In just a few years a tiny Kiwi startup with big dreams of improving financial capability for kids is now poised to cross the ditch. Banqer, the innovative cloud software that helps kiwi kids learn financial literacy, has always had a goal of overseas expansion. And thanks to the similarities in the Australian school system, they’ve recently expanded into Australia.
After three years of success in New Zealand, CEO Kendall Flutey is expanding the business to Australia for a $16m-a-year market opportunity. It’s a bold and ambitious move that’s taking Banqer down a harder road, but one that will ultimately achieve a huge impact around the world.
Big In New Zealand
The cloud-based software tool designed for kids between the ages of 6 and 12 is now in 500 schools across New Zealand. That means they've reached 20% of all primary and intermediate schools within 3 years.
We’re talking 1300 classrooms and 42,000 students.
There are even teachers who currently use Banqer in the UK, Canada, South Africa and the United States. Simon Brown, Banqer’s Growth Lead, is happy about Banqer’s success up to now, and says the current goal is to have 2200 classrooms using the software by the end of the year (that’s 60,000 Kiwi kids).
Thanks to Kiwibank’s sponsorship, Banqer has an easy revenue model that helps encourage all New Zealand schools to get on board. After a 30-day free trial, Kiwibank covers the cost for primary and intermediate school students to access the programme. Outside of Kiwibank subscriptions, the cost is still reasonable: $3.50 per student, per term.
“When we first started out we were a paid-to-use product, but there was a skew to high decile schools as low deciles couldn’t afford our products. We weren’t comfortable with this. Luckily, Kiwibank heard we’d been looking for solutions and they came on board to offer their help,” says Simon. Now, with Kiwibank’s help, Banqer doesn’t face the same barriers when going to talk to teachers.” Kendall says that;
“Since Kiwibank came on board as our champion sponsor, we’ve seen our low decile classroom count increase fifteen-fold."
"Without their help this wouldn’t have happened, and we would have struggled to introduce Banqer to lower decile schools at a greater rate to higher decile schools, as we have.”
First NZ, OZ, Then The World
In Australia, Banqer has partnered with Netwealth – a superannuation fund –and the Financial Planning Association of Australia (FPA). Kendall says the expansion into Australia happened pretty organically, “similar to how the Kiwibank relationship came about."
She pitched Banqer at Afiniation, an Australian start-up fintech event at the end of 2015 and won Best in Show, beating out 29 other fintechs. “Netwealth were at the event and we stayed in touch. Over time we got to know them better and it became clear we could work really well together.” Earlier this year the partnership was formalised with Netwealth committing to providing Banqer free of charge to 15,000 Australian primary students in their first year.
Kendall met with the FPA 6 months ago at Banqer’s launch event in Sydney. Shortly after they came onboard as a partner, providing teachers with the opportunity of extra support from financial planners in their community. She says,
“It was clear straight away that their intentions were good and they were extremely passionate about the outcomes Banqer could have in Australia.”
This is a similar course to what has helped Banqer to scale in New Zealand, which is largely attributable to their partnerships, most notably the partnership with Kiwibank. “Having that kind of rapid scale means that we have been afforded the luxury of assessing international possibilities earlier than anticipated,” says Kendall.
“Having New Zealand’s largest Kiwi owned bank adds just a touch of credibility to your name which certainly helped us in our expansion.”
Australia may be their first foray into international waters, but Banqer has already made headway on their expansion in the UK. They currently have a handful of schools on board, and are working with educational product distributors to expand their reach there. Simon says that they’ve put out their feelers to banks, “but it’s still early days. We’re having conversations, and our goal is to have 100 classrooms by the end of 2018.”
He says that entering the UK market was a natural progression as it’s an English speaking country with a big population base under one financial system. “Financial education in England is mandatory, to a certain extent,” he adds. Once they hit their targets in the UK, Banqer has their sights set on entering the US market.
Knowledge Is Power
Financial illiteracy is a global problem and one that Kendall knows Banqer has an opportunity to provide a solution to, no matter where in the world that might be. What excites Kendall the most is the potential of cracking into international markets. “The sheer scale of them means the collective impact we can have in Australia and the US is far greater."
"We can change the course of millions of kids’ lives which is phenomenal when you think about it.”
However, global expansion is not without its challenges. “From a company perspective, it was a challenge adapting to the way things are done in Australia. That’s in terms of business practices, and the schooling system.”
Kendall says that Banqer has more local considerations than a traditional SaaS product, which does make scaling on an international level more challenging than a product that merely has to change the language to enter a new market.
“We have economic and curriculum considerations to keep in mind. That said, Banqer represents a new wave of educational resources that are far more scalable than their labour intensive counterparts.”
She adds that by providing teachers with the resources and support that they get through Banqer to integrate financial curriculum to their classrooms. When this is done well, the product is contextualised for the domestic market and can scale quickly.
While different schooling systems pose a challenge, Kendall isn’t letting anything slow Banqer down. And she’s got advice for any ambitious Kiwis looking to enter international markets. “If your startup has international ambitions then I think expanding beyond New Zealand as fast as possible is a really important step. New Zealand is a brilliant market, but you’ve got a certain set of biases on your side that can lull you into a false sense of security. There’s less competition, smaller degrees of separation, a lot of support from strong start-up eco-systems, low levels of regulation and red tape, and bunch of other factors.”
The Secret To Banqer’s Success
Kendall thinks there are a number of things Banqer – both the product and company – do that have set the company up for international growth. She believes that aligning Banqer’s values with its business objectives has been vital to its success overseas. “Staying true to our original purpose has attracted some amazing team members, which in turn has fueled our growth.”
Want to find out more? Read how Kiwibank and Banqer are working together to support the next generation of Kiwis on the Banqer site. You can also find out how to get Banqer and interactive financial literacy into a classroom you care about.