Perth-based fintech PictureWealth has raised $12 million in late seed funding for its tech-meets-human financial advisory model, even as COVID-19 disrupts the economy and the global financial ecosystem.
The capital is comprised of private equity and debt funding, but the backers have not been disclosed.
At the same time, the startup has acquired financial services licensee business NEO Financial Solutions (NFS), for an undisclosed sum. NFS managing director Mark Edman will join PictureWealth as chief operating officer.
Headed up by co-founders Neal Cross and David Pettit, PictureWealth allows users a comprehensive picture of their total wealth, and helps them to improve upon that picture, by offering access to financial specialists on demand.
The idea is to provide a hybrid service, combining human wealth management advice with digital tools.
This funding announcement follows two years of strong growth for the business.
Founded back in 2017, it’s been commercially operational for less than two years, Cross tells SmartCompany. In that time, it’s gone from zero revenue to $20 million annually.
PictureWealth is also now advising on $2 billion worth of funds for some 40,000 clients.
“It’s been really fast growth,” Cross says.
“We were pretty much profitable straight away.”
The funding is pegged for more acquisitions, Cross says, and for the opening of a new Melbourne office. The startup will also be hiring more team members, and starting to think about expansion into Asia.
However, it of course comes at a difficult time for many businesses, as the COVID-19 pandemic tears through the Aussie economy.
In fact, PictureWealth actually closed the deal just three days after the ASX hit its lowest point, Cross says.
“If we’d planned this we would have not have done this when we did it,” he says.
While those 40,000 clients were watching their investments fall into jeopardy, it wasn’t quite the right time to be shouting about good news. But, despite economic hardship, Cross expects to see continued growth.
“It’s a tough time, but we’ve certainly got the right strategy,” he says.
“We firmly believe that the future is hybrid … as people are exiting the industry we’re entering it.”
During the COVID-19 pandemic, businesses have fallen into “three buckets” he notes.
Some businesses and industries, such as tourism and hospitality, have seen a period of effectively zero revenue, he says. He himself owns a social enterprise hotel in Sumatra, for example, which has seen its operations grind to a halt.
Other businesses have slowed, such as those in consultancy or advisory, or in manufacturing, he says.
And the rest are either neutral, or have seen significant growth — think the Zoom’s and Amazon’s of the world.
PictureWealth is in the neutral category, he says. That’s partly because the business centres around advice and engagement, rather than simply selling one product or service.
As the pandemic set in, the startup received a lot of calls from clients seeking reassurance, as it would “any time we see disruption in the market, pandemic or no pandemic”, he says.
“We have a much deeper engagement and a much wider and deeper product set,” he explains.
“Our business is built on great fundamentals.”
As for the future post-pandemic, Cross isn’t necessarily expecting the financial world to change in any fundamental way. In Australia, and particularly in Western Australia, “we’re kind of post-pandemic already” he says.
The lasting difference, he says, will likely be the focus on remote and flexible work. Many people have been spending more time with their loved ones, and finding more work-life balance. They’re not going to want to go back to a nine-to-five in the office, Cross suggests.
And, they may be more mindful of their financial situation.
“It’s reshaping the wealth market. People are more focused on healthcare, life insurance and salary protection,” he suggests.
“We’re here to financially educate people. Our job is to make them financially happy,” he adds.
“Touch wood we never see anything like this ever again, but if we do, then they have a bit more comfort in their financial lives.”
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