Trading platform Superhero eyes offshore markets and super for growth strategy

Share-trading platform Superhero is considering expansion opportunities ahead of a planned initial public offering next year.

While 39 per cent of Australians in the 18-45 age group invest in local equities, about 17 per cent trade US shares – for whom Superhero offers a zero-brokerage service. Picture: NCA NewsWire/Gaye Gerard

Share-trading platform Superhero plans to use the proceeds of its recent $15m capital raising to expand into other offshore markets and grow its superannuation business.

While 39 per cent of Australians in the 18-45 age group invest in local equities, about 17 per cent trade US shares – for whom Superhero offers a zero-brokerage service.

Chief executive John Winters said Superhero’s technology was scalable in other countries, with Asia and Europe seen as “exciting opportunities”. “No one is tapping into those markets from Australia,” Mr Winters said.

Superhero Super, which has 2000 members after launching six weeks ago, enables account holders to invest in ASX-listed shares and exchange-traded funds without a self-managed super fund.

Mr Winters said the super offering was a key point of difference to Superhero’s rivals; among them emerging players such as Stake and SelfWealth.

The company offers two kinds of super account – autopilot, where up to 30 per cent of the balance is invested in different themes, and control, where up to three-quarters of the account is allocated to shares and ETFs and the remainder goes into Superhero’s diversified portfolio.

The super business is predicated on an acceptance that the richest one per cent of the population benefit from compounding returns on capital and income, not just a return from their labour.

Superhero and its rivals have ridden a wave of cashed-up new investors from the millennial and Generation Z demographics, driven by Covid-19 lockdowns across the country.

The company, which launched a year ago, already boasts 120,000 members across the group, attracted by the lure of financial independence and the ability to trade local shares and ETFs for $5 a pop.

Zero brokerage is charged on US shares and ETFs.

Completion of this week’s raising means Superhero has tapped investors for $48m since its inception in 2018.

Previous capital raisings have attracted the likes of Larry Diamond, co-founder and chief executive of buy now, pay later group Zip Co, and Nick Molnar, co-founder and chief executive of Afterpay.

Formerly a private wealth manager at stockbroker Shaw and Partners, Mr Winters was involved in the Zip initial public offering.

His Superhero co-founder Wayne Baskin was on the Afterpay advisory board and is currently the chief technology officer and deputy chief executive of online retailer Booktopia.

With $15m banked from the last raising, Superhero is aiming to follow the same IPO path as Zip and Afterpay, most likely in 2022.

The benefits would include better access to capital, and the ability to continue charting its own course rather than being at the mercy of the venture capital industry.

In the meantime, Mr Winters agreed that a “land grab” for new customers was underway, just like in the BNPL industry.

“Absolutely,” he said.

“Everyone is after a slice of the pie, but the pie is getting bigger.”

Along with Superhero, both Stake and SelfWealth have surged past 100,000 customers. Bank-owned brokers have not been ignored either.

Commonwealth Bank-owned CommSec added more than 550,000 new accounts to its trading platform in the 2021 financial year.

Mr Winters said Superhero always expected more competition to enter the market.

“But our questions when we see new competitors is whether they are like-for-like and what corners they’re cutting with data,” he said.

“We have data licenses with the ASX and NASDAQ, whereas they use other data providers with smaller market shares.

“In Australia there are only two exchanges – the ASX and Chi-X – but there are multiple exchanges in the US and stocks can trade at different prices, which means the best investment decisions depend on the quality of the data you’re getting.

“(Competitors) might have cut their prices but they have an inferior offering.”