Spaceship bags $10 million to meet shifting financial mindset among young Aussies

Aussie fintech Spaceship has raised $10 million in fresh funding, as COVID-19 pushes the younger generation of Aussies to shift the way they think about their financial future.

Founded in 2017, Spaceship is an online platform offering investment and super options aimed at generation Z and millennials, chief executive Andrew Moore tells SmartCompany.

It’s designed to be simple, accessible and low-cost, but it’s also app-based, and delivered in a way that’s more familiar to its target demographic.

It opens up financial management to a generation that may previously have felt excluded from it, Moore says.

“They didn’t know how to start, they didn’t know what to do, they perhaps didn’t feel they had enough money … and as a result, they were being disadvantaged,” he adds.

“They weren’t getting this chance to invest in their financial future.”

This is the first major cash injection the business has seen since Moore took over the chief executive position from co-founder Paul Bennetts in August last year. All four of the original co-founders have now stepped away from the business.

The $10 million was raised through a convertible notes issue, with all of Spaceship’s major backers contributing. That includes Aussie VC Airtree, as well as Grok Ventures, the investment fund of Atlassian co-founder and co-chief Mike Cannon-Brookes, who put “a significant amount of money in” this time around.

Moore doesn’t reveal how the business is tracking in terms of revenue. But, as of the end of July 2020, funds under management had increased by 42%, compared to the same time last year, reaching $420 million.

But, during the same time period, the number of retail investors on the platform doubled, reaching 85,000.

There’s no minimum investment requirement, so customers can dip their toe in the investment waters with an investment of $1, or even less. And it looks like that may be proving popular.

Investing in the future

It’s been an interesting few months, to say the least, for the financial markets and the startups in this space. But, Spaceship has “well and truly passed the COVID test”, Moore says.

The pandemic has affected investment markets and the startup’s own operating models, but it has also got people thinking a little differently about their cash, and what to do with it.

Spaceship’s investment philosophy, which is partly tied to the demographic it’s targeting, has also put it in good stead to weather the storm.

The concept is to “invest where the world is going”, Moore says.

“Our investment team is looking for companies to invest in that we think are going to do very well, not just over the next week or year, but in the decades to come,” he explains.

Not surprisingly, many of those can be described as ‘tech’ companies, whether that’s fintech, retail-tech, energy-tech, or anything else.

“These are businesses that are tackling problems in a different way, using technology to do it, and positioning themselves to be very successful in the future.”

These are also the businesses that have seen an acceleration in their own growth as COVID-19 has swept around the world.

“The decisions we had already made … have proven to be really good decisions.”

The startup is also seeing some changes in the way younger people are approaching their finances.

There’s more interest from young adults in investment in general, Moore notes.

Because of COVID-19 restrictions, many are not spending money on the things they would usually, he adds.

“Those people who are fortunate enough to continue to be employed are actually finding they have quite a bit more disposable income or savings,” Moore says.

In a low-interest-rate environment, they’re looking for something else to do with it, and they’re prepared to take a bit more risk for return.

Once they get started, they can engage with their investment, and get a visual sense of how they’re performing, Moore explains.

“We want people to feel that, and have that absolutely in-the-pocket accessibility to it so they really feel in control of their financial future.”

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