Sydney fintech Pearler wants to be the ‘Spotify for investment’

The fintech startup boom has seen a wealth of companies emerge to help Australians get better at saving and investing their money.

Working in this space, we have the likes of Frollo, which aims to help users not only see where their money is going, but also help them achieve their savings or other money goals and learn better money habits; Raiz, the micro-investment app formerly known as Acorns; Spaceship Voyager, and a host of platforms in between.

Founded by Nick Nicolaides, Hayden Smith, and Kurt Walkom, Sydney fintech startup Pearler is a new offering, aiming to turn successful savers into confident investors.

“Our aim is to empower the average person to take a leap and being their investing journey across both the Australian and American stock markets,” Walkom explained.

The cofounders believe that many an average Aussie would like to learn more about investing and how to do it, but the barrier to entry often feels insurmountable.

Walkom cited a 2014 study from the ASX that found more than 2.5 million Australians are “keen” to find out more about investing, however don’t know where to start and are confused by the wealth of information out there.

“We believe Pearler will combat these thoughts by using our community to remove the stress of solo online investing and the fuss of solo researching. Investing can be complex but with Pearler it doesn’t have to be. Our first mission is to empower those who are keen to start investing take their leap,” Walkom said.

The key to the Pearler solution is showing users where successful investors are putting their money, with the idea was born of Nicolaides and Walkom’s experiences in finance.

The pair were working in a family’s investment office, which Walkom said was like an extension of the family: they worked to understand and take into account the family’s changing goals and needs and made the investments follow suit, so the family itself “could focus on the important things in life”.

Walkom and Nicolaides soon realised this line of thinking was the key; “everyone would be better off if they had an office of people working to make their investments suit them,” Walkom said.

The pair also felt that a solution was needed based on their experiences having friends and family come to them for advice.

“We found that the conversations that novice investors have with the people they go to for advice, are the most influential on their journey to become a confident investor…they tend to initially turn to the internet and friends and family as opposed to professional advisors,” Walkom said.

In developing Pearler, the cofounders turned the table on their family and friends, sitting down with people to understand what they need. This process saw them pivot from their original idea, which was focused on superannuation, to everyday savings.

“We want to re-engage people with their money, and super is forgotten for decades for many Australians. We found that the best way to reach people about their super is to speak to them about the money that matters most to them right now – the money they can use today – and then integrate super into the conversation over time,” Walkom said.

So what does that look like in practicality?

The team explains Pearler as Spotify, but for investing. Just like those of us who don’t care all that much to discover new music ourselves and prefer the Spotify algorithm – or our tastemaker friends – to do all the work by creating playlists for us, Pearler looks to help people find strong portfolios on which to model their own.

Pearler will look to bring on ‘ambassadors’ who will publish their portfolios publicly for users to look at, while users will also be able to view their friends’ portfolios.

“The community then becomes a tool to validate ideas so that everyone can make smart investment decisions easily,” Walkom said.

Investors can, however, choose how much detail they show their network; currently, the most level of detail shows the portfolio composition, or the percentage that a user has invested in each company, rather than their portfolio value.

The Pearler team will also be creating ready-made portfolios, which it refers to as ‘pearls’; these will be like deconstructed exchange traded funds (ETFs), Walkom explained.

“We want individuals to invest in what makes sense to them and invest across diversified portfolios that relate.”

These ‘pearls’ will be curated according to different ideas, allowing users to invest according to things like industry; ethos or action, for example finding companies who champion gender equality; and goals, such as saving for a home.

The startup is gearing up to launch in November; it will look to play in the Australian Securities and Investment Commission’s (ASIC) regulatory sandbox, allowing Pearler to test its platform without having to go through the process of acquiring a license.

With its target market the 2.5 million Australians who are keen to invest but don’t know where to start, Pearler will look to bring on influencers and commentators who speak about financial independence as ambassadors.

“We hope that our future Pearlers can recognise that they too can achieve financial independence in the same way that these trusted investors achieve their financial independence,” Walkom said.

“To get experienced investors on our platform we will compete with the big 4 banks, as they account for [more than] 75 percent of online investing, but we hope to expand the market for online investing in Australia; a rising tide lifts all boats.”

Image: Kurt Walkom. Source: Supplied.