Tip Of The Iceberg
James Fahy and Ciara Walsh’s digital gratuity business almost failed shortly after starting up. With renewed investment, the young entrepreneurs are hoping to tap into a global demand for a cashless tipping solution, writes
Few people start a business at the age of 20, and mostly for good reasons. Barely out of their teens in April 2021, James Fahy and Ciara Walsh took the plunge with an idea to facilitate digital tipping. The business ran ahead of itself and almost crashed, but the young founders have been given a second chance by investors and taxpayers.
It was November 2020 when then 19-year-old James Fahy had a lightbulb moment. In the midst of the Covid pandemic, Fahy wanted to give a tip in his local café and was presented with two problems — he didn’t have any physical cash, and he didn’t entirely trust that all of his electronic tip would go to the staff. “I decided it would be a good idea if there were a platform where the tips go directly from the customer to the staff, exactly like how cash tips work,” Fahy recalls.
That was the genesis of JustTip, a platform that enables coffee shop, café, restaurant and salon staff to receive tips directly from the customer. It works with a physical POS terminal that allows customers to tap a tip payment in-store outside the store’s POS system. JustTip also functions using bespoke QR codes.
JustTip’s hardware comes in two options, with the choice of a QR code scanner or a physical POS terminal that allows customers to tap the tip. To turn an idea into a business, Fahy turned to his friend Ciara Walsh, who studied marketing at TU Dublin. “I suppose it was another lightbulb moment,” says Fahy. “I’d like to think Ciara fell in love with the idea, but she definitely liked the concept due to her hospitality experience.”
Incorporated in April 2021, JustTip Technologies Ltd’s first funding was €75,000 from family and friends in
November 2021. There was another funding round in March 2022, though that allotment detail is not available in the CRO. Two more allotments were effected in November 2022, raising €340,000, with John Moriarty and Colm Lyon’s Payvation Ltd each investing €100,000.
As is the case in many young entrepreneurs’ journey, mistakes are made. JustTip, which commenced operations in July 2021, was nearly out of business just a year later. “Within a month of launching, we were in the UK and I was in a state of ‘go global’,” Fahy explains. “I went to a head-hunter to find a chief operating officer. We hired about 11 people across Ireland and the UK, with one in the US.”
With the sudden influx of new staff and salaries to boot, the problems started mounting for the founders. “We secured investor money and burnt through it very quickly. We had a head of sales who didn’t make a sale, and by June 2022 we had to let everyone go. It was back to just me and Ciara,” says Fahy.
In August 2022, the founders were engaging with restructuring experts, and the future for JustTip looked bleak. The company annual accounts disclose minimal detail, but the 2022
numbers record a net loss of €420,000 for the year, bringing the total start-up loss to €480,000. The November 2022 funding round steadied the ship and Fahy says investment from Enterprise Ireland’s HPSU fund gave the company a “push again to keep going”.
While JustTip initially marketed itself as a way for hospitality businesses to save on admin costs, such as accountancy fees for packaging tips with payroll and adding on employer PRSI, a new law also assisted the JustTip proposition. Legislation enacted in December 2022 mandated that tips could not make up part of an employee’s pay, while also stipulating that employees must receive 100% of cash and electronic tips. With similar legislation slated to be introduced in the UK, the growth opportunity for JustTip was obvious.
The venture had its largest funding round in December 2023, when the company sold shares worth €348,000 to ten investors. The price per share was 24% higher than a year earlier.
The most recent funding was in January 2024, when Enterprise Ireland invested €100,000. All told, Fahy and Walsh, now both 23 years old, have parlayed over €860,000 from investors for their start-up. According to Fahy, headcount is currently 11 people and the next goal for the firm is to break even, a feat that Fahy believes will be reached within two years.
The revenue model is a 5% charge on every payment made on the tipping machines, and a €45 monthly charge for the business to use the software. “It might seem expensive compared with a card machine, which everyone does,” Fahy concedes. “But all a card machine does is transfer payments to a bank account. The tips collected by JustTip are divvied out to each employee’s bank account once a week. This saves businesses from salary PRSI charges, as well as the time involved in dividing the tips manually.”
Though JustTip has first mover advantage in Ireland, it also has competition. Tipping platform Urocked, owned by Paynt in Latvia, is active in the UK and the Baltics, and the product is now being offered to Irish businesses after being endorsed by the Restaurants Association of Ireland.
Fahy says he travelled to Riga last year to meet with Paynt, who had expressed interest in the JustTip product. “What came from that was silence, and then Urock launching the product that I had pitched,” says Fahy. “JustTip transactions are processed through banks that have authorisation in Ireland. Essentially we keep our regulated identities within Ireland and the UK. The other differentiation between JustTip and whatever else is that we work directly with the customer.
“I like competition, it’s market validation,” Fahy adds. “We are the only boots on the ground in Ireland, and we offer a low price, high integration product. We can come into your business and in 15 minutes you’ll be fully compliant with legislation rather than taking apart your entire system.”