The Spanish company, Hooptap, is a software platform that assists other businesses launch their own App or upgrade the quality of an existing App. Founded in 2011, Hooptap boasts over 1.2 million users and over 60 million game interactions. In three years the company is close to break-even and forecasts sales in 2015 to increase by close to 1.1 million.
KITE Invest: Hooptap appears to be doing well, what have been some of the major milestones in the company’s growth? And, how has the Hooptap team contributed to this?
Miguel Angel Santos: Hooptap started as an app where users played different games and were rewarded for it, and where advertisers were included as part of this entertainment dynamic, in a non-intrusive and efficient way.
Hooptap’s first great milestone occurred in 2013, when it changed from this B2C model to a B2B. Advertisers wanted an exclusive space to be able to make the most of the advantages our platform was offering. With this change, we embraced our first projects in the TV industry, for Clan, the kids channel from RTVE (Spain) and for Canal 13 (Chile), which gave us a great push to keep growing in this sector.
In 2013, we also developed our product for the loyalty sector, working with important international brands such as Air Miles and MTC. We have become established in these two sectors as our main markets, developing projects for new clients such as TVI (Portuguese television) or the Heineken brand.
In this process, our team has a key role. Our success comes from a fantastic team of enthusiastic engineers and creative marketers. It is a passionate team that enjoys being part of Hooptap. As a result of all this hard work we obtained clients that were highly satisfied with the results they received by working with Hooptap, like MasterChef, which has already used our platform in Spain and Chile, or Air Miles for whom we have developed four projects in one year.
KITE: Hooptap operates as a Platform as a Service (PaaS) offering gamification tools that boosts interest and engagement of the audience by stimulating game-like behavior in a non-game setting.Gamification is not necessarily a new tool, therefore, how does Hooptap differentiate itself from competitors?
MAS: Surely, there are several players offering gamification these days. In general, applying gamification consists in driving the user to have certain behaviours and rewarding those actions that we want to boost. For this, different mechanics and rewards, such as points, leader boards, and badge are implemented.
For example, in a web environment we can ask users to visit certain websites or to sign in for a newsletter in order to win some points. By carrying out different activities like these, users will be able to win badges and earn points, which will position he/she in a leader board. Also, users will be able to change these points for virtual goods. Besides applying this kind of gamification, Hooptap goes a step further and turns brand interaction to a different and fun experience.
With our platform, brands are able to integrate actions in their environment to meet their goals, encouraging users to overcome quests and rewarding them for it. Our catalogue counts with more than 50 mechanics and turns actions like going to a point of sale, interact in social media, prescribe products or buy in a gratifying and fun experience.
In essence, Hooptap allows for not only rewarding user activity but also getting them to carry out new actions.
KITE: As mentioned before, Hooptap combined these technologies and applied them to TV and other target markets. Please explain how Hooptap made the jump to TV?
MAS: Hooptap provides extra features for TV content, allowing for real interaction and figure improvement. The Apps that are developed using our platform allow users to trigger many actions – users can check the show’s content, can discuss the show and give their opinion, and play and win. Thanks to our proprietary audio recognition technology, we can identify the content that users are watching on TV and give them a customized experience each second.
According to Nielsen, the 85% of smartphone and tablet users, use these devices while they watch TV at least once a month, and 41% do this every day. Twitter is considered the leader platform for this, but the App developed for MasterChef in Spain beat Twitter, achieving more interacting users on the App during the broadcasting than the tweeting.
Using Hooptap, both TVs and companies from other industries are benefited from the natural brand integration in the user experience.
KITE: In terms of the company’s reach, Hooptap already has distribution partners in 12 countries, including the UK, Mexico, India, Turkey, the UAE and Russia. In terms of Hooptap’s rapid expansion, how has it adjusted to the demands (linguistically and culturally) of other markets?
MAS: One of Hooptap’s great successes in 2014 was the construction of a network of partners that has allowed us to have a presence in ten different countries. These partners are strategic allies due to the industry they base their activity in, the country they are located in, and the close collaboration with Hooptap for local business development.
Each of them has become a real adviser about how to approach the local culture, which allows us to adapt our business models and even adapt the product quickly to each market.
KITE: The company is currently seeking out Bridge financing, with equity being offered and a Pre-Money Valuation of €2,5 million Hooptap. Could you extrapolate on the terms of investment that Hooptap is currently seeking?
MAS: We are offering €185,000 in equity.
KITE: Bridge financing occurs before a company goes IPO, in this regard, please shed light on the business plan for the next two years.
MAS: The plan for the next two years is to accelerate growth as fast as possible.
We want to develop our technology to allow every software developer to be able integrate our solution to their Apps, which allows us to embrace a great market of potential customers. Likewise, we plan to expand our sales team and be present in strategic locations where we have more growth potential.
Our current investment round will help us to scale-up operations to a point where we can close a Series A Venture Capital round.