Transcript

Matt Heine (MH): 

Welcome. Good afternoon to everyone and good morning to our friends in WA. It's an absolute pleasure to speak to Paul today in our first ever live podcast. And I was actually wondering, given it's more of a webinar, can we call it a podcast, but maybe that's for another day. As you can see, unfortunately, Paul and I weren't able to get into the same room together. So as we've tended to do over the last 18 months, we've done the best we can. I'm streaming to you from my study. I think Paul's probably at home as well. Welcome to the show, Paul.

Paul Basset (PB):

Hey, Matt. How are you?

MH:

Really good. Thanks, Paul. Paul, I'm fortunate to get to chat to you, sort of on a semi regular basis at the moment. I think having not seen each other for a little while, we've probably caught up about four or five times. It's always a really interesting chat. We've got a lot to cover today, but I thought for the 200 or so people that are registered for today's event, be really good just to get a bit of background on you, how you went from becoming a lawyer, I guess, to setting up one of the most successful tech companies in Australia.

PB:

Yeah. I mean, the story, I started my law career in 1991 and enjoyed being a lawyer. And '91 was an interesting time to start your career because it was sort of the middle of Australia's sort of last real recession. The '91, '92 recession was a really tough recession. And it was just a great time just to understand that things don't always go up and up until the right. And there are all the challenges along the way for businesses and individuals in terms of economic cycles.

Around about 1995, so a friend of mine who's a guy called Evan Thornley, who I went to uni with, and Evan and Tracey Started an internet company in about '95 called LookSmart. And Evan rang me up and said, "We need a lawyer." And I didn't really know what the internet was at that point. And as part of acting there, I learned about the internet, was completely blown away by the medium, probably it was a similar process for me in '95, '96 to what the process was for a lot of people... well, the process is at the moment for a lot of people around crypto and where, again, it's really hard to understand and people are trying to get their head around.

And so I was sort of blown away by the internet as a medium, and potential for that. And then a couple years later, March 1997, I was in auction. My wife and I, Sharon, were in auction. Sharon was pregnant with [Jasmine 00:03:16], our second child. We're looking to buy a house. And just as we're standing at the auction, the whole frustration of finding a house online... I'm sorry, finding a house in the newspaper, and kind of any house that you'd see the ad in the newspaper, any house that you liked, you couldn't afford. Any house that you could afford, you didn't like when you actually got, went and saw it. And kind of just the limited amount of information you could get from the newspaper. Anyway, had the idea for doing an online real estate site.

To cut a long story short, that idea morphed from real estate into jobs. I chatted to my brother, Andrew, who was working at Booz as a management consultant. We started thinking about it, putting together a business plan. We hooked up with Matt Rockman, who was a friend, and actually him and his father Irvin were clients at Bloch Leibler, where I worked and Matt joined us on the journey. And we got started in late 1997.

MH:

Paul, clearly, the infrastructure around tech companies back then was very different to what it is now. And someone suggested there's still a long way to go. How did you actually find your way around? How did you go about sort of finding developers and getting funding and some of those sort of things that a lot of tech firms take for granted these days?

PB:

Yeah. Look, it was really different. And to some extent, to some extent, it was a level playing field because everyone was operating under that disadvantage, if you like. But I think about today, all of the elements are very different today compared to 20, 25 years ago, and 24 years ago.

And the biggest thing, I think number one was on the funding side, we were really lucky. So I knew Matt and Irvin through ABL. I mentioned and approached them. I spoke to my boss and said I was wanting to take a leave of absence to look for funding and for this idea, and they were incredibly supportive at ABL.

Matt and Irvin decided to back Andrew and I, and Matt wanted to join us. He was really excited by the opportunity and he headed up sales for the first eight or nine years at Seek, building the website again. The first time we made, I mean, Andrew had a little bit of tech background, done a science degree, a bit of computer science, but none of us had a tech background. And so that was a massive risk for us.

We hired a guy called Rob Sloan, as our first CIO. And we were kind of like, "Let's go hire the team to build." And he was like, "No. No. You've told me I've got three or four months to build this website. It'll take three or four months to hire a team. We'll outsource the build," which we did. "And then we'll bring a team in house."

So we went through that process. So, yeah, it was a very different... Even things like accepting payments, which now it's just a line code from Stripe, literally a line of code from Stripe. Payment gateways, and accepting payments online and everything that went with that. And obviously making people comfortable paying you online. These were really hard barriers to overcome at the time. It's obviously a very, very different world of generation later.

MH:

These days telling your friends and family that you are a startup entrepreneur or about to start up a business is a bit of a badge of honour. What did your friends and family think back then when you said that you were leaving your law degree and law career, sorry, to do this?

PB:

Yeah. I mean, for the most part, I think they probably thought I was a bit crazy. Look, I think firstly for me, Sharon, my wife, was incredibly supportive. We had two children by then. We had a mortgage. I was on a really good career path at ABL, would become a partner pretty soon. And so her being supportive was unbelievably important. But for the most part, I mean, people were supportive. I think they were like, "What are you doing? What are you thinking? Why are you doing this?" In a really nice, polite, supportive sort of way, not in a critical way.

And the other thing I think, when I was reflecting on this, because my kids are now going an age where they're starting their careers. They've got a lot of friends doing startups or joining startups. When we started Seek, Evan and Tracey, who I mentioned at LookSmart, not only were they the only people I knew who had started a tech company, the only people I knew who worked at a tech company, other than some of the other people at LookSmart who I got to know through acting for them. So I just didn't have any friends or people in my network who worked in startups. It really wasn't as constant in Australia at that time. It wasn't a particularly common occupation.

And the fact that I see through my kids' lens and their friends and that cohort, so many of the best and brightest of that generation wanting to work in startups or wanting to start their own business is such an exciting phenomena, such an exciting phenomena for what's happening in Australia right now.

And then you know the story, well we support you and what you and Michael have done with Netwealth. And again, starting at a similar time, very long way of startups, having to compete with incumbents. It is a different world now. It's much easier, a lot of ways. It's harder because it's more competitive, so that it's harder, but it's certainly the ability to actually build a product, get it to market, get funding, find people that is way easier than it was a little while ago, and that's incredibly exciting.

MH:

Paul, no doubt like every startup founder, you went through a range of emotions from excitement to fear, to disappointment, to excitement. How long did it take you before you realised you were actually on to something pretty special?

PB:

I would say, it's a great question. I think the way you articulate it is spot on. I think the first year or two, those highs are really high. The good days you just think like, "Oh my God, this is just..." You're just floating. And the bad days, you're just like, "I just don't know how we're ever going to make this work."

And so I think that's a really good summary. There are a lot more highs and lows with startups in particular in the early period. I'd say the thing about Seek, is obviously it's about attracting employers and recruitment firms to put jobs on the site and attracting job seekers to come to Seek to look for jobs. And the thing about marketplace businesses, the reason why you look for a job on Seek or in the newspaper or on another website, is that's because where all the jobs are. And the reason why you advertise is that's where all the job seekers are.

And you've got to solve... with marketplace businesses, you've got to solve this chicken and egg problem initially. It's a very hard... It's a really, really hard problem to solve. And I would say that, and so the first year or so, the growth was really, really fast, but we were adding new advertisers, but then we churned them because they weren't getting results. Job seekers, they come to the site, but then they would be finding other jobs, so they would be coming back.

And I reckon about 15 months in... So this would've been, we launched March '98. This would've been about April, May, June '99. Suddenly, you could just feel that flywheel effect starting to work. And you're getting that positive feedback loop from our advertisers, from employers, recruitment firms, from job seekers saying this is starting to work. I think at that point, I think we really knew what the end state would look like. But I think at that point we knew we had a viable business.

MH:

Yeah. And without doing a Melbourne tech history lesson, you mentioned at the start that you were thinking about real estate listings. When did REA start up? And were you looking over the fence thinking, "God, I wish we'd done that"?

PB:

Well, REA, I think today's about a 20 billion market cap. Interestingly, REA didn't exist then. They were very early, very nascent in the journey. We came along a bit before Carsales. In our category, in employment, there were a few other players. Fairfax and News Corporate both launched their sort of their initial iteration of their online classified spike. I think it was called Fairfax mark, or something like that. I forgot what the news classified's. It's the other one, very imaginative name.

But I think for us, interestingly, the reason we didn't do real estate was primarily because marketplaces work best when there's a high level of fragmentation. And on the supply side, in real estate, you've got the big franchise groups, Raine & Horne, Ray White, all of those sort of players. And we were nervous. We were worried about the power of franchise players. We loved the fact that the employment market was more fragmented. And real estate [inaudible 00:11:32] a $20 billion business. Clearly, clearly that would've been... If we'd been able to do it successfully, that would've been a great path to go down.

 

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MH: 

I think Steve's been incredibly successful. I think you're in a very unique position when you're now assessing startups and we'll come to Square Peg shortly, but a huge amount of lessons that you would've learned between you and your brother, particularly in those early days, but also as the business became more mature, a couple of questions I have around that. So when it came to competition, suddenly you had some very big, well-backed businesses coming to try and do a market share of heading, it was Monster at the time.

PB:

Yeah.

MH:

How did you think about competition at the time? Was it about, "We've got an enemy," or are you just focused on doing what you needed to do and we'll worry about them later?

PB:

Look, I think a bit of both. I think a bit of both. I mean, it's convenient to say, all we did was just a hundred percent focus on what we were doing. I think we did a pretty good job for the most part of doing that. But you're certainly aware of your competitor and you become a tiny bit obsessed with them.

We had an interesting mix of competitors in the first, say, five or six years, Matt. They were... well, it was a mix of other startups, so people going on a similar journey to us. And I think for the most part, they were being less aggressive than we were. And I think we understood one important thing really well, which was that this was a winner take all or winner take most market and we wanted to be that player. So we got out of the gate really hard, really fast, raised money, focused on building our job seeker volumes, focused on building our volumes on the advertiser side, et cetera.

So that was one group of competitors. The second was News and Fairfax. And our thesis with News and Fairfax was that, in simple terms, they were fighting us with one hand tied behind their back. There was an $800 million employment advertising market in Australia in print. At the time, they were dominated by those two companies. West Australian newspapers as well. They were the three main player. There was the online employment market, the online part of the employment market was probably $1 million.

It's great when we started, it's a great theory. I'm going to cannibalise my existing business in favour of this new business. But the reality of that's very hard, and so we knew that would be a challenge, and it was. And then the third group of competitors was global players and Monster was most notable. And again, they had a big advantage in terms of being able to leverage a product development spend across a global business. And so that in theory is an advantage. But frankly, they just didn't execute very well in Australia. I think we were more focused. We executed better. We were hungrier. This for us is about survival, and we were competing against a group of people who were nowhere near as hungry as us.

MH:

I think that's an interesting point, particularly when you look at the group of startups that you were competing against and that mentality of winner takes all. How did that sort of permeate itself into a culture? Was it you and your brother who were really driving that? Or how did that become the approach, because it's a difficult one to actually put in place.

PB:

I think the thing that was... one of the things that was best about Seek was it was just this incredible sense of ownership among the team. We had options plan and everyone was an owner in a literal sense, but that's not what creators... People really cared. They cared about Seek. They cared about our job seekers. They cared about our advertisers. They went the extra mile. So it wasn't three owners kind of really focused in a group of people, sort of running alongside. It was a group of people who really thought and behaved like owners and really, really cared and really passionate about the organisation.

And so I think that was clearly... I think our two secret sauces were the first point I mentioned, which was that I think we, sort of an obvious point, but not all of our competitors got it, which was, this was winner take all. And you really need to win and you get a self-report as you start get a market leadership. That market leadership in a marketplace business becomes sort of reinforcing. And secondly, that our source of competitive advantage was just a group of people who were just amazing group of people, very dedicated, really passionate at what they did, and this was an important part of their life.

MH:

And as the business got bigger, did you find that you have to adapt to your management styles a lot because the business was more mature, there was a lot more people? How did you actually amend or change your approach?

PB:

Yeah. Look, it's a journey. I mean, another one you've got to remember. I started seek as a 29-year-old. I really enjoyed my career as a lawyer, but I wasn't running a business. I wasn't managing people. I was probably managing transactions, but I wasn't managing people in a line managing sense where they're reporting to me, whereas I was responsible for another organisation, those sort of things.

So I was learning on the job. My style is pretty hands on. Andrew's style was much more sort of really strategic, really outstanding in thinking long term, so that I think that was very complimentary. Matt did a fantastic job on the sales side and leading our efforts there, but yeah, absolutely your style has to change and adapt.

And you try to be ahead of the game on that stuff, but inevitably you are a little bit behind and you're getting into a bit of reactive mode sometimes where you're just so busy. You recognise that you have to let go a little bit. And also when you hire amazing, talented people, they kind of want the autonomy and room to do their own thing. And so it sort of happens naturally, but I'd never done it before. So you still learn on the job.

And there weren't a lot of obvious mentors for me to talk to. There weren't podcasts we could listen to. Again, this isn't about saying, "Oh, it was really hard." Everyone was in the same boat, but it was a very, very nascent... As you know, it was a very, very nascent environment in Australia, and you basically learned through first instances.

MH:

Fantastic. Paul, ultimately you decided to leave Seek to set up Square Peg, as well as taking on a role as the AFL Commissioner. How did that decision come about? And what was it that sort of inspired you to start up the next business?

PB:

Yeah, I mean, they were two separate decisions, Matt. And so I was really conscious of that. I was lucky. Not everyone has the good fortune that they can leave their job and then spend some time thinking about what they're going to do next. And I consciously, over a year or two period, I had 14 years at Seek, from a career perspective, just an extraordinary experience, amazing building that with Andrew, Matt and the team, and we just had a lot of fun. And it just felt like time for me. I'm a big believer in change. I had the perspective though I would prefer to look back and say, "Oh, maybe I've left a year or two too early," rather than looking back and saying, "Maybe I've left a year or two too late."

I remember as I started thinking about it, being like, "What will I do next?" And I actually stopped myself from having that thought process. I was like, actually there's two separate questions here. One is, am I as passionate about the role? Was I passionate about the job as I had been the last 14 years? If I couldn't answer that honestly, then it was time for a change. And we had a mate... I knew that Andrew were doing incredible job continuing to run and lead the business. There was an incredible team around him. And so there's a lot of confidence there that the business is going to thrive and probably do a whole lot better without me. So that makes it a lot easier.

But also then sat down. I took a six month break and sat down, thought about what's next. There was a conversation with some and colleagues, Justin and Barry and Tony, I think, you know, Matt, some or all of them. And we started chatting and it sort of came about.

I think with all those things that we talked about, the lack of a ecosystem in Australian technology industry, not enough amazing founders, number one, number two, not much in the way of capital for those founders, not much in the way of mentors. And we just thought for the future of the Australian economy, we need to... this country needs to produce some amazing companies that grow into the really, really important companies of tomorrow, because we know that a lot of our existing incumbent, large companies and small businesses are going to be disrupted. And if we are going to be able to produce enough high-paying, productive, rewarding jobs in this country for Australia to continue to be a really prosperous country, we need to produce just incredible companies, companies like Atlassian and Canva, and Afterpay, and I put Netwealth in that market, and just brilliant, brilliant technology companies.

And we thought we could play a role in terms of helping the next generation of founders. And that's been a really rewarding experience over the last nine years.

MH:

Fantastic. We'll come back to the VC market in a moment and a question I'm sure you get asked all the time is financially, you didn't have to start Square Peg. You could have sailed off into the sunset. What was it that motivated you to take this on, and the next big challenge?

PB:

I think number one, I personally get a lot of... from career and from work, I get a lot of, I think, a big part of the sense and purpose for me comes from that. So I love working. I can't imagine a scenario where I don't work. So that's number one. Love what I do. Feel very, very lucky. So a part of it was just finding something that I thought I would enjoy, be rewarding, where I could leverage some of my existing skills, learn new skills, work with people that I really liked working with.

So there were a lot of elements. That and then the other element was that point about feeling that we could give something back and we could contribute. And then we're not a not-for-profit, we're a for profit business, but hopefully we are bought through use of our own capital and our investors' capital, backing amazing founders who in turn will build incredible businesses. They will create value for their shareholders, including us. Out of those successful businesses will be individuals who say, "Hey, I learned a lot at wherever. I learned a lot at Canva. I learned a lot at Ray White. I'm going to go and start my own company."

You get this really powerful, self-perpetuating effect. And we wanted Australia to build a strong technology ecosystem, the way that the Australian market for example has. And I think we've played a really small role in that. I overstate our role, but we're really, really excited to have played a role in that and feel very passionate about it.

MH:

You mentioned some huge names. So obviously, everyone's familiar with the likes of [inaudible 00:22:06] and Canva these days. What is the state of play in Australia though? Where do you think we are on the global scale? And what's missing?

PB:

Look, I think it's a great question. And there's a glass half full perspective and a glass half empty perspective. The glass half full perspective I think is much more valid and it's much more exciting, but I think it's much close to market. The glass half full perspective is, firstly, we are producing much more startups than we were five or 10 or 15 years ago, number one. Number two, there was a lot more capital for those founders. Number three, there's some amazing talent to join those businesses, young and raw talent, as well as people who've come out of that previous, you know, the Seeks, the Atlassians, the Canvas that have come out of sort of more established businesses, the Carsales, all of those companies.

So we've got a lot of the elements in place. We are still somewhere behind, say some of the best markets in the world, but the rate at which we're producing amazing companies is three, four, five times as fast as even 10 years ago, or let alone 24 years ago when we got started.

So that's really excited. And I think the ambition of those founders is quite a lot greater as well. They're really hungry, really, really ambitious founders. And that's super excited. And Atlassian is a hundred billion... I think maybe 120 billion, a US $120 billion market cap. If it was listed on the ASX, it would probably be the number three or four business in Australia. And that's remarkable. This is a business startup. [inaudible 00:23:46] years ago no money, because there wasn't much web venture capital in Australia, so they got started with their own savings and were actually profitable from day one.

And you know, Afterpay just got bought for, what was it, 39 Billion Aussie Dollars. Canva raised money at 40 billion US. Companies like Airwalks are amazing companies, a lot of great companies that aren't in our portfolio that we wish invested in safety culture would be a really good example of one of those.

It's just a really real excitement. There's a long way to go, but it feels like we've got that... where it feels like that we're in motion. We've got that sort of flywheel effect I've talked about before. It feels like that's really, really operating, which is amazing.

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MH: 

But when you think about the tech ecosystem, funding's always very much important at the start to get things going. And thanks to Square Peg and others, that seems to have been solved to a large extent. From where I sit, the next big challenge, and you mentioned some great examples, but talent seems to be the next sort of big issue that we have to solve. We just don't have people coming into Australia and the talent that we have is going offshore.

How do we solve that? Or how do we make Melbourne, Australia, Sydney sort of as desirable as Israel or Silicon valley?

PB:

Look, it's a great question. And then there's a specific point of time aspect to question that because COVID has obviously been very hard, because our borders have been shut now for the best part of two years. And so as a country, it's not just about the politicians, it's about everyone. We really, really need to open this country back up. We really need to market ourselves as an attractive destination. We need to bring in some great talent from overseas. We need to develop our local talent.

Those two things aren't in competition with each other at all because firstly, sometimes people say, "Oh look, why would you hire talent from overseas? Why would you favour overseas talent over local talent?" The answer is you never would. I mean, it's so much easier. If you're a company in Sydney, it's so much easier to hire someone who lives around the corner, lives down the road than to hire someone from overseas and sponsor them and go through the whole process and the complexity. But sometimes, there just isn't enough people for the roles. At the moment, that's certainly the case in core technology roles, software engineering roles, AI and data roles, management roles. I'm sure you see that in your own business.

And so we need to develop our talent as quickly as we can. We need to bring in people from overseas. That experienced talent who comes from overseas helps develop the younger local talent, which is super exciting. And so all of this stuff, it is a... Look, it is a higher class problem at the moment. The single biggest challenge is lack of talent. That's a really good problem. It's a higher class problem that companies like Canva and Airwalks, in Canva in Sydney, Airwalk's more in Melbourne, Atlassian in Sydney are sucking up a lot of the talent. That is a good problem. That's a problem of success. And those companies shouldn't be apologetic at all for the fact that they're growing fast and hiring lots of people, but it just really underscores the fact we need to bring in more and more great people and develop local talent.

MH:

Paul, you also just touched on some interesting new technologies and buzzwords that we've all heard, particularly over the last couple of years. Crypto is something that's back in the press. CBA's announced that they're going to offer a wallet. What's your view on crypto? Where's it going?

PB:

I think it's the most exciting thing. And I've been on the journey the last five or six years and my enthusiasm continues to increase, but it is really complicated. I'd say it's the most complicated thing I've had to get my head around in a technology sense. It's remarkably complex. It is changing unbelievably fast. There is a ridiculous amount of hype attaching to market. And then at some point, that will all go through some sort of a crypto winter and then will emerge on that with a crypto in spring. That is inevitable.

I think what we're seeing now is crypto two or three years ago is about Bitcoin. And Bitcoin is sort of digital gold and it's kind of interesting. I've never owned gold. So it's not saying that's kind of intuitive for me, but you can understand the attraction of Bitcoin, but it is essentially an asset class. It has roll wind little application beyond that.

And then what we've seen in the last few years with... Ethereum's now been around for several years, but Vitalik Buterin, who's the founder of... or essentially the key person behind Ethereum, the process for him to build Ethereum playing out of trying to build things on top of, as a really young kid, a teenager, to try to build things on top of Bitcoin and realise the limitations of Bitcoin, so he built Ethereum. It's much more, not just as a digital currency, but much more a platform that you can build on top of. There's further innovations of that with projects such as LANA, which have had enormous impact.

We're seeing a lot in what's called defi or decentralised finance. And it's essentially what Ethereum introduced the world, is essentially smart contracts, which are contracts have embedded in software code where effectively it doesn't require lawyers and it doesn't require people to sort of sign consents and agree to things. Certain things happen automatically upon events occurring. And that's allowed a whole lot of interesting stuff in terms of exchanging assets and lending on different blockchains in a completely automated way, in an incredibly scalable way.

We've seen a lot of activity with NFTs, nonfunctional tokens with people buying, producing or minting art, or could be what we would've called football cards or baseball cards in the past, and a whole lot of different assets that are then an asset that you can have unique ownership of and you can deal with in whatever way you like. We're seeing the innovation of DAOs, or decentralised autonomous organisations, which potentially may replace the company over time. Who knows.

And so I think there's still a big gap between the bull case and the bear case for crypto. It's incredibly exciting. My one counsel to people would be not to sort of say, "Oh, this is rubbish. Or this is all hype." It's an easy conclusion to reach based on the way the asset prices are moving up and down. But it's really, really, really interesting.

MH:

Yeah. It's interesting. I haven't myself, although I've been talking about it for a couple of years, yet bought a coin. My current thesis is I'm better off to invest into the picks and shovels. So the trading platforms and some of the infrastructure that supports crypto.

PB:

Yep.

MH:

But given just how broad crypto and the services that service the crypto market are, for someone that's thinking about investing or looking at it as an asset class, what's the best way to do that?

PB:

It's a good question, because it's really hard to... First, I don't read as much as I can, number one. Number two, there are a whole lot of different... It's still somewhat difficult, but that's the beauty of that, sort of what CBA is doing. You've obviously had Coinbase set up as an exchange and marketplace many, many years ago and now listed with a significant market cap.

And so if you want to start plug, my first piece of advice would be if you got to play in this space, make sure... Think about it as gambling. There's high risk. You've got to assume that you've got to lose all or most of your capital. And if you bet $100 in the Melbourne Cup and you're all placed to lose that money and it's not the end of the world if you lose it, then that's high. Now if you should think about crypto, but that's the best way if you... Bit of reading, but a bit of doing as well.

MH:

Well, I'm conscious, I want to leave some time for questions at the end, but I'm interested in what other technologies or sectors you're really excited about. And also maybe if we can touch on, I guess, your move to global. You've recently launched a new global fund that is listed as opposed to, I guess, the startup world where you've traditionally been investing. Maybe if you can just talk through that.

PB:

Yeah. Look, I think for the first part of the question there, I mean, there's probably three or four, four or five areas that we are really focused on in terms of specific segments of the economy or verticals. FinTech has been a really, really important area for us. There's an enormous amount of market cap being financial service institutions globally. It's 10 to 15% of the economy in most countries around the world. You have a lot of legacy systems. You have a lot of large financial institutions that have challenges and cumbency and really wanting to maintain their profit pools and lots of great founders coming in and challenging them, and essentially extracting away products using software. That's essentially what Stripe did, if you like.

Stripe basically said, going back now 11 or 12 or 13 years, Matt, just made it incredibly easy for people online to accept, it's like solve one problem. You're a small, young company and it's really hard to accept payments online and they just made it incredibly easy and they use software to solve it. Essentially replaced a product with software, if you like. And they did everything else behind... all the hard work behind that individual companies have to do themselves, Stripe did all of that, so that all you have to do was insert this one line into your code banks with an API.

And so that's a sort of a metaphor for what's happening in FinTech and we're really excited. I mean, we've got a very small investment in Stripe, which we're incredibly excited. We're really, really lucky to have. Airwallex has been a big success for us. FinXL, which is the largest buy now pay later business in Southeast Asia, has been great, been at home loans.

Some of the people on the webinar today are probably familiar with the Athena who are really disrupting the home loan market in Australia. In terms of our local verticals, health and education are two markets we're really, really excited about. And there's a bit of a focus on those. Software as a service. And so just as a broad business model, all software's moving into cloud, and software's becoming a service rather than the product. That change has been underway for 10 or 15 years, but it's still got a long, long way to go. So we're really excited about that.

AI is sitting across all of that and so many problems in the world today being solved by AI-enabled business models. And I talked about crypto. We were really starting to dip our toe in there. And again, we are doing it in a cautious way. We aren't putting all of our bets on crypto, but one of our colleagues, a number of our colleagues who're really passionate about the area, but particularly [inaudible 00:35:35]. One of my colleagues in Tel Aviv who's been around this world for the last six or seven years.

MH:

Excellent. And the second question is, just before we throw it to the audience for some questions, you've moved to a listed global [crosstalk 00:35:49]-

PB:

Thank you. [crosstalk 00:35:52]-

MH:

Yeah. Which Looks really exciting, but it's a step away from what you're used to be doing. Just interested in what the theory behind that is.

PB:

Yeah, absolutely. And so just by way of context, we've always been investing in young, early stage companies across Australia, Southeast Asia, Israel, as you know, Matt. And these are startups, they're unlisted. Some of them then go through the process of listing it on the stock exchange, et cetera.

We get involved in these companies often for seven, eight, nine. Canva, we invested in nine years ago. UpGuard, we invested in nine years ago. In some cases you're involved in these companies for 10 or 11 or 12 or more years, which is amazing. This new strategy is basically saying we bring a DNA around... We think we bring a DNA and IP around really understanding founder-led businesses. We bring a strong IP around understanding disruptive technology. There's a lot of great, young... And this is a global strategy, as you said, not just focused on the markets that we've been focused on venture strategy.

So companies that are still really young, still very, very high growth, relatively early maturity, but have come onto public markets, that's our sweet spot. So five to $20 Billion market cap, not the mega cap stocks like the Facebooks and the Google. We think we bring a unique... We think we bring a unique perspective. We think we bring a really, really unique perspective, as I said around understanding disruptive technology and founder businesses and Ben Hensman who's been with our team for five years. He was with Fidelity before that.

And again, for us, it wasn't about bringing someone from outside. It was about someone from the team who had that really great of listed markets, but also understanding disruptive technology who's fully immersed in business from a values and culture and relationship perspective. And we are literally I think we'll be making our first trades in the next few days. We just launched that beginning of this month. So just one a week ago. And it's really, really exciting. And it's the biggest new thing we've done probably since we start, we're excited about it.

MH:

Congratulations. And Paul, [crosstalk 00:37:55] to ask how can people on the call access the Square Peg funds?

PB:

Yeah. I mean, probably the best person to get in contact with is my colleague, [Lelani 00:38:07] in relation to both the listed fund, the global tech fund, and also our venture funds. Products are only available to sophisticated investors. Again, that's just sort of a regulatory thing. But if anyone's interested, please get in contact with us and give us a call and we'll be delighted to have a conversation with you.

MH:

Fantastic. Paul, you've been very generous with your time. Thank you so much for your time and your insights. Really appreciate it.

PB:

Thanks. No. really enjoyed the conversation.

MH:

Thanks for listening to this episode of Between Meetings. For more episodes and to subscribe to our series, visit the Netwealth website, iTunes, Spotify, or your favourite listing service. And if you want to contact me or engage or discuss any of the topics raised, please find me on LinkedIn or Twitter, or send me a private message. We hope you can tune into the next episode.