The FF17 Semi Finals in Melbourne

As part of the recent Melbourne Startup Week, Next Money hosted the Melbourne heat of the FF17 pitch contest, to decide which local FinTech startup will compete at the FF17 finals in Hong Kong later this week.

screen-shot-2017-01-15-at-8-15-03-pmAt the outset, I should declare an interest, as I myself was one of the pitch contestants, but hopefully that doesn’t preclude me from commenting on the event. The competing startups were as follows (as listed on the event Meetup page):


This payments solutions provider has featured in my blog before. Since the last time I saw AirWallex pitch, the market for cross-border remittance and payment solutions has drawn a lot of attention. First, the growing opportunity for exporters to market products and services to Chinese consumers and tourists means that payment platforms like AirWallex (and others like Novatti, LatiPay and Flo2Cash) are partnering with Chinese payment gateways such as WeChat Pay, AliPay, JDPay and Union Pay). Second, cross-border remittance services has become a key use case for Bitcoin and other digital currencies (as evidenced by the recent partnership between Novatti and Flexepin).

Analyst Web

Still in private beta, Analyst Web is aiming to disrupt the market structure (and payment model) for equity research. By enlisting qualified CFAs to write bespoke investment reports on listed companies, then distribute them via subscription services, Analyst Web claims to be bringing quality, objectivity and value for money to this investor service. Currently, investors have to rely on either brokers (who may offer “free” reports to their clients under soft dollar arrangements) to provide research on individual stocks; or subscribe to independent research houses (such as Morningstar). Typically, neither brokers nor the research houses cover the full market – tending to focus on the bigger stocks and those included in benchmark indices. Of course, companies themselves use investor relations services to issue commentary on their market performance and prospects, but these communications perhaps lack objectivity. There are also other models, such as the ASX Equity Research Service, whereby research providers are “sponsored” by the stock exchange to provide reports on qualifying companies to boost market coverage. Some of the challenges Analyst Web will need to overcome are: investor willingness to pay for research; market credibility and acceptance of their reports; and sustainable financial models that appropriately compensate the analysts without compromising independence and objectivity.


Proviso has also been mentioned in my blog before, and they continue to impress with their solution to take friction out of the documentation processes for loan origination, and their ability to secure more financial institutions as clients. In my previous commentary, I noted that Proviso risked being disintermediated by an industry-owned utility. While I still think that is a possibility, I also see that the combination of Blockchain solutions (for distributed ledgers and bank data feeds) and more open APIs for financial data and account information may mean that customers themselves may be empowered to drive the process, since it will be easier for them to demonstrate their creditworthiness and establish their cashflow status, but also have better control over the disclosure of their data.


DragonBill, an invoicing solution for SMEs, is yet another of the FF17 contestants to appear in my blog, most recently when they presented at Startup Victoria’s regular pitch night. In addition to offering both direct payment and escrow options for micro-businesses and sole traders, DragonBill continues to mine an interesting niche market among sports clubs and associations – the reason being that many club members are themselves sole traders. As part of its future developments, the business is scoping a solution to help clients manage their superannuation obligations, and to provide informed advice on cashflow management.


Similar to Proviso, BreezeDocs is a document automation solution for lenders, although currently focusing on mortgage origination. And like Proviso, at the heart of the solution is the ability to streamline the extraction and processing of data from customer documents. On top of a core OCR capability, BreezeDocs also claims to be using machine learning to train their systems on different document types, formats, structure and content. Despite the use of ETL processes within financial institutions, the disparate nature of financial products and documentation; the way customer, product and transaction data is often maintained in different systems; and the fact that customers will often have accounts and products with different providers can undermine the need for standardised processes.


As I commented in my previous blog, equity crowding may be about to come into its own as a way to connect investors with entrepreneurs and startups. Vestabyte are certainly enthusiastic exponents of this method for raising capital, but legal constraints mean that their platform still has to operate under a unit trust model, rather than offering access to investments in the form of direct shares in specific assets, companies or ventures. This may change if the proposed legislation can get through Parliament, although it’s far from being a done deal. But in the absence of formal legislation, it sounds like a great opportunity for a FinTech startup seeking funding to test ASIC’s first licensing exemption under its sandbox regime….


By their own admission, coHome is very much a nascent business – one that is still defining its customer offering. At its heart, this shared ownership service provides a matching service for aspiring property owners, along with some standard documentation for a co-ownership agreement, known legally as a tenancy in common. With multiple parties to the property transaction and mortgage application, coHome aims to streamline the process, make it easier for buyers to connect with other interested parties, and provide customers with appropriate legal safeguards. It’s clearly an admirable objective, and one that deserves to gain attention. But monetizing the service may prove challenging, unless coHome takes a commission from the mortgage providers, lawyers and conveyancers?


Not strictly speaking confined to the FinTech sector, nevertheless BugWolf, a tool for managing user-acceptance testing, has managed to gain traction with at least one of Australia’s Big 4 banks. Using gamification, competitions and other techniques to recruit, engage and manage teams of testers, BugWolf claims to support all aspects of functionality testing across software, websites and mobile apps. Combined with robust reporting and analytics, BugWolf can also help clients achieve shorter product development cycles.

Brave New Coin

I joined the team at Brave New Coin (BNC), a provider of market data for digital assets, in early 2016. So, it was the first time I have pitched, outside of hackathons, client presentations and sales conferences. And the fact that BNC was a last-minute confirmation for this event made it an even more interesting experience. Established about 3 years ago by a team of founders with an interesting mix of publishing, Bitcoin and full stack development experience, BNC has built a suite of data APIs (market prices, indices, exchange rates and analytics) for Bitcoin and most other crypto-currencies and Blockchain assets. While the APIs are typically used by developers, the growing interest in digital assets among brokers, investors and asset managers means that market data on these new asset classes is in demand, and BNC is busily building distribution partnerships and subscription deals with traditional brokers, market data vendors and exchanges. Recent price fluctuations for Bitcoin may suggest continued speculation in this currency, but the launch of investable and tradeable products such as CFDs, futures, ETFs and other derivatives also suggest that digital assets are starting to achieve broader market acceptance.


Unlike other solutions to defeat hackers and hoaxers (e.g., anti-virus software, spam-filters, VPNs and proxy servers), BankVault uses virtual machine technology to protect customers’ bank details when they transact online. This means a “new and instant” machine is created for one-time use only, each time a customer launches the BankVault service. Offering both individual subscriptions and enterprise solutions, the business is in the process of launching in the USA.


The winner, based on the judges’ votes, was BugWolf, which came as something of a surprise to a number of the other contestants, myself included. Without wishing to sound churlish, this event was supposed to be about the future of finance (hence FF17…), so it would seem reasonable that the winner would be based in FinTech (as opposed to TechTech?). The result (although highly deserved and based on an impressive pitch), also reinforced my sense that this event did not draw the “usual” FinTech or startup audience in Melbourne, based on the many pitch nights and meetups I have attended over the past few years. From my perspective, neither was it an investor audience, nor a capital markets audience, meaning I wasn’t really sure who I was pitching to. I’m hoping that the organisers will reflect on this event, and look to make some changes for next year.

Next week: A few rules on pitching

#FinTech Melbourne’s latest #pitch event

The latest FinTech Melbourne meetup event was the second of their pitch nights. Co-hosted by NAB (at their Docklands Arena venue) and Capgemini (who were promoting the World Retail Banking Report 2016), the pitches were preceded by a panel discussion on a regulatory sandbox for Fintech startups.

The list of contenders.... (Photo By Andrew Lai, sourced from Meetup)

The list of contenders…. (Photo By Andrew Lai, sourced from Meetup)

The panel was composed of Ben Heap from H2 Ventures, Deborah Ralston from the Australian Centre for Financial Services (who is also the inaugural Chair of ASIC’s Digital Finance Advisory Committee), Sudhir Pai (CTO at Capgemini), and NAB’s Todd Reichmann. This is a topic that FinTech Melbourne has aired before, but it seems despite much industry anticipation and some cautiously positive noises from government, bureaucrats and regulators, there are still, to date, no concrete developments or proposals.

I fully understand the need for formal regulation in financial services, and FinTech in particular, to support investor protection, foster market confidence and maintain industry stability. But the cost or burden of compliance can act as an inhibitor for innovation and entrepreneurship. And of course, regulation and compliance are no guarantees that nothing will ever go wrong, even among our established and highly regulated financial institutions. The debate needs to move on to some practical solutions – such as ring-fencing FinTech startups so that they can trial new products and services in the market, within a limited, defined and narrowly permitted scope and range of activity, under some sort of provisional permit prior to obtaining fully licensed status.

Some members of the panel were in favour of a principles-based regulatory framework (e.g., focus on outcomes and intentions, rather than a reductive model, where nothing is allowed unless it is expressly permitted). The problem with this is that the industry already has to work within a very broad definition of what constitutes “financial advice” that is subject to regulation. So there needs to be a further re-think about what “financial advice” means, especially as between retail, sophisticated and institutional investors; and in turn, I see an opportunity for a more variegated approach to licensing or regulating different advice models: e.g., face-to-face and custom financial planning; scaled and personalised robo-advice; or broader, generalised “class” or “category” advice (by product, platform or service type). (Analagous models to draw on already exist in the areas of therapeutic goods licensing and food labelling measures.)

The panel also thought that partnerships between FinTech startups and established licensees offer one way to navigate the regulatory regime. And I can see that the right type of roboadvice could bring truly independent and objective financial advice on product and brand selection.

There was also a suggestion that the sandbox model could act as an umbrella entity for FinTech innovation. While there may be some merit in the idea (e.g., for regulating the API’s that provide access to customer financial data and credit history – although these should already be adequately covered by data protection and privacy requirements), I am sceptical of regulators’ ability to innovate. Plus, the key retail investor failures during the GFC were about investor ignorance, not just “poor”advice; so the need for financial literacy cannot be overstated.

On to the pitches themselves, which were judged by Ben Heap, Deborah Ralston and Rohen Sood from Reinventure:


Offering an automated finance layer for the Internet of Things, Smartbit has already built a secure, Blockchain-backed price index. The goal is to enable automated, real-time payments, between any two devices connected to the internet. They see themselves as the “Blockchain of Things”, and proceeded to give a cute (if somewhat pointless?) live demo of switching on a LIFX bulb with a Bitcoin payment token.

The judges were curious to know what the actual use case was (apart from turning on light bulbs…). In reply, they were told that Smartbit can deliver real-time settlement (unlike the 15 minutes delay of an US competitor), and is designed to support micropayments. Personally, I think the technology is already proven, but the need less so, at least from a B2C perspective. The fact that so many banks, exchanges and clearing houses are exploring Blockchain solutions means that it’s day will soon come when it is not just a “Bitcoin thing”, but will be an integral part of financial services, data solutions and digital asset management.*


This is a smart payments platform to reduce cashflow stress. The main benefit is to shorten the time SME’s have to wait before they get paid. It offers both a secured payment facility (escrow), and an express payment option (e.g., a tradie can get paid as soon as they finish a job).

The chosen paths to market are social media, accountants, business advisors and mentors, and (unusually?) sports clubs. But it becomes clearer when you consider that clubs need to manage multiple, small membership payments; and many members of sports clubs are SME owners, independent tradies and sole proprietors. Dragonbill are also setting up a partnership with Xero accounting software.

The main questions from the judges concerned the ability to scale the business, and whether Dragonbill generates interest on amounts in escrow.


Another version of the peer-to-peer lending platform for SME borrowers, the business model is based on an online auction system where, for as little as a $50 bid, investors can bid on specific loan requests, with risk-adjusted interest rates, that are also determined by the number and amount of competing bids.

Access to traditional SME loans under $500k is increasingly limited as banks need to allocate more risk-weighted regulatory capital to cover their SME exposures, making them an inefficient and expensive use of bank capital.

The Truepillars platform offers borrower and investor dashboards for tracking and portfolio reporting, but the panel were worried that it wasn’t a unique proposition. However, unlike some of their competitors, Truepillars offers loan terms out to 5 years. It would also be interesting if investors (lenders) could build proper fixed income portfolios (by loan duration, yield curve, exposure type, recourse/rollover etc.), and if borrowers could cap the number of, and limit their exposure to, individual bids or lenders/borrowers.


Claiming to be transforming lending, Proviso work with lenders to streamline the submission of borrowers’ financial data and bank statements in support of their loan applications. The prospective borrower logs into their account and gives permission for the lender to access their banking information, but Proviso does not “see”, hold or store the customer data – it merely acts as a pass-through. The goal is to reduce borrower application abandonment, and the service is already being used by 180 financial institutions – generating 60,000 requests per month. The business is being driven by enhanced customer experience, and ASIC directives on more prudent lending processes. In short, they claim to offer better, faster data.

The judges wanted to know how Proviso compares to Yodlee: “we’re local, and less painful to use” was the response – meaning that proximity offers speed and local market knowledge. Finding a market among non-conforming customers, Proviso is also looking at providing validation services. But in my mind, there is a risk that Proviso could be displaced by an industry-owned or regulatory mandated platform or utility (such as the creation of PEXA for real estate conveyancing and settlement.)


With a tag line, “cross-border payments made easy“, this another solution aiming to  transfer money between people, regardless of location, bank, currency, etc. Currently, Airwallex is focussing on Asia Pacific, and is the only Australian holder of a cross-border license to transact in Chinese RMB. It has also integrated with the three largest payment platforms in China – AliPay, WeChatPay and UnionPay, and built an API for e-commerce solutions. Airwallex claims to be faster, cheaper and simpler than the competition, using real-time FX rates.

The panel was naturally curious about how the platform is addressing anti-money laundering concerns and complying with counter-terrorism legislation. In order to offer lower fees than PayPal, and by only taking fees from the FX spreads, Airwallex has to automate the transaction process to achieve mid-market prices – but does the increased automation heighten the risk that the platform can be used for nefarious purposes?

After their deliberations, the judges declared Proviso as the winner – hard to argue with that sort of market traction.

*Note: Declaration of interest – I have recently joined the team at Brave New Coin, a FinTech building market data and infrastructure solutions for Bitcoin and Blockchain.

Next week: #StartupVic showcases the next batch of startup hopefuls


Latest #FinTech Round-Up

The first quarter of 2016 has seen some significant FinTech developments in Australia. It feels the sector has finally “come of age”, at least in terms of government policy, as well as some significant deals. For anyone who may have missed the action, here is a very brief round-up:

FinTech_AustraliaThe formation of FinTech Australia as an umbrella group in late 2015 was seen as an important step in reducing inter-state rivalry. Following its first AGM in March, hopefully it will help the industry to attract further visibility, gain critical mass and co-ordinate the debate around legislation, funding, compliance and regulatory licensing, as well as fostering innovation and collaboration.

At the same time, the Federal Government has established the FinTech Advisory Group composed of some heavy hitters and key influencers. One of the first outcomes has been the Treasury’s response to a number of regulatory changes that the industry is prioritizing.

Having spoken to several members of both the Advisory Group and the FinTech Australia Committee, there is a clear sense that the industry has finally “broken through” to get on the ideas and innovation agenda.

FinTech Melbourne hosted a very interesting Meetup on Women in Fintech, set against the backdrop of the continuing gender diversity debate (in particular, across tech startups). An all-women panel comprising Charlotte Petris from Timelio and Jemma Enright from MoneyBrilliant, and facilitated by Anita Kimber from EY, explored some of the opportunities and challenges (and the struggles along the way) of being a startup co-founder, their experiences of launching new businesses and products, and how they go about hiring the right talent and building great teams.

Meanwhile, in London, The FINTECH Book was being launched, which includes a contribution written by DragonBIll‘s Melbourne-based CEO, Luke Hally.

Over at the MBTC , the Melbourne Bitcoin Meetup group hosted Brave New Coin‘s CEO, Fran Strajnar. Fran gave a detailed presentation on the market news, financial data and analytical infrastructure that Brave New Coin is building to support crypto-currencies and block chain technology, including the new Bitcoin Weighted Average Price (aka B-WAP). This new analytic will likely prove to be a key component for real-time and historical pricing data on specific bilateral transactions (e.g., calculating end of day evaluations or annual tax reconciliations), as well as providing underlying reference data (e.g., for index-linked instruments and associated derivatives, swaps, options and forwards). Exciting stuff indeed!

Finally, ASIC, as part of its work in building a more supportive regulatory environment (under its Innovation Hub) has announced a bilateral agreement with the UK’s FCA on greater co-operation between the respective market regulators, that may lead to mutual recognition for FinTech companies. Another similar deal is being explored with Singapore.

Next week: 4 more #startup hopefuls pitch at Startup Victoria