The business models that have made these Aussie entrepreneurs into millionaires

The Australian Financial Review‘s Rich List 2020 is here, and thanks to the COVID-19 pandemic, there’s been a bit of a shake-up.

But, from startup unicorns to e-commerce empires, how do these Aussie businesses — and their millionaire owners — actually make their money?

We took a look at four founding teams leading their industries.

Melanie Perkins and Cliff Obrecht

Canva co-founders
Rank: 26
Wealth: $3.43 billion

Aussie unicorn Canva has well and truly caught the imagination of the Aussie public, for its tech intended to democratise graphic design, making it easier to create anything from flyers to Insta posts.

Founded by couple Melanie Perkins and Cliff Obrecht, the business started out as a tool for designing yearbooks and quickly morphed into the tech giant it is today — worth some $8.7 billion.

While offering a free service, the startup makes its cash through subscriptions, including to its workplace collaboration tools, and more recently, through its Canva for Teams product.

But, with a focus on employee culture and a swish head office in Sydney, it’s also known as a coveted workplace, attracting some of the best and brightest of Aussie tech talent.

Nick Molnar

Afterpay co-founder
Rank: 50
Wealth: $1.86 billion

Launched in 2015, Afterpay allows consumers to pay for products in four instalments, effectively offering credit the consumers pays back to Afterpay, not to the retailer.

The bulk of its profits come from fees charged to the retailers, but a chunk also comes from charging late payment fees to customers. A $10 initial late fee applies, plus another $7 after seven days.

Now, Afterpay is moving into consumer banking, launching transaction accounts in partnership with Westpac.

While it’s undoubtedly the biggest BNPL operator in Australia, it’s by no means the only one.

Competitor Zip is also ASX-listed and growing fast, while the COVID-19 pandemic has seen more players enter the space or secure funding for further growth. Watch this space.

Eddie Machaalani and Mitchell Harper

BigCommerce co-founders
Rank: 118 and 129
Wealth: $837 million and $780 million

While some members of the Rich List sell items directly to consumers, others, such as BigCommerce, sit in the background.

The Software-as-a-Service platform essentially powers the stores of online retailers, allowing those businesses to manage their online sales across a number of channels, from marketplaces such as Amazon to social media platforms such as Instagram.

The business grew out of one of six products in Harper and Machaalani’s earlier startup, and was launched with about $10,000 on their credit cards. Now, more than 60,000 merchants in 120 countries pay to use the software.

According to one of the company’s initial investors, Telstra Ventures partner Yash Patel, BigCommerce initially concentrated on servicing smaller businesses in a similar way to rival Shopify.

However, over time, BigCommerce chose to focus more on retailers in the mid-market and enterprise sectors, and this proved to be a winning strategy.

Ruslan Kogan

Kogan co-founder
Rank: 188
Wealth: $575 million

Ruslan Kogan has joked about his eponymous business being “a statistic business masquerading as a retailer”.

It’s a business focused on targeted marketing services and keywords, in order to help it shift a large volume of low-cost items fast.

The retailer started out buying electronics from cheaper countries, rebranding them as Kogan goods, and selling them on.

Now, it also sells other well-known names through its platform too.

Kogan was clearly in a prime position for the COVID-19 e-commerce boom, and has been one of the biggest success stories of the pandemic, increasing its market cap four times over in the past six months.