Startupbootcamp – Melbourne FinTech Demo Day

Taking its cue from some of the economic effects of the current pandemic, the latest Startupbootcamp Melbourne FinTech virtual demo day adopted the theme of  financial health and well-being. When reduced working hours and layoffs revealed that many that people did not have enough savings to last 6 weeks, let alone 6 months, lock-down and furlough have not only put a strain on public finances, they have also revealed the need for better education on personal finance and wealth management. Meanwhile, increased regulation and compliance obligations (especially in the areas of data privacy, cyber security and KYC) are adding huge operational costs for companies and financial institutions. And despite the restrictions and disruptions of lock-down, the latest cohort of startups in the Melbourne FinTech bootcamp managed to deliver some engaging presentations.

Links to each startup are in the names:

Datacy

Datacy allows people to collect, manage and sell their online data easily and transparently, and gives businesses instant access to high quality and bespoke consumer datasets. They stress that the data used in their application is legally and ethically sourced. Their process is also designed to eliminate gaps and risks inherent in many current solutions, which are often manual, fragmented and unethical. At its heart is a Chrome or Firefox browser extension. Individual consumers can generate passive income from data sales, based on user-defined permissions. Businesses can create target data sets using various parameters. Datacy charges companies to access the end-user data, and also takes a 15% commission on every transaction via the plugin – some of which is distributed to end-users, but it wasn’t clear how that works. For example, is it distributed in equal proportions to everyone, or is it weighted by the “value” (however defined or calculated) of an individual’s data?

Harpocrates Solutions

Harpocrates Solutions provides a simplified data privacy via a “compliance compliance as a service” model. Seeing itself as part of the “Trust Economy”, Harpocrates is making privacy implementations easier. It achieves this by monitoring and observing daily regulatory updates, and capturing the relevant changes. It then uses AI to manage a central repository, and to create and maintain tailored rules sets.

Mark Labs

Mark Labs helps asset managers and institutional investors integrate environmental and social considerations into their portfolios. With increased investor interest in sustainability, portfolio managers are adopting ESG criteria in to their decision-making, and Mark Labs helps them in “optimising the impact” of their investments. There are currently an estimated $40 trillion of sustainable assets under management, but ESG portfolio management is data intensive, complex and still emerging both as an analytical skill and as a practical portfolio methodology. Mark Labs helps investors to curate, analyze and communicate data on their portfolio companies, drawing on multiple database sources, and aligning to UN Sustainable Development Goals. The founders estimate that there are $114 trillion of assets under management “at risk” if generational transfer and investor mandates shift towards more ESG criteria.

MassUp

MassUp is a digital white label solution for the property and casualty insurance industry (P&C), designed to sell small item insurance at the consumer point-of-sale (POS).
Describing their platform as a “plug and sell” solution, the founders noted that 70% of portable items are not covered by insurance policies, and many homes and/or contents are either uninsured or under-insured. MassUp is intended to simplify the process (“easy, accessible, online”), and will be launching in Australia under the Sorgenfrey brand in Q2 2021. For example, a product known as “The Flat Insurance” will cover items in and out of your home for a single monthly premium. As MassUp appears to be a tech solution, rather than a policy issuer, underwriter or re-insurer, I couldn’t see how they can achieve competitive policy rates both at scale and with simplicity (especially the claims process). Also, as we know, vendors love to “upsell” insurance on tech appliances, but many such policies have been seen to be redundant when considering existing statutory consumer rights and product warranties. On the other hand, short-term insurance policies (e.g., when I’m traveling, or on holiday, or renting out my home on AirBnB) are increasingly of interest to some consumers.

OnTrack Retirement

Ontrack provides B2B white label digital retirement planning solutions for financial institutions to help their customers in a more personalised way. There is a general consumer reluctance to pay for financial advice, but retirement planning is deemed too complicated. Taking an “holistic” approach, the founders claim to have developed a “best in class simulation engine” – founded on expected retirement spending priorities (rather than trying to predict the cost of living in 20 years’ time). Drawing on their industry experience, the founders stated that a key challenge for many financial planning providers is getting members comfortable with your service. I would also add that reducing complexity with cost-effective products is also key – and financial education forms a big part of the solution.

In Australia, the past 10 years has seen a major exit from the financial planning and wealth management industry – both at the individual adviser level (higher professional qualification requirements, increased compliance costs, and the end of trailing sales commissions in favour of “fee for advice”); and at the institutional level (3 of the big 4 banks have essentially withdrawn from offering financial planning and wealth management services). At the same time, there have been a number of new players – including many non-bank or non-financial institution providers – offering so-called robo-advice and “advice at scale”, mainly designed to reduce costs. In addition, the statutory superannuation regime keeps being tweaked so it is increasingly difficult to plan for the future, with the constant tax and other changes. Superannuation (a key success story of the Keating government) is just one of the “pillars” of personal finance in retirement: the others are the Commonwealth government aged pension (means-tested), personal wealth management (e.g., investments outside of superannuation); and retirement housing (with the expectation of more people opting to remain in their own homes). I would also include earnings from part-time employment while in “retirement”, as people work longer into older age (either from choice or necessity) – how that aligns with the aged pension and/or self-funded retirement is another part of the constantly-shifting tax and social security regime.

Plastiq.it

This product describes itself as a customer data platform that powers stored value, and was described as a “Safe harbour” solution (I’m not quite sure that’s what the founders meant in this context?). According to the pitch, consumers gain a fair and equitable outcome (consumer discounts), while retailers get targeted audiences. The team have created a vertically integrated gift card platform (working with MasterCard, Apple Pay and GooglePay), and launched JamJar, a cashback solution.

RegRadar

Similar to Harpocrates (above), RegRadar is a regulatory screening platform that helps companies “to set routes and avoid crashes”. The tool monitors regulatory changes (initially in the financial, food and healthcare sectors) and uses a pro-active process to developing a regulatory screening strategy, backed by analysis and a decision-support tool.

Having worked in legal, regulatory and compliance publishing for many years myself, I appreciate the challenge companies face when trying to keep up with the latest regulations, especially where they may be subject to multiple regulatory bodies within and across multiple jurisdictions. However, improved technology such as smart decision-support tools for building and maintaining rules-based business systems has helped enormously. In addition, most legislation is now online, so it can be searched more easily and monitored via automated alerts. Plus services such as Westlaw and Lexis-Nexis can also help companies track what is currently “good” or “bad” law by tracking court decisions, law reports and legislative updates. 

Next week: Goodbye 2020

Steam Radio in the Digital Age

A few years ago, I wrote a blog on how radio had come of age in the era of social media. And despite podcasts and streaming services making significant inroads into our listening behaviour, radio is still with us. Plus it now gets distributed via additional media: digital radio (DAB), internet streaming, mobile apps and digital TV.

Image sourced from flickr

Most mornings I get my first information hit from the radio. Likewise, the midnight radio news bulletin is usually the last update of the day. When I’m on my way to or from the office I’m either catching up on a podcast or streaming radio, via TuneIn or dedicated station apps.

I particularly enjoy the BBC’s catalogue of on-demand content – both contemporary material, and archive programmes. There’s something inexplicable about the appeal of listening to 50-60 year old recordings, themselves being dramatisations of books and plays first published 100 years or more earlier.

The main reason I turn to these relics of steam radio is because I can curate what I want to listen to, when I want to listen. These programmes are also an antidote to much of what gets broadcast on commercial radio stations, which I find is mostly noise and no substance. (Blame it on my age, combined with being a self-confessed music snob.)

Most of these archive radio recordings still work because of two things: the calibre of the material; and the high production values. The former benefits from tight script editing and strict programme lengths. The latter is evident from both the engineering standards and the sound design.

One of the paradoxes of modern technology is that as the costs of equipment, bandwidth and data come down (along with the barriers to access), so the amount of content increases (because the means of production is much cheaper) – yet the quality inevitably declines. And since in the internet era, consumers increasingly think that all online content should be “free”, there is less and less money to invest in the production.

The importance of having a high level of quality control is inextricably linked to the continued support and funding for public broadcasting. With it, hopefully, comes impartiality, objectivity, diversity and risk-taking – much of which is missing in commercial radio. Not that I listen very often to the latter these days, but it feels that this format is destined to increased narrowcasting (by demographic), and parochialism.

In this era of fake news and misinformation (much of it perpetrated and perpetuated by media outlets that are controlled or manipulated by malign vested interests), and at a time of increased nationalism, divisive sectarianism and social segregation, it’s worth remembering the motto of the BBC:

“Nation shall speak peace unto nation”

Notwithstanding some of the self-inflicted damage that the BBC has endured in recent years, and the trend for nationalistic propaganda from many state-owned news media and broadcasters, the need for robust and objective public broadcasting services seems more relevant than ever.

Next week: Craft vs Creativity

 

 

 

 

 

 

 

 

 

Startup Victoria – Best of the Startup State Pitch Night

In support of Victoria’s reputation as “Australia’s Startup State”, last week’s Startup Victoria pitch night was designed to showcase four of the best local startups. Hosted by Stone & Chalk, the judges were drawn from Mentorloop, Brosa, Giant Leap Fund, Rampersand and Vinomofo.

The pitches in order of presentation were (website links embedded in the titles):

Code Like A Girl

Founded four years ago, Code Like A Girl’s stated mission is to bring greater gender diversity to the ICT sector (information and communications technology), within both the industry and education spheres. To do this, the founders say we need more female coders, which they plan to achieve via coding camps, internships, and community events. Positioning itself as a social impact enterprise, the business is active in four States, and 75% of interns are placed into full time roles.

To support the ongoing development of its “role ready” value chain and to prepare for possible overseas expansion, Code Like A Girl is seeking $1.5m in seed funding. Currently piloting the training model via education providers (RTOs, boot camps, universities, online code schools), the business takes a 10% commission on courses sold (held twice a year), plus it charges placement fees of $2k per person.

But the model is difficult to scale, especially as Code Like A Girl does not own or create the actual training content – it is acting as a sales channel for third party courseware, and providing platform for advocacy, engagement and influence. Its key metrics are based on things like social impact scores – such as 30% of kids return to boot camps. The panel felt that the community platform is a huge cost centre, and it might be preferable to try a TedX model, where Code Like A Girl provides branding and foundational support to build more of a network effect – but without its own curriculum, the business will still struggle to scale.

Seer Medical

The business claims to make epilepsy diagnosis easier, and is currently raising $14m for European expansion (UK & Germany). To improve current diagnosis, the model needs to capture time series data to distinguish epilepsy from other conditions, but do so faster, cheaper and more efficiently than current processes. Founded in 2017, Seer has already serviced more than 1500 patients via 200 clinicians.

Using the Seer Cloud infrastructure,  it can achieve diagnostic outcomes 10x faster than traditional methods, and the platform is using machine learning to train its algorithms. The service is subject to Medicare reimbursement, which has no doubt assisted adoption.

Asked by the judges if the platform could be used to diagnose other conditions, the founders mentioned cardio, sleep and other health domains. As for competition, this comes mainly from the status quo – i.e., hospital based services. With advocacy from neurologists, giving them access to customers, the founders have a strong track record in the research field, which helps to open doors with clinicians. Along with research partnerships, plus the public health cost reimbursement, data is the fuel of the business –  Seer even have access to some third party data on which to train their diagnostic.

Liven

A dining rewards app, Liven is also bringing a behavioral gamification layer to a real world use case. Currently, there is a poor linkage between loyalty programmes and gamification. So, Liven has launched a universal reward token (the LVN token) for use in a digital/real world context.  The details were scant, and the status of the LVN token sale is unclear, but it seems users can earn LVN tokens from completing certain “missions”. The token (using a standard ERC 20 token format on the Ethereum blockchain), is designed to be interoperable and fungible (but Liven does not yet appear to use blockchain in its end user app or merchant point of sale solution).

The said merchants pay a 10-25% commission on app-based sales, of which upto 40% is paid back to the end user in the form of LVN tokens – if I got the maths right, Liven itself is securing $15 profit on every $100 of sales. Currently only available in Melbourne and Sydney, the judges wanted to know what the appeal is to merchants. According to the founders, users typically spend more in an average transaction when they use the app. It also seems that the app only works in brick and mortar restaurants, cafes and bars. The path to scaling will be via channel partners such as PoS systems.

Although not yet deployed, in future, it was suggested that users will be able to pay in any crypto – which raises all sorts of questions about the tokenomics of the LVN token, and whether LVN will be subject to exchange rate volatility (and even token speculation) or act as a stable coin; if the latter, what will it be backed by or pegged to?

Phoria

Phoria is in the business of extended reality technology (XR). Started in 2014, Phoria was an entrant to the Melbourne Accelerator Programme (MAP), with the stated goal of moving VR into a mobile experience (“democratize VR”).  Having gained some clinical VR research experience, Phoria has since worked on commercial projects such as “Captured” (turning a 3D scan of a building or structure into a Digital Twin), “Rewild Our Planet” (a Singapore-based AR experience), and various art installations museum exhibits.

Phoria is commissioned by tech and media brands to create XR content. It has developed a SaaS model, whereby it can turn real space into virtual space (“virtualising internal space”).

The judges wondered where we are along the cycle of mass adoption vs peak hype. In response, the founders mentioned that the first wireless headsets are now available, although consumer-facing mixed reality hardware is still 3-5 years away. With a growing customer base in engineering and architecture applications, Phoria’s main focus is on spatial information.

After the votes were counted, the People’s choice was Seer Medical, who also won the overall prize.

Next week: 30 years in publishing

Demo Day #1 – Startupbootcamp

Energy and climate change are proving to be hot topics in Australia’s federal election campaign. Not surprising, given that proposed changes to current policy settings brought down the last Prime Minister. With that in mind, it was impressive and refreshing to hear what founders participating in the latest Startupbootcamp Energy Australia accelerator program had managed to come up with over the course of 12 weeks. The 10 projects presenting at this month’s Demo Day offered a range of solutions that our political leaders and their advisors might want to acquaint themselves with.

The pitches in alphabetical order were (websites links embedded in the names):

Builtspace

The challenge for many commercial building owners is that their facilities managers lack full visibility into the physical design and fabric of the infrastructure they are responsible for. And much of the in-house knowledge literally walks out the door when staff leave. Builtspace has developed a SaaS platform that creates a “digital twin” of each building, managing everything from the asset condition to real-time maintenance transactions, all connected in the cloud. Claiming to reduce ticket backlogs to deliver a 75% productivity gain, and a 5x ROI, including increased energy efficiency, the founders are currently looking for re-sellers in Australia, and are in the process of raising Series A funding.

Ecologic

A home energy audit app that offers tailored advice at scale, Ecologic uses cloud-based simulations to deliver proposed energy efficiency solutions and enables users to connect to appropriate suppliers. The team has identified that the combination of a lack of independent information, unknown costs (and limited finance) and inadequate service co-ordination creates a barrier to adoption for many consumers. In addition, consumers need simple and actionable insights. Currently generating referral fees and sales commissions, the founders are investigating a subscription model for Uber-style consultations, and a white label B2B solution. During the boot camp, Ecologic has obtained 1,500 customer profiles, identified a channel partnership model with a number of local councils, and secured a pilot integrated utility service with Energy Australia. To address the issue of consumers’ access to finance, the founders are exploring a project finance facility, to offer customers zero upfront installation costs, and using the energy savings to pay down the debt.

Elemize

Using a distributed energy model, Elemize claims to have found a solution to Australia’s comparatively high energy bills. Via its LiberPower application, the team are working with property developers and builders to help them install custom renewable energy solutions to deliver “free energy” to their residents and tenants. Part of the solution involves the system taking control of the batteries in each home, to obtain maximum efficiency.

Fohat

One of the problems with domestic-scale solar energy systems is that we can end up with too many solar units – which in turn can, with things like feed-in supply arrangements, cause network and transmission constraints. Fohat aims to solve this problem with a software solution to manage microgrids. With the owner’s permission, the operating system can have visibility over the whole network by taking control of each battery, by directing network capacity to where it is needed, and/or diverting excess supply into designated batteries. The platform also supports energy trading (but not at the level of individual consumers), and has recently secured a pilot with the City of Melbourne to install a microgrid and battery system at the Queen Victoria Market. The startup profile also mentions the use of blockchain technology, but this important aspect was not described during the pitch.

ivcbox

It was a little difficult to understand what this browser-based video chat service was doing at an energy accelerator. But the fact that it only takes a 1.5% sales commission compared to the 22.5% cost of a face-to-face sale, means it should appeal to energy retailers who have encountered greater customer churn due to price comparison sites and increased regulatory transparency on fees and charges. The service uses facial recognition and identity verification, which means the API platform can also be extended to banks and insurers.

Nostromo

Nostromo has developed a “world first” modular Ice Thermal Energy Storage system, using a glycerol heat conversion process. Typically, 60% of the peak energy usage by a commercial building is for cooling purposes, yet the peak demand amounts to only 400 hours a year. Designed to support demand side management and storage, Nostromo has secured $5.5m in seed funding, including $1.5m in grants to develop demo solutions.

Powerdiverter

Around 2 million homes and businesses in Australia are already using solar energy. Storing and managing that energy remains a challenge. Powerdiverter is a hardware device that uses electric hot water tanks as energy storage units. It doesn’t require any plumbing or additional electrical work. It plugs into the existing solar system to divert all the surplus energy into the tank. A typical lithium battery solution has a 12-year payback, versus 1.5 years with Powerdiverter. The business model includes device sales (7,000 have already been installed, mainly in the UK), a subscription service and licensing agreements with energy providers.

RedGrid

One of the problems with our current electricity network is that it is built on “imposed” grids, not coordinated intelligent devices. This means an overloaded grid, and high energy costs. RedGrid aims to solve this, with a Platform-as-a-Service model, where every smart device will have machine-to-machine communications, delivering energy on demand capability. This so-called “Internet of Energy” is constructed on a decentralised demand management solution that is private, scalable and secure. The team is currently focused on universities and facilities management, as well as consumer markets, and are planning a crowd funding equity raise.

Senno

In an era of growing concern about how social media platforms and other service providers harvest, trade (and compromise) our personal data, an increasing number of Blockchain-enabled solutions are using things like self-sovereign digital identity and attention economics to put consumers in control of their own data, and empower them to monetize these assets. Senno is using digital wallets to help owners secure their personal data and to determine who has access to it, in return for specified rewards. Where does this fit into the energy market? Well, Senno proposes to share (non-personal) data and consumer behaviour on energy usage with retailers, in return for a share of the revenue derived from the metadata, under a SaaS model.

UCapture

According to the founders, consumers want to reduce their carbon footprint, but they don’t want to pay to do so, they are reluctant to change their behaviours, so they need incentives to do so. Using a browser extension (Chrome and Firefox), UCapture enables consumers to shop online at participating retailers and “earn” carbon credits in return. Consumers can also receive coupon codes. UCapture receives a sales commission on each transaction, and allocates 2/3 of the commission to carbon offset projects. (While unexplained during the pitch, it seems that each purchase is calibrated to an equivalent amount of carbon offsets – whether that is based on the ticket price, or the actual carbon footprint of each item is not immediately clear.)  UCapture is enabling corporate clients to batch install the extension on their networks, allowing their employees to participate. On the positive side, UCapture is giving consumers indirect access to carbon credit schemes which are often only available to wholesale participants. On the negative side, it does seem incongruous to be encouraging consumers to spend more and to buy more stuff, in order to save the planet.

Next week: Demo Day #2 – Startmate