Early salary access concept dumped over privacy concerns, in favour of micro-investing

Waddle co-founder Leigh Dunsford’s Nine25 has abandoned a money management concept over privacy concerns and after raising $1.5m is concentrating on a micro-investment offering.

Nine25 founder Leigh Dunsford, a co-founder of now Xero-owned business Waddle.

The co-founder of Waddle who, after selling the business for $31m to ASX-listed cloud accounting platform Xero developed a similar concept for consumers in which they could access their salary as they earned it – has now ditched the idea altogether.

Leigh Dunsford was one of three schoolmates – with Nathan Andrews and Simon Creighton – who in 2014 founded the lending platform, which provides businesses with a line of credit valued up to 85 per cent of their outstanding invoices.

Xero paid Mr Dunsford and the co-founders $31m for Waddle in August 2020. Within 12 months of acquiring it, the company had entered into a partnership with the nation’s largest bank, the Commonwealth Bank, which appears to have been the precursor for a complete sale of the business to CBA last week.

Just months after the sale, Mr Dunsford had begun work on another project – a fintech start-up called Nine25 which was designed to enter the space of money management.

Nine25 was founded on a similar concept to Waddle but has now ditched the idea altogether, telling The Australian it gave employers too much insight into their staff’s finances.

“The primary reason for that was the products couldn’t be delivered to a consumer without the employer having full visibility over those transactions,” Mr Dunsford said.

“Every time an employee draws money from the platform, the employer has visibility of those transactions.

“What we found is that corporates and the like weren’t too receptive to the idea of still providing access to people’s own wages even though it was money that they’ve effectively earned.”

Nine25 is now concentrating on micro-investing – a concept which allows people to invest micro-amounts – building out the capability into the start-ups app. That’s been the main focus after the business closed a $1.5m capital raising late last year.

“We find it hard to believe but younger people still believe they need a lot of money to get started in investing,” Mr Dunsford told The Australian.

The company has partnered with Australian investment-as-a-service platform Cache, which can integrate into apps to provide investment products. Investments now start from as low as $1.

Nine25 has curated about 14 investment options for app users, however just four will become available on the app from next week.

Those are called Top Aussie & Global which targets ETFs, Bling which includes investment in gold and silver, Tech Heavy which targets tech companies and an option called Robotics and AI targeting companies in those industries.

Mr Dunsford said there had been an interest from Nine25 users early on in an investment option, so the start-up had spent the past 12 months researching the kind of companies younger people wanted to invest in.

The idea behind Nine25 was not to replace banks but to make up for their shortcomings in meeting consumer needs, he said.

“We’re not advocating that we’re a replacement for your bank account; we’re definitely not that, what we are is we’re an alternative space where you can portion money to invest regularly and obviously spend money and make payments,” he said.

Neobanks, which, he said, provided better experiences than traditional banks, “didn’t solve the critical issue for consumers”. “They didn’t give people or younger people in Australia a pathway to build wealth,” he said.

Nine25 would still seek to provide some money management, and planned to roll out an automated bill-paying function once the app reached 50,000 users. The app currently has a bit under 20,000.

The new service would give a user insight and allocate money for impending bills and provide an assessment of what a user could do with the remaining funds, including an estimate of how much they could invest, he said.

Originally published as Early salary access concept dumped over privacy concerns, in favour of micro-investing