In 2018, Ratehub Inc will help over 5M Canadians make smarter financial decisions. Helping people choose better mortgage rates, cheaper credit cards and more accurate auto insurance will deliver over $10m in annual revenues, a feat enabled by 70 passionate employees. But success didn’t happen overnight. It took 8 years of ambition, determination and resourcefulness to grow from one great idea to the leading product comparison website in Canada. Here’s how it happened.
Chapter 1; Humble beginnings & a desire to make things better
Long before comparing financial products online was commonplace, James Laird and Alyssa Furtado, two friends studying Commerce at Queen’s University, had an epiphany. Finding impartial, credible information on Mortgage rates was far more difficult than it needed to be. For everyday Canadian's, navigating the choppy waters of finance jargon and complex calculations was a confusing painful process. Rather than accept the status quo, the duo were Inspired by the realization that the personal finance industry was slow to adapt to the changing consumer landscape brought about by the internet. There had to be a better way. Setting up shop in Alyssa’s townhouse, and with just $100k of launch capital provided by the starters themselves, the team set to work on building what is now known as Ratehub.ca.
Chapter 2; Bootstrapping in a Toronto townhouse.
Ratehub.ca’s initial business plan was to reach $300k in revenue by within 5 years of launch. To achieve this, the team knew they would be competing for consumer attention against the big banks, and their multi million dollar advertising budgets. Alyssa and James knew that the only way they could win, was if they changed the rules of the game. To do this, the team set about building a technology platform designed to generate traffic for next to no cost through search engine optimization, brand building with PR and an affiliate marketing programs. With SEO firmly embedded as the DNA of the business, and two additional investors including Lauren Haw, CEO of Zoocasa Realty, the business grew rapidly from 30,000 yearly visits in 2010 to over 5 million. The 5 year $300k revenue target was smashed, crossing the mark at $1.5m in net revenue by selling mortgage leads to lenders.
Chapter 3; Pivot points, and Dragon slaying
2014 saw a big shift in strategy. James, an early pioneer in online lead selling proved that 75% of the leads that Ratehub was providing to banks did not result in a conversion. In effect, 75 out of every 100 consumers walked away empty handed. The answer was simple, but the implications could be severe. By opening an in-house mortgage brokerage, Ratehub could earn 4x more $ per user, but it would mean competing with their existing lead purchasing customers. Strategically however, it was an critical moment in ensuring the business could realize its future potential. Most of the existing customers stayed on the platform, and Ratehub was able to increase customer satisfaction by offering competitive deals via Canwise, the brand new integrated brokerage arm. Over the next two years, revenues grew exponentially from $1.5m to $10m. It was at this point that Alyssa took the business onto CBC’s Dragon’s Den to seek external funding, and vitally a once in a lifetime PR win. Despite receiving strong offers of investment from all four Dragons, Alyssa declined all four offers, deciding that funding via a Venture Capital route would be better suited to the future growth of the business.
Chapter 4; From great, to f*ing awesome!
Fast forward to January 2018, Ratehub inc announced that Elephant VC, a Boston based Venture Capital firm had made a $12m series A investment into the business. With the team now at 70, and the cash injection to back further strategic expansion, Ratehub.ca has a new 5 year vision; that we will surpass the big banks as the go-to for financial decision making for all Canadians. In adding online insurance, deposit and credit card products in addition to our fully online mortgage process, we are already well on the way to realizing this vision. The best part? We’ll have more fun than ever along the way.