, we plan to use part of the funds raised through this crowdfunding as lending capital. With a reinvestment of profit over the next 2-3 years, we plant to be able to meet the demand. However, if we get to the point where the demand is so big that we do not have enough lending capital ourselves, we might approach NZ banks and get lending capital from them. Because the turnaround period for our pay advances is relatively short, any interest rate of the loan will be easily covered.

      Lastly, our pay advances have a fixed fee and can be repaid in 1-4 weeks. Within the repayment period, the user cannot take out another advance. In your example, if the individual is taking out a $200 advance every month, that would be $2,400 over a year, so he/she still only pays back a fixed 5% fee, while we earn $120. Under no circumstances will our customers have to pay back $120 on a $200 advance. Essentially, with the rotation of money, we will earn revenue but not at the expense of our customers. Our research of similar companies operating overseas (based on publicly available data) shows that, on average, the active user takes out 1.5 advances per month. We used publicly available data and adjusted for the NZ market in our projections.

      Answered on 03-07-2022 by Laurie Alec Chaplin


      Hey there, I really like your idea but I have some additional questions about your app,

      1. How will you retrieve the information that is required for you to calculate the cash-out limit and for the budgeting tool?
      2. You mentioned in your IM that the app is currently undergoing testing. What testing does the app need to be finished?
      3. When do you envision launching the app to the public?

      Posted on 28-06-2022 by William Holliday

      Hi William,
      Thank you for your feedback. Hopefully, this answers all your questions:

      1. We retrieve the information of users' income and expenses using Illion bank statement retrieval. This allows us to get a live feed of users’ expenses and income. The expenses are sorted into categories, groceries, rent, utilities, travel, etc. We then use these categories to perform our affordability calculations and the budgeting tool.

      2. At the moment, we are conducting live testing of the app. We can currently register and take out an advance. All planned features in our IM are working, although the app still needs a fair bit of polishing, particularly with the automated payments admin panel and the budgeting tool.

      3. We envision finishing testing and finalising backend development in Q3 2022. We are planning on the commercial launch of the app in Q1 2023

      Thank you for your questions. If you have any more, don’t hesitate to ask.

      Answered on 29-06-2022 by Laurie Alec Chaplin


      Hi Laurie, I accept that you do not know the amount that will be raised, but your information pack includes forecast P&L, based on "The PledgeMe campaign successfully raises $2 million" so surely you can include the $130k into the P&L on that basis?

      Posted on 27-06-2022 by Ralph Shale

      Hi Ralph,

      Thank you for your question.

      As mentioned in my previous answer, we have accounted for PledgeMe fee in our forecast and future cash flow. We agree that it could have been included in PnL 2022/2023

      Answered on 28-06-2022 by Laurie Alec Chaplin


      Can you advise how the Pledgeme Fee is accounted for? Based on a $2m raise the fee is going to be $150k, yet the 2023 P&L shows costs of $50k.

      Posted on 27-06-2022 by Ralph Shale

      Thank you for another question Ralph

      Our 6.5% success fee for PledgeMe has been accounted for in the forecast and future cash flow. However, because we do not know the exact amount that will be raised through PledgeMe that is not reflected on our 2022/2023 PnL.

      Answered on 27-06-2022 by Laurie Alec Chaplin


      Given that FinTech companies - especially Buy Now Pay Later have been hammered on stock exhanges around the world, how has this been factored into your valuation? I not that Laybuy which is listed on the ASX has a market valuation of circa NZ$13m, and it has revenues of close to $50m.

      Posted on 27-06-2022 by Ralph Shale

      Hi Ralph,

      Thank you very much for your question.

      We can not speculate on the performance of the financial markets or how it would affect our future operation, especially considering that we are still at an early stage.
      Equidam utilises publicly available data from other companies to help startups get valued as accurately as possible, even at an early stage. From our side, we have spent a significant amount of time during the last six months working on projections that went into creating our valuation. This is why we believe that our valuation reflects future possibilities for our product.

      Answered on 27-06-2022 by Laurie Alec Chaplin


      Hopefully this question gets answered

      Posted on 26-06-2022 by Marvin Lewis Mackey

      Hi Marvin, thank you for your interest. We have answered the question below.

      Answered on 27-06-2022 by Laurie Alec Chaplin


      I have a few questions.

      The I.M states you have raised $210,000 at a $10M valuation from "early investors and advisors earlier in 2022"

      1: How are you able to justify raising at double this valuation only months later?

      The only explanation of your valuation is:

      "Our pre-money valuation of $20,420,000 has been created with the help of our advisors and the Equidam valuation platform. It is based on Scorecard, Venture Capital valuation methods."

      2: How do you specifically derive your company valuation using these methods? I would like to see these calculations.

      Looking at the financials all I can see for FY 2021/22 and FY 2022/23 are losses of $261,097.

      On top of this there is $78,219 in liabilities to the company from outstanding business and shareholder loans. If I'm not mistaken this is a total net liability of $339,316. ($261,097+$78,219)

      Total assets are stated as $274,301 comprised of $122,693 as cash and $151,608 in intangible assets.

      By subtracting Total Net Liabilities from Total Net Assets this indicates the company currently has a Total Net Equity position of -$65,015.

      3: Given this, please can you clarify how you justify a $20.420M valuation?

      Note:

      The figures shown on the Financial Summary section on PledgeMe differs from the figures shown in the Financials section of the Information Memorandum.

      Shouldn’t the Financial Summary section on PledgeMe be updated to reflect what is also shown in the Information Memorandum?

      It states a Net Profit of -$25,500 on the Financial Summary section, but states a Net Profit of -$250,000 in the Information Memorandum for the FY 2022/23.

      Posted on 25-06-2022 by Tim

      Hi Tim,

      Thank you very much for taking the time to read through our information memorandum and putting together your questions.

      1. For our early investors we offered a special share price based on an agreed valuation of $10,000,000. This was based on our early investors being either involved with PayAid from very early stages or bringing the expertise and experience necessary for us to get to the stage we are at today. Thanks to their expertise, we were able to plan our resources more efficiently and accelerate our development.

      One other reason why we have a higher valuation now compared to the early/angel investment stage is that our app is now finished and available in Testflight for App Store and in Google Play Console for Android (undergoing testing). This has confirmed that we are able to develop the necessary technology.

      We have taken your request into consideration and have added our full valuation to our PledgeMe page.

      2. For the calculations, it looks like you are using our projected expenses in the net liability, which is not quite right. Below are our calculations for our net equity position.

      Net Equity = Current assets - Total liability - Inventory

      As stated, our current assets equal $122,963 and our total liabilities equal $78,219. As we don’t have any inventory, our net equity would be $44,474.

      If you are interested in our equity position as well, we have calculated that below.

      Equity = Total assets - Total liability

      Our total assets are $274,301 which means our equity is $196,082

      - There are a few reasons why the $250,000 expense you mentioned is not included in this calculations:
      The balance sheet is produced on a specific date (in this case: 30/5/2022). Hence, the current asset is as of 30/5/2022, whereas the -$250,000 expenses you see are our projection for the full financial year 2022/2023. As these two numbers are from different points in time, they shouldn’t be used together to find the Net equity. Up to now, in the financial year 2022/2023, we have only spent $25,500 of this $250,000 estimation.

      - Not all of these expenses would go into liabilities as we would pay them off using cash earned from our projected revenues. Moreover, some of these expenses will go into buying equipment for our office and app development and will become a part of our assets.

      - If a portion of projected expenses were included in calculating potential Net equity, then estimated revenues should also be considered in such a calculation.

      3. The company's net equity tells you how burdened it is with debt compared to the value of the assets. Evidently, our Net equity is positive, meaning we can well cover our debt with our cash holdings. Essentially, it reflects the financial health of the company and therefore, doesn’t show a complete picture of a company's value. This is because Net equity doesn’t take into account other factors such as our potential earnings and human capital.

      To reflect our potential as a pre-revenue company, we used a projected financial forecast to generate a valuation using Equidam. We chose two different valuation methods, scorecards and venture capital. You can read more about these two methods in the valuation report we have now uploaded. Our financial forecast was based on numbers from comparable companies overseas and adjusted for the New Zealand market. (You can read more about this in our Profit & Loss Assumptions)

      Reply to your note:

      The figures in the Financial Summary on PledgeMe are current figures(so far into this financial year) for FY 2022/2023 while in our memorandum these are predicted figures to give the reader an understanding of our expected profit for the full financial year.

      We agree that we could have added “est” on top of the columns in our memorandum to reflect this clearer.

      Thanks again for taking the time to read our information memorandum and putting together these questions. If you have any more don’t hesitate to ask.

      Answered on 27-06-2022 by Laurie Alec Chaplin

      Geoff Tobeck
      2022-08-04 09:53:59 +1200
      Mike
      2022-07-30 14:02:32 +1200
      Claire McGowan
      2022-07-30 03:32:42 +1200
      Joshua
      2022-07-19 09:24:16 +1200
      Julia Wilson
      2022-07-16 13:14:36 +1200
      Simon Paris
      2022-07-10 20:47:40 +1200
      Devina hussain
      2022-07-10 20:18:48 +1200
      Reshad Hussain
      2022-07-05 21:18:00 +1200
      Joanne mellis
      2022-07-04 12:17:27 +1200

      "Looking forewords to great thing with you. good luck"

      Pablo Jr
      2022-07-03 18:27:48 +1200
      Frida Sumardjo
      2022-06-30 11:50:48 +1200
      Danielle Auld
      2022-06-30 09:58:48 +1200
      Dope Honey Limited
      2022-06-29 14:16:47 +1200
      Paul Lambert
      2022-06-28 09:48:27 +1200
      Nicholas Walshe
      2022-06-27 12:39:35 +1200
      Marvin Lewis Mackey
      2022-06-25 08:28:21 +1200
      Cuong Tran
      2022-06-24 12:43:26 +1200
      Otto
      2022-06-24 12:26:53 +1200
      Equity Offer

      From NZ $200,000 for 1.0%

      Up to NZ $2,000,000 for 8.9%

      Share Offer

      Up to 2,000,000 Shares

      at NZ $1.00 per Share

      Investor Perks

      (Determined by your pledge amount)

      Shares In PayAid

      NZ $500.00+

      Ordinary non-voting shares in PayAid Nominee Shareholding Limited. PayAid Nominee Shareholding Limited will hold legal title to these shares on trust for investors under this offer. You can read more about the rights attached to shares in our Constitution.

      Warning statement about equity crowdfunding

      Equity crowdfunding is risky.

      Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks.

      You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

      New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

      The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

      Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.