Facing down the dragon – why Mallzee turned down £75k in the Dragons' Den

 

Described as the original ‘Tinder for fashion’ app, Mallzee lets users shop more than 100 stores in one place – from high street favourites to designer boutiques. Users can also create style preferences and share shopping habits with friends. Launched in December 2013 with £75k of funding, rapid growth took Cally Russell on a quest for more funding and a visit to the Dragons' Den. He shares his story with Gameplan.

About the author

Cally Russell

Cally Russell is the 27-year old founder and CEO of fashion app Mallzee. Launched in Edinburgh in late 2013, the business recently received an injection of growth capital and is tipped to reach
1 million users in 2016. Mallzee brings together over 100 fashion stores into one easy-to-use app, and has users in over 125 countries.

Cally Russell portrait

Mallzee at a glance

Mallzee_Infographic

Mobile is a growing medium for today’s shoppers, with sales on mobile devices growing by an impressive 42% in the last year.1 But that growth story isn’t the whole picture. Reports also show that customers often find shopping on their mobiles frustrating, with 55% of UK smartphone owners having abandoned a transaction due to poor user experience.2 That’s a clear problem.

The concept for Mallzee came from the idea that shopping online using a mobile device is, in our opinion, fundamentally broken. While it’s not hard (although onerous) to open lots of tabs on your laptop or tablet to browse fashion offerings from different stores, it’s much more difficult to jump from store to store on an iPhone for example.

So, we set out to make it really easy to find clothes on the go. We wanted to create something that brought fashion from different stores into one single, viewable place, creating the ultimate mobile shopping experience.

Early buzz

We began by making a single page website, announcing that Mallzee would launch in three months’ time, and then we started promoting it. Within a couple of weeks we managed to sign up several thousand people. From that, we were able to fundraise on the basis that we had an idea that people want to use. People had signed up to use Mallzee before it was even built, so let's go forward and create this product.

Entering the Den

Fundraising is one of the most difficult things you can do. But, as the business grew rapidly, it was obvious that we needed more funding to help us achieve our goals of increasing user numbers and locations, and building new innovations. I’d always watched Dragons' Den and I thought, ‘we have a product I think these guys would really like – why not have a go?’

We were asking for £75,000 in exchange for 5% of the business and when Peter Jones came in with an offer, you think ‘Great!’ But Peter was offering the full amount in exchange for 20% of the business. At the time, my mind was racing, doing calculations about ownership structures and so on. Rationally I knew that giving away 20% of the business wasn’t viable, but when emotions are running high and there’s someone in front of you prepared to stump up the funding you want, it becomes a tough call.

Tough decisions

Despite this I knew we had a really solid proposition and we’d set a fair price. I got to the point where I wasn’t willing to move on that belief no matter what had been said to me. Still, turning down the money was really painful.

Did I regret it? There were certainly small moments afterwards when you wonder whether you’ve made the right decision, but I think we’ve proved that it was right. Peter Jones, on Dragons' Den said that Mallzee was either “a £100m business or nothing”. We’re hoping for the former.

Aiming high

We were compared to Tinder quite early on, presumably because we use a similar type of interaction. Tinder’s now a multi-billion dollar company, so that’s not a bad thing to be compared to. Getting the same sort of numbers or swipes as Tinder on a daily basis is certainly something to hope for. In the week before Christmas 2014, we had the top searched app in the UK, so that’s a start.

Just appearing on Dragons' Den brought a huge amount of attention, which helped the business. For example, we landed an exclusive promotional agreement with Samsung to make Mallzee available on their GALAXY app during 2015.

A clear strategy

We’ve always had a very clear road map. What kept us going after we turned the funding down was that we’ve achieved all of the targets that we have set ourselves along the way. Obviously raising the funds was still a priority for us. After a lot of shoe leather, a lot of coffees, meetings and presentations over a three-month period, we closed a deal in July 2015 for £2.5m growth capital, led by Royal Mail.

That deal is central to our vision of making Mallzee the ultimate place to shop on mobile. We’re looking at lots of different developments and improvements and our aim is to hit 1 million users in the near future. That’s massively exciting for us.

Think positive

“The journey is much harder if you take setbacks to heart and beat yourself up about the decisions you’ve made.”

The Dragons' Den experience taught me that facing challenges is inevitable, but you don’t need to compromise to overcome them. Don’t be afraid to ask for help, but stay true to your beliefs. It helps that when things go wrong, I’m one of those people who doubles down on effort, tries new things and pushes on. The journey is much harder if you take setbacks to heart and beat yourself up about the decisions you’ve made.

Cally Russell’s top tips for business growth:

  1. It's all about the team, so surround yourself with fantastic people and give them the confidence and the ability to do what they need to do.
  2. Don't be afraid to ask for help and embrace that culture.
  3. Think big. If you aim big and don't achieve it you'll still push yourself onto the next level and if you do achieve it, you can go on and build something fantastic.

Share this article

There are a number of ways you can share this article.

icon - mouse - sand

Businesses can increase turnover and become more efficient by embracing online skills. Our guides are designed to highlight the benefits and how to apply them to your business.

Find out more

Measuring digital maturity

Martha Lane Fox explains that no business can afford to get left behind in the digital economy.

Find out more

Everyday banking

Everyday banking whether you are starting-up or currently trading

Business Account for Start-ups 

Move your business account to us 

Business ToolBox

Try financial and digital business tools for 30 days with no obligation, including business planning and accountancy software.

Find out more
Back to top

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.

Lloyds Bank plc Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 0207 626 1500.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278.

We subscribe to The Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all Business customers will be covered.

Lloyds Banking Group includes companies using brands including Lloyds Bank, Halifax and Bank of Scotland and their associated companies. More information on Lloyds Banking Group can be found at www.lloydsbankinggroup.com