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Spare is a company that is taking the ATM market by storm. Owner, D’ontra Hughes, came to the Shark Tank in hopes of finding an investor willing to provide his company with $500,000 in exchange for 3.5% equity. LA native, D’ontra, got tired of searching for an ATM only to find one that’s not affiliated with his bank so he would get charged high convenience fees. This was the motivating concept behind the creation of his company, Spare, a virtual ATM network that is cheaper, more secure and more convenient than traditional ATMs. This mobile solution allows consumers to connect their bank account to the Spare app. An in-app map will then populate with merchants nearby that are willing to dispense cash. A one-time use code is then generated for verification. The user goes to the merchant, they scan the code and dispense the cash.

Although there is a $3.00 convenience fee charged, it is cheaper than a third party ATM which averages at $4.69 nationally. As an added benefit, Spare supports small businesses by increasing foot traffic and revenue in their stores. The convenience charge is split equally between Spare, the merchant, and the processor. Over the last 2.5 years, Spare has accumulated 2,500 participating merchants nationwide and is currently managing approximately 2700 transactions per day.

To launch the company, Spare raised $500,000 from family and friends, as well as a convertible note wrapped at 9 million. D’ontra has also made a deal with a strategic hardware partner who has point-of-sale (POS) systems in stores already. Their biggest challenge currently is to show proof of concept in order to land larger accounts.

Although the Sharks think that the concept is interesting, they struggle to understand the logistics as most merchants are looking to reduce the amount of cash they have on hand, not increase it. They are also greatly concerned about the company’s valuation. Although the other Sharks are not interested in making Spare an offer, Mark Cuban sees the potential in the company and makes D’ontra an offer. They agree to an investment of $500,000 in exchange for a 12% equity share plus 2% in advisory shares.

Would you invest in Spare if you were a Shark? Is this a service that you could see yourself utilizing? Sound off in the comments below!

For a full summary of this episode, check out this article. Shark Tank airs on Sundays at 10:00 PM EST.

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