Leigh Dunsford, a fintech entrepreneur who co-founded Waddle and later exited to Xero for $80 million, is just a month away from launching his latest venture, a money app known as Nine25 that is aiming to boost the wealth creation habits of Gen Z investors.
The micro-investment platform, which raised $1.5 million from a seed round last year and is currently undertaking a Series A totalling $2 million, is a multi-purpose investment app that Dunsford says is unique in the market.
“Nine25 Invest is another step toward our vision of building a cohesive set of tools that would automate every aspect of money within a single app,” says Dunsford, who sees an opportunity for customers to build long-term wealth through ‘thematic portfolio micro-investing’.
While Nine25 will deliver opportunities for direct investment in ETFs (exchange traded funds), it also will allow customers to transact cash within their portfolio in a manner akin to a bank account.
“The reason we did that was because we are bringing in automated management tools to the app in the first and second quarters of next year,” Dunsford tells Business News Australia.
“Those management tools will not only let customers send cash to their account but also allow them to manage bills.”
Dunsford, who established Waddle in 2014 with former schoolmates Nathan Andrews and Simon Creighton, has been working on Nine25 for the past three years.
Waddle, a commercial lending platform that enables invoice financing to be completely automated for business owners, was sold to accounting software giant Xero in 2020 for $80 million and earlier this month was snapped up by Commonwealth Banking Corporation (ASX: CBA) for an undisclosed amount.
Initially self-funded by Dunsford and supported by one of his early Waddle angel investors, Nine25 was developed from an idea that leveraged off the Waddle business model.
“Three years ago, we started building a single product, a wage-access platform linked to an employer’s payroll system that would allow people early access to their earned wages,” Dunsford says.
After hitting hurdles with that concept, which was aimed at improving Gen Z investment and savings habits, Dunsford says he pivoted to improve people’s behaviours further up the chain by ‘incentivising them to save, invest and build wealth’.
“We started out as a single product with a single purpose, but we evolved into a multi-product money app and the investment product we are launching (next month) is one of many that we are planning to release,” Dunsford says.
Nine25 is targeting Gen Z and early Millennials with plans to boost their savings and investment habits through gamification tools that it plans to introduce early next year.
“That’s where we want to get started, to get our customers to benchmark themselves against their friends,” Dunsford says.
“There is a big issue in Australia with young people not getting on that pathway to savings and wealth. We don’t want them to get to 30 and decide then that they need to start. I don’t know anyone I have spoken to that didn’t wish they started investing earlier.”
Nine25 aims to simplify the investment journey for customers who may be confused by the multitude of high, medium and low-risk options available in the market.
“There are thousands of ETFs already in the market and dozens of different portfolios that can paralyse young investors with choice,” Dunsford says.
“We set out 12 months ago to put together curated portfolios involving industries, movements or emerging markets that resonated with our customers, such as robotics and AI, while mixing that with stable, solid returns from a hedging strategy with gold and silver, for example, which is in one of our portfolios called Bling.
“So, we ask our customers what they believe in? Do they believe in the future of robotics or AI or are they into healthcare and want to invest in emerging health tech companies - or do they want to get the best blend of Australian and US equities (via ETFs) and put together a big tech portfolio?
“Young people immediately resonate with those themes in the investment world.”
Nine25 currently allows investments of up to four portfolios on its app, but it plans to expand this to 14 as more options are released, based on feedback from customers.
The investment portfolios presented by Nine25 typically comprise multiple ETFs within a single portfolio, adding to the diversity of the investment.
“We have curated these portfolios to the Net Zero Asset Manager initiative as well, so that takes the guesswork out of it for our younger audience,” Dunsford says.
The product is currently going through the final stages of development, but the past 12 months have been spent developing the investment portfolios and satisfying regulatory requirements for the business.
“Cache is the infrastructure provider that manages the administration and funds management side of the business, while Nine25 remains responsible for curating the investment options for the platform,” Dunsford says.
Cache founder Caleb Gibbins says the launch of Nine25 is the culmination of a 10-month collaboration with Dunsford and his team.
“The team have their finger on the pulse both in terms of what Gen Z investors are looking for and their unique approach to investing. I genuinely believe we have a winning formula on our hands,” Gibbins says.
Nine25 plans to go live in mid-October ahead of building on the investment offering and gamification features of its app over the next year.
Dunsford says the company for now plans to focus solely on the Australian market, where he sees a big opportunity for the app.
“We are talking about 11.5 million people in our target range, so there’s a lot of work to do before we even contemplate going international.
“The product road map also has many more products coming, so in terms of us becoming a multi-product platform this will lead us to be a multi-asset investment platform.
“We envisage in the future that this will include major portfolios, share trading, savings accounts and the like – anything to do with people wanting to portion their money from their primary bank account and get access to high-yield accounts. That is where we see our platform going and that resonates with our target market.”
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