Lachlan Murdoch

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Stokes to join Packer and Murdoch in possible SocietyOne investment

7:05PM | Sunday, 6 July

Seven Group Holdings chairman Kerry Stokes is rumoured to have joined a consortium of high-profile business and media figures planning an investment in peer-to-peer lender SocietyOne.   According to a report in The Australian Financial Review, the consortium is led by former Challenger chief executive Dominic Stevens, and includes both News Corp co-chairman Lachlan Murdoch as well as Crown chairman James Packer.   The report also states the lender has attracted the attention of a rival consortium, which includes US private equity giant The Blackstone Group and New York-based investment bank Credit Suisse.   The foreign rival bid is reportedly interested in expanding the company overseas.   A spokesperson for SocietyOne told StartupSmart it is not in a position to comment on speculation.   Popular overseas, the peer-to-peer (P2P) lending model works by allowing investors to lend a fraction of a loan directly to a borrower, without using a traditional bank or financial institution as an intermediary. In turn, companies such as SocietyOne provide a platform that links credit-worthy borrowers with investors.   SocietyOne, which claims to be the only active lender of its type in Australia, cites a number of benefits of the P2P model. This includes lower fees and more flexibility for borrowers, along with a new class of asset for investors.   Last month, the P2P lender dropped its personal loan rate for a prime borrower to 9.80% pa, 5% lower than the average rate from the major banks. It currently offers personal loans of between $5000 and $30,000.   The consortium’s interest comes after Westpac’s Reinventure Group made a $5 million investment in SocietyOne during April. The investment was believed to be the first equity stake a bank has taken in P2P lender anywhere in the world.   A further $3.5 million was poured into SocietyOne by Rocket Internet and several local investors at the same time as the Reinventure.   StartupSmart attempted to reach a representative of Stokes through Seven West Media, but received no response prior to publication.  

Show me the money! Four Australian disruptive financial services startups to watch

6:59AM | Wednesday, 18 June

According to SEEK co-founder and Square Peg chief executive Paul Bassat, payments are the “holy grail of innovation”. He made the comment at The Australian Financial Review and Macquarie Future Forum on Tuesday, where some of Australia’s leading entrepreneurs declared the industry ripe for disruption.   Despite banks in Australia being protected by complicated regulations, entrepreneurs are placing the industry under increasing pressure. Adding to banking woes are the likes of Google, Amazon, Apple and Facebook eyeing entry to the payments market.   Here are the top four Australian disruptive financial services startups to watch:   1. Society One Society One is Australia's leading peer-to-peer lending platform, with a $5 million investment from Westpac’s Reinventure Group, a $50 million fund set up to back early stage startups. It’s rumored to be on the investment radar of both James Packer and Lachlan Murdoch.   Borrowers list loan requirements and investors decide which loans they choose, how much to invest in each loan, and the rate at which you want to earn their interest.   Its personal loan rate for a prime borrower is 9.80% pa, 5% lower than the average rate from the major banks.   2. Tyro Payments Tyro provides credit, debit and EFTPOS card acquiring services and does not take money on deposit.   It was founded in 2003 by ex-Cisco employees Peter Haig, Andrew Rothwell and Paul Wood as MoneySwitch Ltd.   Eleven-year-old Tyro is in its second year of profitable business operations. Disrupting the Australian banking industry was never going to be easy, and it took the team over $30 million in capital and a founder break-up to get there.   At launch it was the first new entrant into the eftpos space in 15 years.   3. Pin Payments Pin Payments is an Australian-based startup operating from Melbourne and Perth that offers onsite payments and a developer API without the need for a merchant account.   It received a grant from Commercialisation Australia and partnered with some of the Australian banks to make its offering possible. Both overseas-based Braintree and Stripe operate in the same space, but Pin has a solid local focus.   Getting access to a payment system has previously been a juggle for companies, especially early stage ones. Pin Payments is aimed at developers who can easily integrate its service through their API.   4. CoinJar CoinJar, a Melbourne-based bitcoin exchange and payment system, which has raised $500,000 in seed funding from a range of individual investors and the Blackbird Ventures seed fund.     Launched in February by Asher Tan and Ryan Zhou, CoinJar has over 10,000 active users in Australia. The company charges a low single-digit percentage fee for each transaction.     CoinJar was the first company to get its Bitcoin app re-listed in the iPhone App Store, after Apple revised its app guidelines to include virtual currency apps that it previously excluded.

ROKT raises $US8 million: How they did it and what their investors wanted to know

11:08PM | Tuesday, 26 November

ROKT, a digital marketing start-up launched last year, has been valued at $US50 million ($54.4 million) and received $US8 million in investment from Square Peg Capital, Greg Roebuck, Lachlan Murdoch and John Ho.   The digital referral platform generates millions of referrals for advertisers each month. Clients include eBay, Gumtree, Australia Post, Webjet and OZSALE. The team of 45 is servicing clients in Australia, New Zealand and Singapore   Chief executive Bruce Buchanan told StartupSmart he was excited and relieved as he signed the deal on Friday after a couple of big months. The funds will go towards a rapid international roll out.   Buchanan, who used to be the chief executive of Jetstar, says they decided to seek out expertise before funds, but the two came hand-in-hand.   “We identified some people who would help us with the US expansion, and it progressed from there. It wasn’t a typical round process where you go out armed with financial advisors and shop it around. We went and sought out people whose advice would be really valuable to us,” Buchanan says.   Buchanan describes the investors who backed them as having a similar approach to assessing their investment options.   “They all definitely had a sense of the how sustainable the business model is, and how defensible it is. There was a lens on that,” Buchanan says.   “The other piece they really honed in on was all about the people. They spent a lot of time about the quality and transparency of the management team, and how ability to execute on the opportunities we were presenting.”   In a statement, Square Peg Capital co-founder Paul Bassat said: “We invest in passion and we can see that the team at ROKT have the vision to deliver a world-class product and be a disruptive player in digital marketing. We’ve undertaken a rigorous analysis before making this investment and we believe that ROKT has the potential for growth that could make it a global player in a very short space of time.”   The ROKT team will be focused on rolling out their offering in the United States, and then a series of international markets.   “We’ve got a number of markets we’re really interested in, and a roll out plan in our heads. We’ve researched which ones will be easier and harder, and how we want to sequence them,” says Buchanan, adding they’re targeting the United States first as it’s the largest digital advertising market by a fair bit.   Buchanan says as an Australian start-up they are mindful of the rich opportunities in big digital markets such as China and Japan.   “We’ve grown fivefold in the last 12 months, and plan to continue that rate of growth, but we don’t want to rush in Asia,” Buchanan says. “My experience with Jetstar and Asia is that the right partners are absolutely critical, so we want to make sure we get the perfect partners and the right local backing first.”   Gavin Appel from Square Peg Capital and John Ho will join the ROKT board.   In a statement, Hong Kong-based Janchor Partners chief information officer Ho said: “Bruce has a strong track record and I have a lot of confidence in the management team. ROKT has the right people and platform to excel in this space”.   Buchanan adds the business model fundamentals established by the original founders have set the company up well, and the rapid growth has come from those and the strength of the team.   “When you’re growing this fast you’re outlaying a lot of cash. Combine that with the need to get best possible people on board as quickly as you can, and you’ve got an interesting challenge you have to juggle,” Buchanan says.

THE NEWS WRAP: ASX chief says a foreign takeover will be more likely after regulatory changes

3:43AM | Friday, 15 March

ASX chief executive Elmer Funke Kupper believes proposed new regulations will make it easier for foreign investors to mount a successful takeover of the exchange.

THE NEWS WRAP: ACCC backs franchise dispute shake-up

7:01PM | Monday, 4 July

The Australian Competition and Consumer Commission has endorsed a range of franchise dispute resolution options flagged by the Federal Government, which could see the commission replaced as the first port of call for the disputes that erupt between franchise partners.

NEWS WRAP: Inflation dip eases pressure for rate rise

12:58PM | Sunday, 5 December

A surprise dip in inflation could prove to be a pre-Christmas boost for retailers, with the Reserve Bank less likely to hike interest rates next month. Underlying inflation for the year to September dropped to a five-year low of 2.4%. The dip eases the pressure on the RBA to increase interest rates before Christmas.

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