But for David Brennan none of this is an issue.
Brennan, a young gun of Perth’s finance scene, is the founder of two fintech companies: Kikka, a P2P lender, and Enably, a consumer lender. He founded both while in his 20s.
Slightly more than a year old, Kikka’s fortunes took flight at the end of last year, when the company grew more in a single month than it did in the previous twelve. The lightning turnaround Brennan credits to a changed marketing strategy and new ideas about why SMEs borrow.
“We started thinking that customers are motivated by safety and comfort and knowing that you’ve got their back. People are looking to say something like ‘when you need finance, we’re here for you’ rather than pushing a loan product in front of them and saying ‘take this!!’. We have a more subtle approach as to how to get customers through the door and a supportive style of marketing.”
Enably, while having the same owner, is a totally separate entity from Kikka. Like Kikka, it underwent a shift in strategy last year. The most obvious, while arguably the least significant, was its name change (from Loan Ranger to Enably). Its strategy has also shifted emphasis.
“The changes we’ve made are primarily to do with repositioning ourselves in the market, moving away from instant cash and into a more higher-up-the-credit-chain-style company which has a different product.”
Enably, which has been successfully making loans for four years, has been the backbone of Brennan’s success. It has been ranked among Western Australia’s top technology startups.
Moving into the New Year, a major goal for Brennan is to diversify sources of capital, which at present are mostly American and British.
“We’re really keen to bring in a lot more Australian capital, both from equity and debt. Initially, something upwards of 80 per cent was coming from offshore investors. Today, for both companies, the figure sits between 50-60 per cent. We’re keen to bring in more Australian money.”
While it is almost all a rosy picture, Brennan sees one dark cloud floating yonder: regulation.
Late last year, industry watchdog ASIC launched a regulatory sandbox allowing unlicensed finance companies to test some products on a small scale. While lauded by the industry - including the peak body, Fintech Australia, of which Kikka is a supporting member - Brennan is less optimistic.
“I’m not as supportive of the regulatory sandbox as others. I don’t think it’s something that we should be playing around with. I think that heavy barriers to entry are important and I think allowing someone to test something on an active market is not clever. That’s just my personal opinion. I think that it takes one slip up or bad PR story to hurt all of us.”