Investment notes – Deputy

Led by Tushar Roy.

We’ve invested in Deputy’s US$81m Series B round alongside Institutional Venture Partners, Openview and Equity Venture Partners. Deputy is second-in-command to the “Sheriff”, which in this case is more than 90,000 workplaces globally.

To help you understand why we invested, and to celebrate the impact that Deputy is having, we’re releasing our investment notes.

L-R: Tony Holt, Paul Bassat, Ashik Ahmed, Tushar Roy

L-R: Tony Holt, Paul Bassat, Ashik Ahmed, Tushar Roy

But before we do, we want to call this photo out. One of the things we love about Ashik is that he replicates this photo every time he closes a fundraise. Why do we love it? The team celebrates Deputy’s continued success by putting its customers front and centre (in this case, Gelato Messina, one of Deputy’s first customers).

What is Deputy?

Deputy is the ultimate employee management tool, simplifying scheduling, timesheets, tasks and workplace communication, helping businesses to transform operations and empowering employees to work the way they want.

Deputy connects businesses and employees seamlessly through technology to make work easier and has been used by over 1 million people across 80+ countries.

The business was founded in Australia in 2008 after co-founder Steve Shelley asked Ashik to develop a solution to business problems he experienced while running his former company of 100+ people, providing cleaning and cargo services to airline and freight companies. The software soon became Steve’s “deputy” in the day-to-day running of the business, and together, Ashik and Steve set out to expand the software’s capabilities for other businesses. Today, Deputy has 200+ employees across global offices in Australia, the UK and the US.

A large, growing problem

Shift work is on the rise, in both big and small business.

What your barista or baggage handler is unlikely to strike up a conversation about is that often, managing their schedule, claiming overtime, swapping shifts or dealing with timesheets can be a total nightmare, and an experience largely still stuck in the dark ages of pen and paper, whiteboards, or — if you’re fancy — Excel.

What’s also not often seen is that managing this from the other side of the hotel reception, bar or stock room, is a manager… silently going out of their mind. “Jane only works Tuesdays and Thursdays but wants an extra shift next week. Mike is sick and can’t come in on Tuesday. Annie can work that day but has she already done too many hours this week for her award level?” It’s enough to make your head explode.

This isn’t a small problem:

  • Hourly paid workers account for two-thirds of the global workforce. In the US alone ~107 million people are paid hourly.

  • Small business owners spend ~20% of their time on admin tasks like this — time that could be spent on customers.

  • The complexity of workforce management is increasing as adjacent services specialise and move online: payroll, superannuation, accounting, compliance and risk management, performance management etc. 
    While administrative tasks relating to workforce management can appear simple in isolation (e.g. clocking people in or out of a shift, approving leave, swapping shifts, posting a task), in aggregate they have a disproportionately huge impact on the ability of a business to thrive, because people are central to business success.

Enter Deputy

Deputy’s platform helps any business with hourly-paid workers manage them more efficiently and effectively. And to date, their impact has been hugely impressive:

  • Over 90,000 businesses are now powered by Deputy — whether their business is renting designer clothing in Sydney, running escape rooms in Utah, serving coffee in Cape Town, or providing hospice care in London.

  • They’re serving customers in over 80 countries, from coffee roasters in Honduras, to those chasing the Northern Lights at the edge of the North Pole!

  • Over 1.5 million people have worked using Deputy.

  • They’ve rostered over 200 million shifts — clocking 1.2 billion hours of work on Deputy; facilitating over $30 billion in payroll.

Its product is elegant in its simplicity while being intelligent enough to handle behind the scenes the myriad of complexities of managing people.

Want to clock on for a shift from your mobile phone when you walk into the store? Check. Can’t make it into work and want to see if your mates can cover? Done. Worked overtime on weekends but can’t remember what the hourly rate you’re supposed to be paid is? Sorted. And so much more. And even more to come.

There are many unique things about Deputy that made us love the business.

● The same product can service not only the neighbourhood café with five staff but also companies like NASA, Qantas and others with thousands of hourly-paid workers. It is very rare to find a product that can scale like this to meet such varying demands.
● Its users are its salesforce. Deputy’s shift workers love the product so much that they take it with them to other places where they work shifts. This kind of viral, social-network-like growth is also extremely rare in a SaaS business. 
● Deputy is loved by both shift workers and managers alike and has one of the highest NPS scores we have seen.
● The team has an unerring focus on product-led growth: build a product so delightful that it literally sells itself. It is this focus that has led to Deputy achieving its phenomenal growth without an outbound sales force.
● With 300+ product integrations, Deputy plays nice with other best-in-class tools for payroll, accounting and beyond.

For all these reasons, Deputy is experiencing accelerating growth. It’s not just growing, it’s growing faster.

And the most exciting aspect is that even with many tens of millions of shifts scheduled every year using Deputy, they’re just getting started. With a product that can work “out of the box” almost anywhere, the World is its oyster.

Joining a values-led team

We have got to know Ashik, Steve and the Deputy team over the last few years and have an enormous level of admiration for the way in which they are focused on solving a really important problem for both employers and hourly paid workers around the world.

The team’s passion to create a beautiful product that users fall in love with is infectious.

Deputy holds the potential to become one of the most exciting businesses produced in Australia: locally founded but global in its impact.

It is a values-led organisation which is passionate about being a great place to work and providing great outcomes for its users. We are excited to join the movement to put #everyshiftondeputy!

Congratulations again and happy 10th birthday!

Read Ashik’s blog post on the announcement or check out career opportunities with the team.

Investment notes – Athena Home Loans

Led by Paul Bassat and Ben Hensman.

Meet Nathan Walsh and Michael Starkey, co-founders at Athena. They know that when people buy a home, they don’t dream of owning a home loan, they dream of paying it off.

We’ve just led a $25m Series B round into Athena, a fintech company who’s purpose is to radically change mortgages so that you own your home sooner.

This is our second investment into Athena and it marks a significant milestone for the team for many reasons (see below!)–especially as they secured an investment by Hostplus, an important endorsement of Athena’s model and its alignment with superannuation funds.

To help you understand the rationale for investing, and celebrate the real improvement that Athena is leading, we’re releasing our investment notes.

This is a long read, with analysis on the market, the model and the team. We hope you enjoy it!

L-R Michael Starkey and Nathan Walsh

L-R Michael Starkey and Nathan Walsh

But first, before you get into the investment thesis: join Athena’s waitlist or check out career opportunities online.

The $1.7tr problem.

Buying a home is a pretty huge deal; not only is it likely to be the biggest financial outlay of your life, but it is often an emotional investment. Most people can’t afford to buy their own home outright and upfront — it’s commonly expected that we pay for our home over time using the financial instrument known as mortgages.

Mortgages are the engine of home ownership, helping prospective home buyers fund the gap between the price tag on the house and the amount of cash in the bank.

Some quick stats:

  • In Australia, about 34.5% of occupied homes are mortgaged homes — and the industry is valued at a whopping A$1.7 trillion.

  • Roughly A$440 billion in mortgages are written every year, of which around A$90 billion are loans being refinanced with another provider.

  • On average, consumers stay with a mortgage provider for 5–6 years– the mortgage term itself is up to 30 years.

  • The banking system in Australia generated A$52 billion in pre-tax profits last year, the largest chunk of which came from mortgages.

Relative to the size of the Australian economy and our population, these are extraordinary figures when compared with other geographies.

Servicing this enormously profitable and important market are — you guessed it — the big banks of Australia. For historical context: following the Global Financial Crisis, the large banks in Australia moved from a <70% market share in mortgages to a dominating >95%, with the Big 4 taking the lion’s share. The Commonwealth Bank has a 25% market share alone, worth $413B in oustanding balances.

But why does this matter?

As the current Royal Commission continues to highlight, there is a fundamental lack of alignment between the banks and their customers.

This is a serious problem. Over the past few years, the Big 4 have charged existing customers 32bp more on average than new customers. Let that sink in. The more loyalty you show to your mortgage provider, the more they charge you. Substantial fees and charges are common both upfront and when you try to switch mortgage providers, making it unattractive to go after a better rate. This also means that the real rate you pay over the life of the loan is materially higher than the headline rate you sign up to.

Another issue is the proportion of mortgages originated by brokers, which is over 50% of the market each year. In many ways, brokers actually help consumers by finding them the best rate and explaining how a mortgage actually works. But they also get paid commissions to bring customers to the banks, which inflates the cost of the loan and means a higher interest rate for consumers. Critically, it means that the bank doesn’t need to build a trusted relationship with you. You’re just another line item for them.

Poor treatment of consumers has created a lot of resentment towards mortgages as a product and the banks that provide them. We think all of that can change.

There are also broader market trends that lead to this market being particularly attractive for disruption. Big banks size and culture are designed to deliver large financial results, rather than focus on customers. As deposit-taking institutions, banks are heavily regulated; their infrastructure and systems are incredibly complex and their cost structures are bloated.

For such reasons, big banks aren’t well placed to maintain their current position against challengers. It’s time for a better solution.

Meet Athena.

Imagine a mortgage provider that values loyalty and automatically provides you with the best possible rate, as well as rewards you over time with discounts. Imagine having a single, clear rate with no hidden fees or charges. Imagine a data-driven, simple application experience that can be completed on your mobile, or with assistance from a real mortgage expert where you need it. Most importantly, imagine a mortgage provider that wants to help you pay off your loan faster. Enter Athena Home Loans.

Athena is the first home loan challenger to pursue a truly “full stack” model, controlling the experience end-to-end, from attracting and engaging customers and originating loans, through to its own funding sources. As a digital native without the legacy systems of incumbent mortgage lenders, Athena can offer a high-quality, reliable, flexible and efficient customer experience.

For customers. the simplified value chain means that they’ll be able to remove layers of cost like brokers and manual handling of documentation, enabling sustainably lower rates.

On the funding side, the business is exploring direct funding of their loan book via superannuation funds and other institutions, a model that has worked successfully in the Netherlands. This would allow the removal of numerous financial intermediaries, providing better returns to institutional investors and sustainably lower pricing for consumers.

We think the combined impact of these innovations is huge for consumers — real examples from the pilot to date show this impact. A single mum will pay off her home loan 19 months earlier and save $130,000. A family with three young kids who have saved $40,000 on their home loan are taking their first family holiday in years. These are powerful stories highlighting the real impact of Athena.

But let’s not underestimate the challenge here: pitching yourself against some of Australia’s largest institutions is a real David and Goliath battle requiring an exceptional team with huge ambition…

So, meet the team.

We first met Nathan and Michael in early 2018, Athena was a pre-product, pre-revenue company. Their deck was 24 pages long, and their team featured right at the front; here’s why…

Michael and Nathan are a rare combination of strong financial services expertise with a sober, driven and focused approach to executing on a really ambitious vision.

When we meet founders, we want to hear about their past experience and think “Yes, their whole life has been about consciously or unconsciously laying the foundations for this company”. That’s because the best companies start with a really deep understanding of the problem. This is exactly how we felt when we first met this team.

Nathan Walsh, Athena’s CEO, is a former NAB executive who started his career with BCG before taking senior roles at Citi and NAB in wealth management. At NAB, Nathan founded Nabtrade and built it from an idea into a $40 billion platform over 7 years, winning multiple innovation awards along the way.

Michael Starkey, Athena’s COO, has an entrepreneurial background, having been the co-founder of iSelect in AU. He spent 7 years at NAB in personal banking, was a board member of the Australian Payments Council and former director of the New Payments Platform (Australia’s new real-time payments network).

If you were to build a mortgage company in Australia, you’d want Michael and Nathan at the helm.

This is a founding team who understands what’s broken in mortgages from within the machine. They know how and why mortgages are broken and are pioneering a new business model to solve it.

Athena Team Nov 2018

But wait, there’s more.

Dynamic, diverse and capable teams drive success in startups. Founders who can convince exceptional people to join their team have a better than average chance at building a really significant business.

Nathan and Michael’s team are the exact kind of executive leadership that we love to work with: a unique blend of technical, corporate, startup and scaleup experience necessary for building an industry-disrupting Fintech company.

Meet five senior members of the team.

  • Peter Georgiou (CTO) — Former Head of IT at Atlassian (10+ years) and senior IT manager at Macquarie Bank (10+ years).

  • Natalie Dinsdale (CMO) — Co-founder Ubank and digital marketing experience at Tyro, Virgin, Citi, Egg Banking.

  • Esse Turnbull (CXO) — 20+ years in UX/design roles with customers such as BT, NAB, Westpac, AMP, OFX and Macquarie.

  • Mira Hohn (CPO) — Change management and transformation at financial institutions such as Deloitte, NAB, HSBC. A former head of platform development at Nabtrade.

  • Joe Seychell (CRO) — Significant experience in Risk at NAB (9+ years) and ANZ (3+ years), most recently in collections, hardship and valuations.

Investing in the future of fintech.

Joining the ranks of companies such as AirwallexCanva and Culture Amp, who have raised over $20 million this year, this $25 million Series B takes Athena’s total raised to $45 million — a great position to be in as Athena looks to launch their brand in the first half of 2019. We are thrilled to be joined by Hostplus and Airtree in this round.

In addition to Athena, we’ve invested in Prospa (small business lending), Airwallex (FX payments), Kredivo (consumer lending in Indonesia), Agridigital (agri-financing) and Stripe (payments).

If you’re building an outstanding, industry-defining company — be that in fintech or not — we’d love to know you.

Hiring a Legal, Risk & Compliance Associate

Join the Square Peg Team

Square Peg is a global venture capital firm whose mission is to back the most outstanding entrepreneurs solving important problems. When done well, we know that this helps to create world-changing and industry-defining businesses such as Prospa, Fiverr and PropertyGuru whom – along with thirty other ambitious companies – we are proud to partner with.

As a team, we have built, financed and worked in startups that are global success stories. We know what it's like to sit on both sides of the table. As a result, we are passionately committed to building a venture firm that is the world's best for entrepreneurs, investors and our team. Currently, we invest over half a billion dollars into early-stage companies from our offices in Sydney, Melbourne, Tel Aviv and Boston.

We are an equal opportunity employer and value diversity. We do not discriminate on the basis of race, religion, colour, national origin, gender, sexual orientation, age, marital status, veteran status, disability status or sporting team affiliation.

Role

This is an amazing opportunity for a curious legal mind keen to broaden their experience in a dynamic commercial environment, in a role that is rare to find.

As a venture capital fund manager, we have a broad legal requirement across many business facets including,

  • Investing – due diligence, documentation negotiation and drafting (term sheets, shareholder agreements, share purchase agreements)
  • Funds management – fund structuring, research and set up and documentation;
  • Compliance and regulation - AFSL licensing, developing policies, corporate secretarial,
  • training and keeping abreast of changing regulation;
  • Corporate – negotiation of supplier contracts and general corporate legal duties.

It is crucial you are an independent thinker with energy and enthusiasm to effect positive outcomes both operationally and commercially in a high growth business. You will report to the Chief Operating Officer and work effectively across the business and will build collaborative relationships with internal and external stakeholders including entrepreneurs.

This is a dynamic business, anticipating further strategic evolution and you will be responsible for the organisation and management of new initiatives from a legal and risk perspective as they arise. The potential to expand the role is expected for the right candidate. The role will require understanding of financial information, so any finance experience will be considered favourably.

This role will be based in Woollahra, Sydney. 

Qualifications / Experience

  • This role would suit a legally qualified candidate with prior experience in a law firm, and most recently with a fund manager or investment house. Private equity or venture capital experience may be advantageous but is not a prerequisite.
  • It is essential that you can build strong and effective relationships both internally and externally.
  • 2 - 5 years’ experience legal experience in a legal firm or in funds management, private equity or venture capital
  • Tertiary degree in law is a minimum
  • To explore further in confidence, please send your resume to amanda@squarepegcap.com

Hiring a Senior Accountant / Senior Fund Analyst

Join the Square Peg team

Square Peg is a global venture capital firm whose mission is to back the most outstanding entrepreneurs solving important problems. When done well, we know that this helps to create world-changing and industry-defining businesses such as Prospa, Fiverr and PropertyGuru whom – along with thirty other ambitious companies – we are proud to partner with.

As a team, we have built, financed and worked in startups that are global success stories. We know what it's like to sit on both sides of the table. As a result, we are passionately committed to building a venture firm that is the world's best for entrepreneurs, investors and our team. Currently, we invest over half a billion dollars into early- stage companies from our offices in Sydney, Melbourne, Tel Aviv and Boston.

We are an equal opportunity employer and value diversity. We do not discriminate on the basis of race, religion, colour, national origin, gender, sexual orientation, age, marital status, veteran status, disability status or sporting team affiliation.

Role

This will be a diverse role in which you will take ownership for all aspects of fund / financial accounting, corporate accounting, and financial reporting, monthly board and management reporting, forecasting, budgeting, financial planning and analysis, financial modelling, tax and structuring.

You will report to the Chief Operating Officer.

This is a dynamic business, anticipating further strategic evolution and you will be responsible for the organisation and management of finance related projects as they arise. The potential to expand your remit to include other matters currently covered by the COO is a given for the right candidate.

This role will be based in Woollahra, Sydney.

Qualifications / Experience

It is crucial you are an independent thinker with energy and enthusiasm to effect positive outcomes both operationally and commercially in a high growth business.

You will work effectively across the business and build collaborative relationships with internal and external stakeholders. You will also manage the fund financial statement audit and annual tax distribution preparation process as well as participating in improving the accuracy and efficiency as the company grows.

This varied role would suit a CPA/CA qualified candidate (Big 4 trained highly desirable), with a proven track record derived from investment/funds management. Prior experience within a funds management environment, especially private equity or venture capital, would be advantageous but is not a prerequisite. It is essential that you can build strong and effective relationships both internally and externally and have demonstrated success in investment and fund management. Successful applicants will be able to display a proven technical finance and fund accounting background including corporate accounting.

We expect you will have 5+ years of experience.

To explore further in confidence, please send your resume to amanda@squarepegcap.com

Introducing a Model Code of Conduct for the Australian Startup Community

By Paul Bassat.

It is a great moment in time to be a part of Australia’s startup community. There has never been a better time to start a company here. Collectively, we need to ensure that opportunity is wide open to those who seek it and that the startup community reflects the dynamism and diversity of the wider population.

Today we are launching the first version of a Model Code of Conduct for the Australian Startup Community (Code).

Blackbird Ventures, Startmate, Airtree Ventures, Square Peg Capital, Rampersand and Blue Sky Venture Capital have been working closely to draft this Code in collaboration with a San Francisco-based Diversity & Inclusion expert.

As of today, we have all adopted the Code, and invite others in the Australian startup community to do the same.

This is just a starting point. We hope to version it over time and improve on it with the input of others in the community.

Why do we need a Model Code of Conduct?

We know that a code of conduct does not by itself ensure a healthy culture. But we do believe that a code of conduct has a role to play in creating a welcoming and inclusive environment for marginalised groups.

It is useful because it clearly articulates to all members of an organisation or community what standards of behaviour are expected.

Being part of an organisation, event or community is a privilege, giving you access to valuable advice, network and capital. But with that privilege comes a responsibility to behave appropriately to others in the community. We think there is value in specifying exactly what those responsibilities are.

Many people from minority groups have been victims of the behaviour listed in the Code. Seeing it spelled out sends a strong signal that they are welcome and safe in your organisation or community.

We have created the Code because it is essential for organisations to have clear processes something goes wrong, so no one finds themselves out of their depth and without any guidance. When you don’t know what to do, you may do nothing. This is the danger the Code protects against.

Where so much of our professional lives bleed into our personal lives, there is much room for error. We acknowledge that, in the majority of cases, errors of judgement are often matters of degree. We hope this Code encourages all of us to reflect more deeply and maintain a greater sense of awareness for how our actions may impact or be perceived by others.

What this Code says

This Code is designed to apply to a variety of organisations from venture capital funds and accelerators through to startups, co-working spaces and conferences.

It covers online and offline interactions.

The Code is intended to apply broadly to everyone associated with the organisation, including, but certainly not limited to, employees.

This is important because many interactions in the startup community occur in situations where the traditional protections of employment law are not applicable. For example, situations between tenants in a co-working space, between a mentor and mentee in an accelerator, or between attendees at a conference or meetup.

This Code is designed to fill those gaps.

This Code clarifies what a sexual advance is and when it is considered unacceptable. It calls on people to consider whether they exert power over another person, and if so, whether their behaviour might be considered an advance that should be avoided.

However, the Code is not just about sexual harassment.

It is also about offensive language. It is about how sexualised environments can be allowed to form that are in themselves harmful. It is about how these environments can also increase the probability that an act of harassment or assault may occur.

The Code is not merely aspirational. It sets out how reports can be made and what actions may be taken.

Importantly, it does not set out a framework for mandatory reporting.

It is worth explaining why. Although at face value mandatory reporting has merit as a tool to discourage bad behaviour, in reality, it results in creating a less safe environment. Marginalised people are less likely to report when they do not feel they have control over the outcome. Ultimately, people need to use their own judgement to decide when to report something.

Why it’s important to Square Peg to adopt the Code

There is no excuse for sexual harassment. Not now, not ever.

As startup founders, investors, advisors and now venture capitalists, our experience teaches us that the best businesses are built by diverse teams, brimming with creatively talented and technically excellent people doing their best work.

For an ecosystem to thrive, seamless interactions that supercharge the goal of people doing their best work is similarly necessary.

Outstanding work does not happen where harassment of any kind happens.

With the creation and adoption of this Code, we are proud to reaffirm our commitment to building safe and healthy communities that are diverse and inclusive. We hope all organisations adopt the code.

Importantly, at Square Peg we are also focused internally on this challenge. Last year, we took the Diversified Israeli Tech pledge and hired three exceptional people into the Square Peg team: YuliyaLeila and Imogen. We’re educating ourselves on the role of unconscious bias, and use tools such as Applied to make better hiring decisions. We co-created the VC / Founder Office Hours initiative and support programs such as Remarkable that are championing change. In Israel and Boston, we have joined a similar initiativeto eradicate sexual harassment and prevent predatory behaviour. These are small but important steps. All of these efforts are ongoing — and while we have lots to learn, they’re part of a movement to diversify an industry that clearly needs to do better.

You can find a copy of the Code and how to report a violation on the Square Peg website–we encourage you to use this process. Amanda Hjorring, Barry Brott and Alfie Nehama (Deloitte) are forming a committee to handle all claims in Australasia.

Thank you for reading this. We look forward to working with you to help build our community stronger.

Part of the Square Peg Portfolio

Addressing Sexual Harassment and Predatory Conduct in the Israeli Venture Capital Industry

By Dan Krasnostein.

We believe that it is a great moment in time to be a part of the Israeli startup community — there has never been a better time to start a company here. Collectively, we need to ensure that opportunity is wide open to those who seek it and that the startup community reflects the dynamism and diversity of the wider population.

Unfortunately, we have seen a rise of unacceptable behaviour towards and harassment of women and marginalised people globally, across industries. Sadly, the Israeli VC and high-tech ecosystem is not immune.

There is no excuse for sexual harassment. Not now, not ever.

And that is why we, along with more than 35 other venture funds in Israel, have come together and adopted a unified Anti-Harassment Policy.

As a global venture capital firm, we want to ensure that we are supporting entrepreneurs and combatting sexual harassment in all ecosystems within which we work. To this end, we have adopted policies to cover all regions. We have written about the Australasian policy and uploaded both policies to our website.

Statement on behalf of all funds:

Statement on behalf of all funds.png
Israel-VC-Sexual-Harassment-Pledge.png

Slides to put in your pitch deck

Also known as “how to pitch for money from VC.”

There are 571,000 results for that exact question on Google, yet we get asked for advice almost daily.

Some of the articles online are filled with spectacular advice; other results are absolute nonsense.

Sorting through the chaos-that-is-the-internet to get to the good stuff is a swirling black hole of a time sink.

So, we’ve done it for you.

Below, we've distilled our collective knowledge to explain what we look for in a pitch deck, and then below that is a list of other articles we think are excellent and you should read.

Read the full post on Medium. 

8 steps to a better pitch deck

Investment notes - Agridigital

Co-authored with Tony Holt.

By any standard, the agricultural industry is immense in both scale and complexity, responsible for feeding billions of people and employing roughly 40% of the world’s working population.

It has also been identified as the least digitised industry in the world — rife with inefficiencies and opportunity.

We’ve been watching the space with interest for the last few years, hopeful that we would meet an extraordinary founder with the tenacity and technology to revolutionise Ag as we know it.

That’s why we are excited to back Emma Westonand AgriDigital, a commodities management platform bringing trust and transparency to agricultural supply chains.

Bob McKay, Emma Weston, Ben Reid.

Bob McKay, Emma Weston, Ben Reid.

Where does your avocado on toast come from?

Globally, the answer would probably be “Errr… I’m not sure”.

When a commodity such as wheat is grown by a farmer, it passes through an incredibly complex supply chain of buyers, financiers, storage, transportation and processing facilities before it gets to you.

In such a vast and important industry, it is astounding that underpinning multiple layers of transactions — both financial in the form of payment, and physical in the form of grain — are handshake agreements (often never documented), reams of paper contracts, handwritten receipts and hastily edited ownership documents.

In short, it’s a mess.

And the pain is felt across the agricultural supply chain:

  • farmers don’t get paid for what they deliver when they deliver

  • buyers and financiers can’t verify provenance of commodities (or where their commodities are)

  • consumers don’t know where their food comes from

When you factor in not-so-unusual occurrences such as multi-million-dollar insolvencies, food-safety scares and food fraud (which adds up to US$40B per year), there is a huge need for safe and secure commodity tracking for all participants in the agri-supply chain.

And from within the industry grew the solution.

The AgriDigital team share a clear vision for a platform that would enable:

  • users to buy and sell agricultural commodities with confidence

  • financiers to access live, accurate and verifiable information on asset location and valuation

  • buyers and consumers to verify the provenance of the commodity

In bullet-points, this reads very simply. Almost too simply.

In practice, AgriDigital’s platform enables a radical improvement in operational efficiency, which allows for:

  • same-day payment for farmers and buyers

  • flexible contracts with integrated communication — contracts are fast to create and stored in the cloud with parties notified in real-time at contract creation, amendment and completion

  • digitised deliveries with weighbridge and quality testing instrumentation integrations — delivery to payment occurs in seconds using IoT integrated facilities

  • paperless, automated invoices — manual invoicing can be completely removed

  • seamless payments on a same-day or agreed-term basis simplified reporting for all users and automated levy and end point royalty collection and remittance.

For growers, in particular, digitisation will help reduce the burden of risk they shoulder when they transfer ownership of grain without receiving payment. Providing the ability to track commodities from the field will open up financing for growers earlier in the supply chain.

It’s democratisation at work (and it’s working).

The team launched the platform in 2016, focusing on the Australian grains market. Since then, they’ve transacted over 1,500,000 tonnes and have over 1200 active users. Shortly to launch in North America, the team are also expanding the platform to include other bulk commodities.

Utilising Blockchain.

Importantly, Emma and the AgriDigital team see the platform as a foundational piece of agriculture infrastructure, with the flexibility to use cutting-edge technology to increase transparency and efficiency.

The platform has been designed to evolve so that advances in other technology, such as IoT connected devices, are able to plug straight into the platform. Currently, AgriDigital is prototyping the use of IoT connected devices in grain silos and throughout the grain supply chain to improve the accuracy of supply-chain reporting and to ensure users have access to live data on their agricultural commodity assets.

The combination of IoT connected software and financial transactions means that the agricultural supply chain has clear blockchain applicability.

Which is where we found ourselves leaning in even further. Emma and the team are some of Australia’s leading experts in the application of blockchain technology. In fact, the team has already made global history. In 2016, they connected AgriDigital to a multi-node private Ethereum blockchain network and completed the first-ever live, in-market settlement of an agricultural commodity on a blockchain between a grower and buyer.

No wonder we’re excited.

When speaking to AgriDigital customers, we heard again and again that the ability to manage commodities efficiently and with high transparency is an absolute breakthrough for such a complex, manual and paper-dominated industry. The feedback was truly overwhelming: this platform solves a really painful problem.

Plus, with one platform able to solve issues up and down the supply chain, the network effects of AgriDigital are obvious. It’s an incredibly smart solution.

Which leads us nicely into the phenomenal AgriDigital team.

AgriDigital was founded in 2015 by Emma Weston, Bob McKay and Ben Reid. This is a team that deeply knows agriculture, with over 80 years experience between them. Emma is a blockchain expert, sits on the board of FinTech Australia, and has a crystal-clear vision for the business. She is exactly the founder that we love to partner with: deep technical knowledge, smart and ambitious, purpose-driven.

Emma’s co-founders have a wealth of complementary experience. Bob is a sixth-generation farmer and founder of Agfarm, a leading independent broker, and creator of the first online grain broking and clearing house, Clear Grain. Ben is a fifth-generation farmer and spent 15 years as a trader, broker and pool manager in agriculture.

If there was a team who can crack the commodity platform market, we’re convinced it’s this one.

The Agridigital team officially closed their A$5.5m Series A in December, with Square Peg Capital and one of Australia’s foremost family offices.

We are seriously excited to be on this journey with Emma and the team.

A note on supporting the industry.

Industry-leading startups such as AgriDigital are a testament to the development of the AgTech sector in Australia overall. We believe that Australia has a natural competitive advantage: arable land, deep technical knowledge, community cohesion and a tried-and-tested export market. The growth in industry-specific support services such as SproutXAgfunder and Agthentic is a great indicator that we’re at the beginning of an exciting period for this sector!

Long may it flourish.