Sharesies becomes the second ASX broker this week to raise capital
Just a few days after Superhero raised $25 million, New Zealand founded broker Sharesies raised $48 million – and it says there’s still room in the ASX brokerage market for them.
Sharesies launched in New Zealand in 2017 and has grown to 450,000 customers – nearly 10% of New Zealand’s population – and $1.7 billion in funds under management.
It entered the Australian market in April and says this capital raising – which values it at $480 million – will take it to the next level. The broker offers access to the NZX, ASX and US stocks too.
A significant investor in the deal was venture capital firm Amplo which also has a stake in global broker Robinhood.
Sharesies’ Australian boss Brendan Doggett says his company stands out as an ASX broker aimed at newcomers to the investing space.
The platform allows low amounts to be invested and is focused on long term wealth generation, rather than short term trade profiteering.
“6 founders got together and thought up an idea – rather than spend $50 per dinner on a Friday night, what else could you do? Investing was something – $50 per week is a lot of money over time,” he told Stockhead.
“And they came up with an idea investing was too hard to get into, barriers to entry quite high, a lot of jargon. 5 years ago you still had to go to a stockbroker, [fill in] manual based forms and not done in a way that is welcoming to newbie investors.
“We’ve got 450,000 customers on the platform, over $1.8 billion in funds.”
“And I think the interesting thing about that is because they are new retail investors who didn’t think about investing before, that $1.8 billion probably would’ve been sitting in a bank account earning at best 1% or being spent on consumer goods.”
“So that’s $1.8 billion in wealth creation for people who just didn’t think anything other than a salary or income would be something that was available for them.”
But even more than 18 months on since COVID-19 first rocked the global markets, Doggett says there’s more growth to be captured by ASX brokers.
“There’s over 900,000 potential investors looking to invest in the next year – Why haven’t they? I think Sharesies is perfect platform for people to try investing,” he said.
“We have access to 3 jurisdictions – NZX, ASX and a couple of exchanges in Australia – with no minimum investment. It’s an attractive proposition people can jump in and give it a go, don’t have to worry about paying $150 for a share and worry if it’s going to go up and down. They can put $10 in here and there and increase it over time.”
“And then there’s educational content which talks about the simple investing concepts and brings people up to speed slowly. It’s like an onion – as you peel back the layers you get more and more information as you invest bigger amounts so it’s a beautiful platform to bring to Australia.”
In terms of the amount of tech-based brokerage platforms in the market, “I think there is space for all of us,” Doggett said.
“I think some of our competitors are skewed to trading behaviour rather than long term investing.”
“Our platform is very much on wealth development and we provide the opportunity for someone with $5 with the same opportunities as someone with $5 million. You can invest in shares with Low brokerage, small amounts and educational content is important.”
“It’s different to some of the other competitors but there’s space for everyone with different kind of investing psyches.”
Another Sharesies trait the Doggett flagged is the fact that it hold’s what’s called a B Corp certification.
Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
Doggett says the title is one of the business’ most important assets.
“The founders are set up around our vision which is to create most financially empowered generation – it’s making sure empowerment is there for all,” he said.
“The B Corp certification is very important for us, we’re looking after all stakeholders equally, not only community but environment, how we treat staff and most importantly customers – this is what we’re about.”
Doggett also says eventually, Sharesies would like to expand into further markets.
“I think the platform and the way we go about doing business and helping people become investors is transferable to other jurisdictions,” he said.
“We have worldwide ambitions – but we’re focused on Australia at the moment,” he said.