Our Journey This Quarter

Kredit Academy wishes you a Happy National Be A Millionaire Day. Today has significant meaning for us and where we are as a company. Now, you may already be a millionaire (or aspiring to be one!) but, nonetheless - we all have the ability to think like one!

‍

Since receiving the $1 MILLION investment (in exchange for 5% equity) from winning the 43North competition (see our winning pitch HERE which also earned us the people's choice award) and relocating HQ to Buffalo we have been feverishly focused on adopting the habits of millionaires so that we can effectively grow and scale.

‍

As we continue our journey at Kredit Academy, we are thrilled to share some significant milestones and exciting developments from this past year. Before we get into it, we have some exciting news to announce... OUR NEW WEBSITE IS LIVE!

‍

Effective next quarter all investor updates will go behind a password protected part of the Kredit Academy website. You will be able to retroactively view quarterly updates instead of having to backtrack emails.

‍

Now to update you on how 2024 has been going for us so far...

1. 1st Annual Meeting:

We are happy to be hosting our first annual retreat as a company. The event will take place June 14th in Buffalo,NY. If anyone is interested in attending, fill out this form HERE to register and learn more details about the event.

2. Company Rebrand:

When we first started this journey, we were simply Kiddie Kredit. We have now changed the name to Kredit Academy . Nothing changes from a company ownership structure. We are still a C-corp operating as Leaping Harts, Inc. In short, Kredit Academy is the company name and we offer three core products; Kiddie Kredit, Kredit Quest and The Kredit Card.

3. What Are The Three Products:

We've expanded now to offer a suite of financial wellness products that aim to usher in a new era of credit conscious consumers. A little bit more on each:

• Kiddie Kredit: A mobile app that introduces children under 12 to financial literacy through gamified chores and rewards, teaching them the fundamentals of credit. Think of missed chores like missed payments and each time a child asks for a reward it's like an inquiry.
  
• Kredit Quest: An educational platform that offers a gamified and personalized financial literacy journey for all ages, integrating with existing systems to enhance user learning and engagement.
  
• The Kredit Card: A white-labeled secured credit card solution designed for financial institutions to offer first-time credit users a safe and educational pathway to building credit. The card is combined with a high yield savings account so users build credit and savings simultaneously.

4. Strategic Partnerships:

Our partnership with formidable companies in the world of credit like Discover and Equifax continues to strengthen, providing us with continued credibility and the domain expertise to reach more users effectively. We are leaning in on our relationship with Discover to bring The Kredit Card product to market while thinking long term with Equifax about the future of credit reporting.

5. Customers:

• Kiddie Kredit: Our product focus has pivoted, we are focused less on selling Kiddie Kredit to organizations and just providing it free to parents. The app requires minimal COGS to support and is part of our long term strategy to eventually offer a consumer facing product. As it stands currently most companies in the space face the challenge of increased CAC. With us having our own existing customer base over time we can have our own acquisition channel with minimal expense to convert to a teen+ product offering (The Kredit Card). That stated total ARR for Kiddie Kredit is $42k ARR with three contracts (Equifax, 2 credit unions) up for renewal.
• Kredit Quest: Think Duolingo for Finance with Kredit Quest. We white label an educational journey for our clients (See HERE for sample screenshots, the product will also have a backend dashboard for clients to track metrics and engagement which is specifically important for banks with CRA requirements). With 60% of kids who's parents bank at credit unions banking elsewhere, credit unions have taken a particular interest in this product as it's closer in age to their current member base than Kiddie Kredit and doesn't require a deep integration with a banking core to launch. We are partnering with M&T Bank to launch with the City of Buffalo's Summer Youth Program, that is the first phase of the engagement, second is targeting an internal employee pilot catered towards the employees that are consumer facing. For sake of confidentiality we can't disclose the terms of the deal on this email but will provide more details in future updates. Upon successful completion of both of these phases the larger opportunity would be to have Kredit Quest available to the 5M+ customers they currently serve, we have our work cut out for us but aspire to make this happen. 43North program has been great to us so far and this relationship with M&T is a direct relation of us winning the program and relocating here to Buffalo. Estimated product launch: Q2 2024.
• The Kredit Card: Simply put, a secured credit card (meaning the user funds the credit line themselves) with an attached high yield savings account so that the user builds credit and savings simultaneously. The card is white labeled for brands (focused on small and mid sized credit unions to start) that don't have the time or resources to bring a card to market. We experienced a set back this quarter after losing the original sponsor bank we had for the launch of the card, this has pushed back our card launch until end of year. We are in conversations and negotiations for a replacement sponsor bank which we intend to have resolved by end of Q2. The card is still intended to launch on Discover Global Network and you can click HERE to view some sample credit card images as well as clicking HERE to see a sample walkthrough of what the backend will look like for credit unions. We have a credit union under contract ($75k contract value, additional $100k set aside to aid first 1,000 CU members establish credit) which is a big win to have a paying customer pre launch of the card. Estimated product launch: Q4 2024.

6. Internal Team Update:

Our team is lean and provides us the expertise we need to go forward. To provide some context on all team members:

• Evan Leaphart - CEO - Serial entrepreneur, mission driven to solve the issue of financial wellness by taking aproactive approach. Co-Founder of Black Men Talk Tech conference (stepping down from leadership role in 2024 to fully focus on Kredit Academy).
• Michael Gross - COO & Head of Education - Over 15+ years experience teaching financial literacy and entrepreneurship to inner city youth. Responsible for developing over 250 hours of content for Kredit Academy and serves dual role managing internal operations.
• Ashley Jones - Head of Customer Success, was on founding team at Greenlight (leading debit card for kids product) as employee #6, working there for 6 years and led their customer success team.
• Victor Moreno - CTO - Long term technical oversight, senior engineer at AWS who oversees the technical architecture alongside our new Senior Software engineer, Ramses.
• Ben Quaye - Head of Compliance - Joined team via recent acquisition of his company OctoCredit. News of this team up was featured in This Week in Fintech's weekly newsletter. Ben has AML/BSA certifications that will be vital to the business as we look to forge forward. Acquired via stock deal.
• Ramses Mendoza - Newest addition to the team, senior full stack developer who is proficient in Flutter which will be our new dev stack going forward alongside MongoDB for the database and Node.js for the server.

7. External Team Support & Interns:

Our contracted and intern support is extended family for the company. They have been just as vital in the growth of the business, for additional context:

• Cathy Corby Iannuzzelli - Compliance Lead - Responsible for our implementation process with sponsor bank, previously served as senior executive at i2c.
• Daniel Chan - B2B Sales Intern - UB student, responsible for lead gen for credit unions. Visited 50+ credit unions in Buffalo region, soon relocating to NYC and will continue that process.
• Sreya Kalidindi - Financial Analyst Intern - UB student, moving to team role, focused on building out financial models for internal use as well as external use for clients evaluating ROI of our products.
• Bryant Gibson - Marketing Intern - UB student, worked with our team in Q2 to provide marketing assets for the business.
• Deposits, Inc. - Providing dev of The Kredit Card app which was designed in Flutter which will allow for easy integration of Kredit Quest SDK so users can earn reward points not just for spend but for what they learn as well.
• Jai Infoway - Dev agency responsible for QA and continuous product enhancement of Kiddie Kredit. Low cost allows us to continue to support the upkeep of the app without allocating significant resources.
• IgniteFi - Firm focused on helping us accelerate our CU go to market. Two founders of the company have a collective 50+ years in credit union and community bank fields.
• 5Four Digital - Full stack marketing agency, founder John Saunders has founder shares in our company, responsible for web design, social media and creation of brand assets.

8. Advisors:

Our advisor team has been wonderful. From The Lean Startup author Eric Ries, Chore Monster founder Chris Bergman and The Seventh Level author Amanda Slavin to name a few we have been fortunate to have some senior expertise in our corner. Recently we added Eric Rosenthal who serves as Chief Strategy Officer at Rapyd as an advisor, he's been vital in helping us navigate the complicated fintech landscape. Our Board of Directors now counts David Stiffler (spent 15+ years at Equifax, now runs Community Relations for Edward Jones) and Mylee Vigness (fintech vet, served as Head of Innovation for Snap Finance), they serve alongside myself and Mike on the board with long time mentor Marcus Williams (connected via Endeavor) serving as board observer. We also have something cooking with Mickey Factz, a well respected hip hop artist in the community and known for his viral raps on entrepreneurship and financial literacy. Stay Tuned!

9. Demo Days:

The Kredit Academy team was active last month for National Financial Literacy Month. Mike and I had our 43North demo day in front of investors in New York City while simultaneously Ashley represented the team at our ACT House demo day in Tulsa. Both demo days led to some promising VC conversations and follow ups and some may be reading this same update as we speak.

10. Press:

Mike just wrote a wonderful article in CU insight about financial capacity which was one of their most shared articles of the year! CU Insight is a leading credit union news publication and is a core part of our strategy in positioning our company as thought leaders in financial wellness for younger generations. Additionally both of us were on podcasts jointly for More Elephant as well as 43North. Lastly we were featured on Bloomberg TV earlier in the year. These have all been organic press opportunities for us, we intend to run more of a paid marketing campaign in Q3 once our new HubSpot integration is complete. Our sales and marketing funnels have been built out and once implemented will allow us to run more efficiently and better track metrics around engagement. Super pumped about this!

11. Financial Health:

Thanks to the recent 43North investment we have 10 months of runway. Our distributions are quarterly and without additional revenue we can operate until Q1 without running out of cash. That being stated we are aggressively looking to raise a $3M round, $1M is already accounted for by way of written commitments from previous investors along with participation on current terms from Amazon Alexa Fund and the acquisition of OctoCredit being done on the same SAFE ($17.5M post money, 15% discount). That being said we are seeking a lead with fintech expertise and will convert all SAFE investors on this note to the preferred terms of the lead. This makes it a very investor friendly deal for anyone looking to write an angel check into the round.

12. Crowdfunding Investors (via MicroVentures):

To anyone who invested in our company via MicroVentures in 2020, we greatly appreciate your early support. For updates on how the terms of your note work please reach out to help@microventures.com and we can work with them directly to assist.

13. Sales & Marketing Materials:

If anyone needs a copy of our most recent investor deck, sales deck and/or most recent SAFE feel free to reply to this email.

Needs: As we move into Q3, we really want to have a strong cash position so we can get our card product to market without any issues. Having our card product on Discover's network in advance of the completion of Capital One's acquisition of Discover would greatly increase our chances of having continued company support. The focus of the acquisition for Capital One was the acquisition of the network itself so it is our understanding they would lean in more with the things that are already in market while things still pending could be shelved in the name of consolidation. Any intros to potential investors would be greatly appreciated, if interested in investing additional yourself feel free to reach out to me directly at evan@kreditacademy.com.‍

‍

Special Thanks To: 43 North, ACT House, Tampa Bay Wave, Endeavor, IgniteFi, JLH Social Impact Fund and LearnLaunch teams. Your investment combined with continual support has been vital for us this past year and beyond. If you are receiving this email you are already special to us and we thank you for staying with us on the ride. Our domain expertise in the space continues to grow and it's only because of the wide network we've been able to tap into as a result of programs we've participated in.

‍

Thank you for reading this lengthy update, we couldn't do it without you. Let's continue on the journey together to help the upcoming generations experience a financially free future.