AN­THONY MILLET

Fancy OWN­ING a piece of prime REAL ES­TATE for less than a hun­dred bucks? Meet the man be­hind the dis­rup­tive start-up that’s help­ing Aussies EN­TER the prop­erty MAR­KET, one brick at a time.

Collective Hub - - CONTENTS - WORDS SELISE MCLAGGAN

the founder of brickx is chang­ing the real es­tate game for less than a hun­dred bucks

Prop­erty is prob­a­bly more im­por­tant to Aus­tralians than their re­li­gion.” So says An­thony Millet, CEO of the fin-tech firm BrickX. And he’s not just be­ing con­tro­ver­sial – he’s done his home­work. But first, a lit­tle back­ground. At eight years old, UK-born An­thony started work­ing in his fam­ily’s sports sup­ply store in Lon­don. “I’d say that was the foun­da­tion of my en­tre­pre­neur­ial spirit and mo­ti­va­tion,” he smiles. Af­ter univer­sity and four years as an in­vest­ment banker, with a fo­cus on the tech­nol­ogy sec­tor, An­thony sur­prised ev­ery­one by re­join­ing the fam­ily busi­ness, Ac­tivin­stinct, and set­ting up its on­line pres­ence to com­ple­ment the high street store. It was a case of the prodi­gal son re­turn­ing. The next five years saw the busi­ness emerge as a huge global on­line sports re­tailer, in­creas­ing an­nual turnovers of AU$1 mil­lion to more than AU$70 mil­lion, and ex­pand­ing into eight coun­tries be­fore sell­ing at the end of 2013 to UK re­tailer JD Sports.

Af­ter a year of trav­el­ling, men­tor­ing and in­vest­ing in start-ups, An­thony planned to take it easy, and “maybe do the VC thing” when he ar­rived in Aus­tralia in 2015. Turns out, An­thony isn’t the type to sit still. “I had ants in my pants,” he laughs. “I’m too am­bi­tious and too en­tre­pre­neur­ial to just sit back and in­vest in other peo­ple’s busi­nesses. I re­ally wanted to grow some­thing, and grow some­thing of value.”

So he plunged into a fu­ri­ous and thor­ough in­ves­ti­ga­tion. “In the first three months I had over 90 meet­ings with busi­nesses, in­vestors and in­dus­try pro­fes­sion­als, [to] re­ally try and un­der­stand the Aus­tralian start-up scene, the Aus­tralian busi­ness scene, [and] what Aus­tralians cared about.”

Which brings us back to prop­erty. While much has been made about Aus­tralia’s hous­ing af­ford­abil­ity crisis, An­thony says the re­al­ity is “a lot of the world has an af­ford­abil­ity crisis when it comes to prop­erty”.

“But, in Aus­tralia, there are a few facts that are quite star­tling. Six­ty­five per cent of this na­tion’s wealth is in res­i­den­tial prop­erty. And that mar­ket is worth AU$6.2 tril­lion dol­lars. That’s three and a half times the value of the ASX [Aus­tralian Se­cu­ri­ties Ex­change]. When you see how much of this na­tion’s wealth is in res­i­den­tial prop­erty, you start to think, ‘Okay, there’s an af­ford­abil­ity is­sue but, ac­tu­ally, it’s not re­ally in this na­tion’s in­ter­ests for prop­erty to be­come more af­ford­able, be­cause 65 per cent of this na­tion’s wealth is go­ing to be go­ing back­wards.’”

En­ter BrickX. An­thony had been talk­ing to Tank Stream Labs ven­ture part­ner Markus Kahlbet­zer, an in­vestor in Amaysim and Air­tasker and co-founder

I’m too AM­BI­TIOUS and too EN­TRE­PRE­NEUR­IAL to just sit back and IN­VEST in other peo­ple’s BUSI­NESSES.

of BrickX, for about a year be­fore de­cid­ing he wanted to do some­thing rad­i­cally dif­fer­ent in the prop­erty fi­nance sec­tor, like Markus.

“BrickX fit per­fectly into that area I was look­ing for,” says An­thony. So he joined as CEO in April 2016.

“[BrickX] was born out of the fact that of all the res­i­den­tial prop­erty that ex­ists, there are no fi­nan­cial prod­ucts that al­low you to in­vest. It was a case of find­ing how can we es­sen­tially make prop­erty in­vestable in the same way that you in­vest in com­pa­nies on the stock ex­change,” says An­thony. >

Here’s how it works: BrickX buys a prop­erty, which sits in a trust. That trust is then split into 10,000 shares, called ‘bricks’. If a prop­erty is bought for AU$960,000, for ex­am­ple, the price for each brick is about AU$96, with in­vestors allowed to buy up to 5 per cent of any in­di­vid­ual prop­erty. BrickX, which takes a 1.75 per cent com­mis­sion on each brick, is re­spon­si­ble for find­ing ten­ants. In­vestors get a monthly re­turn based on the num­ber of bricks they hold.

“We’re never go­ing to re­place the need for some­one to own their own home and we never want to. But there is so much de­sire to in­vest in prop­erty be­yond own­ing your own home.”

BrickX in­vestors vote to dis/con­tinue the in­vest­ments every five years, and can sell at any time if 50 per cent agree, while in­di­vid­u­als can sell their bricks to oth­ers on­line at any point in time.

Find­ing the BrickX so­lu­tion took AU$3.5 mil­lion in in­vest­ment and two and a half years from con­cept to launch, a year and a half of which was spent work­ing with ASIC to come up with the right struc­ture. “Aus­tralia is one of the most reg­u­lated fi­nan­cial en­vi­ron­ments glob­ally, with ASIC hav­ing a core fo­cus on in­vestor pro­tec­tion and suit­abil­ity,” ex­plains An­thony. “We pre­sented our idea at a time when ASIC were start­ing to make great noises around sup­port­ing fin-techs and new ini­tia­tives, and worked closely with the reg­u­la­tor to find cre­ative and in­no­va­tive so­lu­tions which ac­com­mo­dated the BrickX busi­ness model.”

He cites in­vestors be­ing able to sell their ‘bricks’ on a dig­i­tal plat­form as one of the most sig­nif­i­cant break­throughs they made with ASIC. He ad­mits that the process was gru­elling (“liv­ing that day to day is pretty hellish”) and, if the prod­uct didn’t pass ASIC ap­proval, well, there was no busi­ness at all. An­thony says “keep­ing team morale high” was a bat­tle dur­ing these reg­u­la­tory challenges. “For two years we were build­ing this prod­uct, but we weren’t able to mar­ket it or put it out there.”

Af­ter op­er­at­ing in beta mode since 2015 – but only for high-net-worth in­di­vid­u­als and so­phis­ti­cated in­vestors due to fi­nan­cial reg­u­la­tions – even­tu­ally they got the green light for a re­tail li­cence. Af­ter celebrating the first cus­tomer “that wasn’t a friend or a fam­ily mem­ber”, the com­pany started to hit its stride. Six months af­ter launch­ing in late 2016, BrickX has close to 3000 in­vestors who have in­vested well over AU$5 mil­lion. More than 50 per cent of their cus­tomers are Mil­len­ni­als and over 70 per cent of them have never in­vested in or owned prop­erty be­fore.

Given their client base, An­thony is aware of BrickX’s re­spon­si­bil­ity. “We have a huge role in terms of ed­u­ca­tion, ex­plain­ing how prop­erty in­vest­ment works, but also in gen­eral

We’re NEVER go­ing to RE­PLACE the need for some­one to OWN their own HOME and we never WANT to.

fi­nan­cial lit­er­acy and trans­parency. Let’s be ground­break­ingly trans­par­ent so that peo­ple trust us and un­der­stand us and know what they’re get­ting into.

“We’re in an en­vi­ron­ment where a lot of peo­ple have been burnt by prop­erty spruik­ers. We have no com­pe­ti­tion, which is pretty crit­i­cal and vi­tal, but then we’re of­ten com­pared to off-the-plan de­vel­op­ments and all these kind of high-risk projects.” BrickX com­bat this by educating cus­tomers through blogs, email cam­paigns, and their site, which An­thony says is writ­ten in “plain English”.

“There’s no doubt our prod­uct is cool,” says An­thony. “It’s in­no­va­tive, it’s dif­fer­ent, it’s dis­rup­tive. But it’s not just all of those things. It’s ac­tu­ally pro­vid­ing a real ben­e­fit to in­vestors and ac­tu­ally solv­ing a prob­lem that ex­ists.”

While the com­pany has struck that bal­ance now, An­thony ad­mits it was some­thing they didn’t get right straight away. “Early on, [we] were fo­cus­ing too much on build­ing a re­ally cool prod­uct and not fo­cus­ing enough on why peo­ple would want to use it. We’re now get­ting much bet­ter at try­ing to re­late the use of our prod­uct to peo­ple’s in­di­vid­ual needs. For that first home saver it’s like, ‘Look, now you can ac­tu­ally get a foot in the door and save your de­posit in line with the mar­ket’, whereas pre­vi­ously we’d have just said, ‘Hey, now you can in­vest in prop­erty.’”

Fo­cus­ing on mak­ing the prod­uct “con­sumer-cen­tric” is now deeply in­grained through­out the en­tire busi­ness. “When we make de­ci­sions it’s, ‘How is this go­ing to ben­e­fit the cus­tomer and how can we show the cus­tomer that this de­ci­sion is ben­e­fit­ing them?’”

It’s an approach An­thony rec­om­mends for all start-ups. “Make sure what you’re try­ing to do is not just cool, but ac­tu­ally solves a par­tic­u­lar is­sue. It’s all well and good build­ing cool prod­ucts but if you can’t work out why some­one’s go­ing to use it or how it’s go­ing to make their life bet­ter, you’re go­ing to come across those hur­dles and you’re not go­ing to get over them.

“Fo­cus on what you’re try­ing to solve and make sure it’s a real thing. And if it’s a real thing, then every bar­rier that gets in the way, just smash through it and keep go­ing.”

WHEN we make DE­CI­SIONS it’s, ‘HOW is this go­ing to BEN­E­FIT the cus­tomer and HOW can we SHOW the cus­tomer that this de­ci­sion is BEN­E­FIT­ING them?’

An­thony Millet

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.