Diverzum, Hungarian student discount network

Diverzum, Hungarian student discount network

A hundred thousand Hungarian students (and five sharks) have already been convinced – Diverzum is entering the international market.

They went from high school friends to business partners, and at 25, they run Hungary’s largest student discount network. Among the Sharks, those not among their tens of thousands of TikTok followers could also get to know Miklós László and Fanni Gyarmati. Miklós László, one of the founders of Diverzum, summed up the past seven or eight years of his career:

“One moment, we were sent out together from Biosóra, and the next moment we are appearing on TV in front of two million people.”

The fact that the South American scholarship program was not the most exciting part of Miklós’ youth also says much about this period. We talked to the two young founders in Jókai Street in Pest, in front of a random but smiling backdrop, in the former MSZP headquarters, at the former presidency level.

It works like this

Diverzum offers discounts to students through its partners. You must register on the site and prove that the user is still a student (by “presenting” the student ID). As soon as we are satisfied with this, the discounts are available: there are typically 10-25% price discounts on the site. There are very beneficial, but briefly available so-called lightning discounts too. There are brands on the site, such as Puma, Don Pepe, Ecipő, ShareNow, New Balance, Dorko, Notino, and the Bubbles laundry network – so the selection is very mixed. Diverzum is free for students; the company earns a 10% commission from its partners.

“We started the project with an electrical engineer friend, Bálint. I paid €6.53 for the domain out of my pocket, and we paid €27 monthly for the server,” said Miklós.

The founders built the domestic system based on their experiences in Northern and Western Europe. Miklós attended the University of Exeter and participated in an exchange student program in Spain. Fanni started university in Hungary and participated in an Erasmus program in Norway.

“In Western Europe, it is a rule that there is a student discount for almost everything. In Hungary, we could only meet this in museums and maybe in the Turkish restaurant before Diverzum,” said Miklós.

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He was already fascinated by the stories about the startup of big tech companies when he was still in school. As a teenager, he read a biography of Steve Jobs, and at university, he scaled his ideas at startup competitions, but his entrepreneurial spirit was not enough then.

“There is a businessman in the family, but there is no entrepreneur, and there was still little entrepreneurial spirit back then. Others said it is better to start working for a big company because I can learn the ins and outs of business life and later start my own business. I interned at several multinationals but realized that being a true entrepreneur requires a completely different kind of knowledge. To build a startup, you need more determination than an idea,” he said.

Fanni’s parents are entrepreneurs, and she, too, saw this path before her in childhood. But she had to travel to Norway for the idea.

“During the exchange student program, I noticed how different Norwegian student life is from Hungarian. At first, I shared my experiences on TikTok, which reached many people, and every day I received feedback that the videos motivated them to go to Erasmus. I came home, and we started talking with Miki, who had similar experiences during this period,” she said.

Finally, in November 2021, the Hungarian student discount network, Diverzum, was launched. Miklós left his master’s degree in Amsterdam because of the business.

“It was the best decision of my life, but it was difficult for the family, and I wouldn’t encourage anyone to do it. We learned ten times more here than in any master’s program,” he said. The parents have since reconciled.

They did not ask for the investment.

In the first months, they didn’t invest more money in the business, but the word of the site started to spread among the students.

“We had no money, the site didn’t always work properly, there were hardly any brands, but despite the many problems, we received a lot of positive feedback,” recalled Fanni of the beginning. They couldn’t spend on marketing but took advantage of the Tiktok experience.

They only won €400 at their first joint startup competition; the real breakthrough had to wait until May: they returned home from the MVM Edison competition with €13,000. At the time, Miklós was still running the project as an individual entrepreneur, but joint money management was simpler in a partnership, so they founded Diverzum Europe Kft in June. MVM Future Lab would have also entered with a seed capital of €130,000, but this was not accepted.

“In the end, we chose other investors. Swedish businessman Torkel Fagrell, angel investor Barbara Verő, and MKB Fintechlab. This was a big step forward,” said László.

They can filter out abusers.

As the site expanded, the founders found it increasingly difficult to handle the massive influx of student ID photos.

“Miki and I reviewed 55-60,000 student ID cards individually, and the photos were immediately deleted. Today, all you have to do is enter your student ID number, which we run through a central database, and from that, we know if it’s valid. We store the number, and based on this, we run the check repeatedly every six months. We also have tools to filter abuse when using discounts,” said Fanni.

Data protection is also why only students over 14 can register on the site. Younger ones should be asked for parental permission. They still reach their leading target group, the university age group.

“We feel that it is more comfortable for companies to operate the student discount with an age limit of 14.”

The Tiktok secret

Diverzum’s website is already running, but the mobile application must still be ready. For this, the founders sought an investor among the Sharks, and their story convinced Petya Balogh the most. The investor offered €5200 and a €2600 mentoring program in exchange for 7% of the company.

“If we were to contract a development company, setting up a mobile application would cost twice as much. In the case of a large company, it is one and a half times as much, but in the case of a startup, it can easily come out of that amount, or even less,” said Miklós.

At first, all the sharks would have entered Diverzum, but the founders felt their offer needed to be better. Balogh, on the other hand, saw in them what the others did not, so he reduced his offer to 7%.

“Anyone who can build new channels and engagement towards young people will be valuable to global brands that want to address their young adult, new regular customers,” according to the investor.

The other decisive aspect of why he did not let go of the hands of Diverzum was the rapid growth. Miklós and Fanni said in December that 70,000 students use the application, but by the beginning of February, the number of registrants approached one hundred thousand. The rapid spread is significant because both consciously manage their social media platforms.

“Our followers have followed our progress over the past year. We currently have two TikTok channels, one with nearly 20,000 followers and the other with 26,000 followers. We have a video that a million people have seen,” said Fanni.

In January, the traffic picked up, exceeding December by 31%. In addition to TikTok videos, they also try to draw students’ attention with marketing actions. For example, they distributed 1,500 condoms on one occasion. Later, they would also like to cooperate with Durex.

The book fair is just around the corner.

Diverzum currently cooperates with 43 brands. The 10% commission is average; there are places where it is lower.

“In the case of Munch or This is Redy, our commission is a fraction of 10%,” said Miklós. In the case of the food rescue Munch, the discount offered by the application is increased by an additional 10-15%, and brands that already offer student discounts are also included in the offer.

The average consumer usually spends €50; the most significant turnover is made through food ordering applications.

.”Regarding frequency, products with a low basket value dominate, such as shopping and ordering food. On the other hand, based on value, electronic products, and festivals take the prize,” said Miklós.

However, the largest income comes from categories with a medium basket value, such as fashion and nutritional supplements.

The students have spent €300,000 through the site so far. The food delivery and rescue sector and electronics stores are already a well-proven source for Diverzum, so further collaborations are planned in these areas. Fanni also mentions the book market, and both smile suspiciously at the mention of Líra and Alexandra.

“For these three categories, involving a partner involves the most work because, for these product categories, cooperation is more of a commercial decision than a marketing decision. Olvas.hu and Maxim Kiadó are already cooperating with us, and recently HVG Könyvek joined,” said Miklós, but he could not yet give details about the current negotiations.

The radar has crossed the border.

In Petya Balogh’s investment of €25-50,000, the fact that the two young people would set foot in other regional countries also played a prominent role. After the stabilization of the Hungarian team, they want to build a network of student discounts in other countries. Moreover, they are preparing for married life.

They assessed the coverage of e-commerce in the neighboring countries and the number of students and conducted market research.

“At the end of the summer, we will reveal which country will be the next destination. I can only say that we will remain in Central and Eastern Europe and will not merge with other companies, ” said Miklós.