How we pulled off the best Dragons’ Den deal in history and exited for £12.5m

Entrepreneurs Henry de Zoete and Will Hodson have had a crazy 12 months. In August 2018, they made Dragons’ Den history by netting the best cash-to-equity deal in the show’s history (£120,000 for a 3% stake). A year later, they sold their business, Look After My Bills, for £12.5m. 

Business-wise, years don’t come much better. So, job done? Time for a Caribbean holiday? No chance. Henry and Will are still on a mission, and when that’s done, they’ll find another. That’s just what they do. 

How it all began

The pair met at Bristol University at the turn of the millennium and became good mates. After graduating, they went their separate ways professionally – Henry ending up as a special advisor to Michael Gove at the Department of Education and Will joining Deloitte and later launching a tech start-up – but they still kept in regular contact. In 2014, they caught up at a party. Then timing was fortuitous as they had both just finished other things. “Will had just wound up his start-up and I was thinking of moving on from the Department of Education,” says Henry. “I’d worked there for four years. It was a brilliant job but full-on. I was at the mercy of the media 24/7 while dealing with the civil service, trying to get things done in a big bureaucracy. So Will and I met again at a turning point in our lives and we started to knock business ideas around.”

The Big Deal

In 2014, they launched The Big Deal. The concept was to build an extensive database of customers and negotiate deals with energy providers on their behalf, creating economies of scale. Henry says: “We quickly built up a database of several hundred thousand, working with various groups and newspapers. We then brokered deals with energy providers. In total, we saved our customers £100m – an average of £280 per household.”

Lightbulb moment

However, a significant issue soon reared its head. The one-off deals that Henry and Will had been negotiating usually ended after 12 months. Then, The Big Deal’s customers would automatically roll onto less enticing deals – unless they switched again. “That’s how it works,” says Henry. “Providers pull in customers with sweet deals, then put their prices up. So, our customers started telling us: why do we have to switch each year? Why don’t you do it for us? We trust you. It was a Eureka moment.” 

Rip it up, start again

Towards the end of 2016, Will and Henry changed tack. They started looking beyond one-off deals and wondering whether they could manage their customers’ bills long term, changing provider at the right time to secure the best deals. After much deliberation, they decided they could and Look After My Bills was born. But changing their business model so fundamentally wasn’t easy. “We pivoted to Look After My Bills in 2017. Basically, we blew up The Big Deal model and moved to something new. But it was scary because The Big Deal had worked. It had generated more than £1m in revenue in 2016 and we had to persuade our backers – five angel investors – that ripping it up was the right thing to do.”

A trip to Silicon Valley

During 2017, they built a beta version of Look After My Bills and formally launched it the following year. This attracted famous Silicon Valley seed-accelerator Y Combinator – the VC fund that launched the likes of Dropbox, Airbnb, Stripe and Reddit. Y Combinator invested in Henry and Will and invited them to California for three months. 

“We learned tons in the US and it was an amazing experience,” says Henry. “Y Combinator’s mentality – like most Silicon Valley funds – is to invest in a heap of companies, assuming that 70% will fail. It’s the 1% – the ‘unicorn’ – that they’re looking for. That 1% carries the whole fund. For me, that approach is challenging for founders because if you don’t become that unicorn, you almost feel like you’ve failed. In the US, our £12.5m exit in 2019 is seen as small fry. Most US venture capitalists would have advised us not to sell, to double down, raise more, and try to sell for ten times the sum later on. British business culture is arguably more risk-averse than that of the Americans.”

Into the Den

Wiser – and with their majority share in Look After My Bills intact – the pair returned to the UK. At this point, their key aims were to find the right expertise and to advertise the new business. While watching Dragons’ Den one night, it struck Henry that the programme could deliver both aims. “I was watching not long after getting back from the US and thought sod it, I’m going to apply,” says Henry. Before long, they were accepted and invited on.

“It was terrifying. Incredible. In the Den, you’ve got to get all the information out there before the Dragons tear you to shreds. We’d been going since 2014 and built £3m in revenue, so we had a proven track record. That helped us to power through our pitch. But it wasn’t easy and we knew that the first Dragon’s response would be crucial because they can follow a group mentality. We got lucky. Tej [Lalvani] cut to the chase and made an early offer. That got the ball rolling in the right direction. When negotiating, it’s vital to leave a bit of wriggle room on the deal you’re after – remember, it’s a negotiation, not a take-it-or-leave-it situation.”

A hat-trick

Their strategy worked. The duo walked away with three huge wins: incredible advertising and PR; £120,000 of investment (in exchange for a 3% equity in their business); and access to two of the best entrepreneurial minds in the UK – Jenny Campbell and Tej Lalvani. “We got a little merry on the train back from Manchester,” laughs Henry.

The mission

So far, this article has focused on Henry and Will’s business successes. But there is more to their story. Since the launch of The Big Deal to present day, the pair say they have been driven first and foremost by social conscience, not cash.

“Our mission is to save people time, money and worry,” says Henry. “Under the current system, if you’re a loyal customer, the big providers will try to rip you off. They lure you in and then surreptitiously roll you onto a more expensive deal. We call it the ‘Freddie Kruger economy’ – companies wait for people to fall asleep and then they hurt them. At Look After My Bills we stop that happening, forever.”

A clear plan and plenty of guts

It’s a strong mission statement and an impressive sales pitch – there’s a massive demand for a service that promises to remove the headache of managing bills while reducing costs (they’ve already reached 200,000 customers). With that in mind, it’s no surprise the Dragons bit Henry and Will’s hands-off, nor that GoCo Group gobbled up the rest (at least doubling the Dragons’ money in the process). 

And what of the future? Well, for now, Henry and Will remain at the centre of the business, driving it forward, working in tandem with GoCo Group to fulfil their mission. What they choose to do next remains to be seen, but their story offers a valuable lesson: if you identify a problem that affects millions of people, offer a solution, and grow your business with guts and clarity, then the sky’s the limit.

Disclaimer: The statements made by our interviewees are an expression of their own views and opinions and in no way reflect FEBE Ventures’ views or opinions, nor are such views or opinions endorsed or supported by us.