Ex-Virgin Money CEO Snoops for start-up backers | Business News
The former chief executive of Virgin Money is trying to raise millions of pounds for a technology start-up that will pledge to utilise consumer data to save money on household bills.
Sky News has learnt that Dame Jayne-Anne Gadhia has approached potential investors about helping to fund Snoop, which she is pitching as an opportunity to exploit reforms to the way information about customers’ spending habits is accessed by service providers.
Dubbed ‘Open Banking’ and introduced a year ago as part of a Government initiative, the measures are designed to give consumers greater control over their own data and stimulate competition across industries historically characterised by customer inertia.
Dame Jayne-Anne, who left Virgin Money following its £1.7bn takeover by CYBG, the Clydesdale and Yorkshire bank owner, is understood to be seeking £10m from investors, and is keen to wrap up the fundraising in the coming weeks.
Sources said she was working on Snoop with Dave Dyer, a former Virgin Money chief financial officer and long-standing colleague of Dame Jayne-Anne.
People who have been briefed on their plans said on Monday that the new company was intended to be a more sophisticated version of a conventional price comparison site – a crowded sector in the UK consisting of prominent brands such as Moneysupermarket, Comparethemarket and Go Compare.
Snoop is intended to remove the hassle for consumers and businesses of switching their provider of insurance, energy, mortgage or media services by automatically transferring them to a better deal when one becomes available based on their consumption habits.
Dame Jayne-Anne is said to have told prospective investors that Snoop can save British consumers significant sums of money amid evidence that their loyalty is costing them in excess of £1400 each year.
The issue has become particularly topical in recent months following a super-complaint from Citizens Advice to the Competition and Markets Authority (CMA) about the tendency of companies to charge existing customers higher prices than new ones.
In December, the CMA ruled that there was a ‘loyalty penalty’ totalling £4bn annually in five main markets: cash savings, mortgages, household insurance, mobile phone contracts and broadband.
Andrea Coscelli, the regulator’s chief executive, said at the time:
“Our work has uncovered a range of problems which leave people feeling ripped off, let down and frustrated.
“They shouldn’t have to be constantly ‘on guard’, spending hours searching for or negotiating a good deal, to avoid being trapped into bad value contracts or falling victim to stealth price rises.”
Snoop is said to have drawn up a revenue model based on a percentage of customer savings as well as commissions from partners and transactional income.
One source said Dame Jayne-Anne believed it could sign up nearly 2 million consumers within five years of its launch and achieve a £1bn valuation – catapulting it into the ranks of British technology start-ups to achieve ‘unicorn’ status.
Insiders pointed out that Snoop would not be a bank or represent a conflict with CYBG, which Dame Jayne-Anne will continue to advise during the coming months.
As chief executive of Virgin Money, she oversaw the acquisition of Northern Rock from the Government in 2011 and its subsequent integration and stock market flotation.
She was made a Dame in the New Year Honours List for her contribution to financial services and women in the finance industry.
Since stepping down as Virgin Money chief executive, she has become a member of the Bank of England’s Financial Policy Committee and joined the board of Stagecoach, the transport group, as a non-executive director.
Dame Jayne-Anne declined to comment on the details of her proposed start-up but said after being approached by Sky News:
“I learned from Richard Branson that there’s nothing more exciting than setting up a new business.”
It was unclear on Monday whether Dame Jayne-Anne would approach Sir Richard, the Virgin Group founder, about investing in Snoop.