Still struggling financially after raising $3.1 million in five years, fintech Hardbacon is cutting the fat. Julien Brault, its president and founder, announces the abandonment of the investor assistance tools that have been at the heart of its service since its creation in 2017.
The approximately 2,000 shareholders embarked on the adventure, notably through two crowdfunding stages that occurred last year, have no say in this change of course. “It would be unmanageable,” says Julien Brault. Hardbacon raised approximately $800,000 in 2022 through the FrontFundr web platform.
Hardbacon is one of the few start-ups in Quebec to rely on crowdfunding to finance its activities. Rather than turning to private investment firms, crowdfunding allows a company to collect small amounts from a large number of people, usually over the Internet.
In a communication on social media, Hardbacon confirmed that it was scuttling the very app that saw it born. “It’s the end for the ‘Investment’ feature in the Hardbacon app,” Julien Brault wrote on Facebook last Thursday.
This functionality made it possible, among other things, to interconnect investment accounts, obtain automated analyzes of portfolios and run stock market simulations. “In other words, we threw away almost 100% of the code written before 2020,” he summarized on his Facebook account.
Hardbacon is delaying its intention to list on the stock exchange. The young Montreal shoot had, in the past, used this desire to become a public company as an argument to recruit investors. “The market is currently not favorable to an IPO, so it’s no longer possible,” said in an interview with the To have to Julien Brault. “I made the mistake of giving a timeline in the past, and I still think it’s a good idea, but you can’t predict the future. »
Rather than preparing for an IPO, therefore, Hardbacon is beginning a new stage of financing with “accredited investors”, ie individuals who are in a sufficiently comfortable financial situation to put funds into a project like his.
Still not profitable
The risk remains high: Hardbacon is still not profitable. Optimistic, its founder has set himself the target of becoming one within a year. “We have revenues over $500,000 [en 2022], we are not profitable yet, but we should achieve this this year, ”he promises. To achieve this, Hardbacon will have to double its income, he adds, confirming in passing that he made layoffs last year.
This announcement completes a shift in Hardbacon’s business model that should have been made earlier, admits Julien Brault. “It lasted longer than it should have. It became difficult to support financially. »
Going forward, Hardbacon will therefore focus on offering and comparing free financial products for its users, to which the app will add advice and information to help people with their personal finances.
In mid-January, in the wake of the craze generated by automated text generation services like ChatGPT, from the Californian laboratory OpenAI, Hardbacon also launched its own content creation company “which relies on technologies like ChatGPT to help its customers replicate its success” on the Internet.
The “big change” for Hardbacon is therefore to have become a free application on personal finances and which generates income by directing its users against payment to banks or other financial institutions. Prior to that, the app was targeted more at self-directed investors and was sold on a paid subscription basis. “I don’t foresee any other change in business model,” says Julien Brault.
This shift towards content production on Hardbacon’s part hasn’t been without waves. This fall, the mortgage brokerage firm Planiprêt filed a complaint with the Autorité des marchés financiers (AMF) against the CEO. Julien Brault. It is alleged that Mr. Brault, during an appearance on a TVA television program, provided mortgage advice without having the necessary certifications. Mr. Brault then defended himself on his Facebook account from giving advice, claiming instead to “popularize personal finance concepts”.