Perth robo-advice startup Future Penny has announced the raising of $500,000 in seed funding from Zhenya Tsvetnenko, founder of Digital X, and Neal Cross, Chief Innovation Officer at DBS Bank. The raise comes ahead of the startup’s launch, which is scheduled for August.
Aiming to redefine expectations around automated advice, Future Penny came into existence to improve upon personal financial literacy.
Cross said, “Future Penny follows my investment strategy of startups that focus on improving people’s financial lives. Current robo-advisors are too focused on monetisation with little extra value; Future Penny delivers this extra value for free.”
Rather than focusing on pushing out a product, Future Penny focuses on educating users about their finances and if an investment opportunity is suitable for the customer then the service will guide them down that path.
The platform works around three basic steps: thinks, learn, and do. David Pettit, cofounder of Future Penny, explained, “The first module, which is think, is about self assessing your current circumstances and diagnosing any issues that you’ve got and the opportunities that you may be missing out on.
“The learn part is considering what people could be doing differently or better and that’s creating customised education content driven by the user profile. The third part, which is the do, is the taking action; it doesn’t just need to be an investment portfolio, it’s looking at broader advice.”
When it comes to monetisation, Future Penny will be looking to provide education systems for employees in large organisations across Australia.
Pettit said, “As we think about benefits that companies across Australia are offering to their employees, there hasn’t been a solution that’s been offered in relation to personal finances and that’s largely driven from the fact that the finance industry is heavily product driven.”
Future Penny is targeting the working market, and is currently conducting preliminary discussion with some well-known national companies to make its system available as an employee benefit. The platform will be available to everyday consumers and business employees via a subscription service that can either be picked up by the company or paid by the individual at $15 a month.
The funding comes after the launch of a report from KPMG describing 2015 as the year where fintech entered the mainstream. According to the report, The Pulse of Fintech 2015 Review, over US$13.8 billion was opened up to a range of fintech companies around the world last year, which is more than double what we’ve seen in previous VC investment.
In 2015 Australia saw its first automated investment advisor Stockspot enter the playing field with $1.25 million in funding from H2 Ventures. Chris Brycki, founder of Stockspot said a big part of the business is educating consumers about how to make better financial decisions and improving the financial intellect of clients.
Other Australian fintech companies like Simply Wall St have also secured substantial investment and are continuing to look at ways to educate their customer base on investment opportunities. Last year Simply Wall St secured $600,000 in a round led by Innovation Capital and yesterday announced the acquisition of US competitor Capp.io.
Future Penny too was created out of frustration with education from banks and other financial services providers, and aims to close that gap. Still currently in the development stage, the startup will be launching the education diagnostic system in late June. In August Pettit said the team will be looking at launching the full robo-advice component, which has the capacity to transact on portfolios if users wish, or potentially take actions on other financial products.
Pettit said, “We’re starting with Australia, which is the most heavily regulated environment in the world, and looking at some of our investors, they are invested in us because of our financial reach, and they agree with our premise and model, so if we can get this right here it’s going to be easy to get across borders.”
Image: David Pettit and Zhenya Tsvetnenko. Source: Supplied