Sharesies to more than double in size with Trade Me injection

Tuesday 25th September 2018

Sharesies will more than double in size during the coming year with a $4 million injection from Trade Me to help fund new product development and get its name out to the public.

The start-up is already seeking three new people on top of the 14 currently employed and needs about 30 to hit the targets in its current business plan, chief executive Brooke Roberts said. She has two objectives in that process: helping New Zealanders realise Sharesies removes the price barrier to investing and building out the company's existing product.

"What this capital helps us do is build out those key product opportunities we see and also drive that awareness," Roberts told BusinessDesk.

Many firms find attracting skilled workers difficult in the current environment and Roberts said the company will be matching that expanding workforce to opportunities and developments as they arise.

"We'll scale the team in order for us to do what we set out to do," she said.

Sharesies provides an online platform for people to make regular small investments in a range of funds. It has attracted 24,000 users who have collectively invested more than $27 million through the platform, through a variety of exchange-traded funds and managed funds.

New product development will focus on those existing products in the short term, but as customer awareness develops they'll add new asset classes, Roberts said.

"Our aim is that someone with $5 has the same opportunities as someone with $500,000," she said.

The company's developers will also be working on how it can build financial advice into the platform to help investors make good choices and motivate them to build their portfolio, she said.

Roberts sees Sharesies as a wealth development platform rather than a wealth management one and is pursuing a generation of investors who want to engage online. The Wellington-based company's developers target the 25-to-35 age demographic and 80 percent of their investors to date are under 40.

Sharesies has found online engagement to be effective in getting the word out, but Roberts sees other avenues as part of that campaign to build a "loved and trusted" brand.

One example is the company's first share club event in Wellington this week where four speakers will talk about investing and field questions. They include Sharesies co-founder Leighton Roberts, lawyer Alex Lipski, Edmund Hillary fellow Kaye Maree Dunn, and Kiwibank head of transactions and payments Zoe Wallis.

Trade Me wasn't the only suitor keen to invest in Sharesies, but Roberts said the online auction site was the best strategic partner.

"We really relate to Trade Me's purpose. That’s at the core of everything we want to do. Having that as a cornerstone is so important when building out business like this," she said.

Trade Me CEO Jon MacDonald said the conversations with Sharesies started a while ago and that he was impressed by the quality of the team. He sees financial services as an attractive investment opportunity because it's primarily an information product. Trade Me has already entered that market with a cornerstone stake in peer-to-peer lender Harmoney.

"We do see an enormous business opportunity there where you see how unfriendly investing has generally been for people," he said. "We can see how that can change with a really material opportunity for the company that can unlock that," he said.

Sharesies came out of the Kiwibank-sponsored 2017 fintech accelerator. It doesn't charge on portfolios of $50 or less. Portfolios between $50 and $3,000 attract a $1.50 monthly charge and those over $3,000 have a $3 monthly fee. Investors can access 13 funds offered by AMP Capital, Pathfinder Asset Management and NZX's Smartshares exchange-traded funds.

(BusinessDesk)

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