Superannuation. It’s not the most riveting topic. If you’re under 35 the idea of retiring probably isn’t on your radar, and that’s okay considering the day you walk away from work for the last time is at least 30-40 years away. But there’s a new Australian start-up trying to get younger Australians invested in their super. Spaceship, a new type of superannuation investment fund, is looking at more than investing in the Big 4 banks and mega mining conglomerates. And people like the idea, with 38,000 people signing up for the pre-launch. Better still, it’s not just the public that are excited, the future-focused start-up has caught the eye of VCs and Australian investors most start-up founders could only dream of having 5-minutes with to pitch to.
In April 2016 the idea for Spaceship was born. Just 3 months later CEO and co-founder Paul Bennetts raised enough capital from Atlassian co-founder Mike Dannon-Brookers, Show-po co-founder Jane Lu, Tyro co-founder Andrew Rothwell and some of the biggest names in Aussie tech, to turn the idea into reality. In January 2017, less than 9 months after the initial idea and to the delight of Paul and co-founder Kaushik Sen, Spaceship became a fully regulated super fund aimed at Australians with long-term investment horizons of 10 or more years.
We caught up with Paul to ask about the journey so far.
Why did you and the Spaceship co-founders start Spaceship?
Paul: We wanted to build a new kind of super fund for young Australians. A place where we can carefully nurture your financial capital for you so you can focus on what is important - focus on your human capital.
I started my professional career at Goldman Sachs before managing a $400m family office for several years. About three years ago, I moved into my ‘dream job’ as a Venture Partner for Airtree Ventures, a $250m VC fund. Naturally, I began looking more into my Super and making sure it was being managed well. What I found was pretty disappointing. In the words of Mike Cannon-Brookes, “Your Super is invested like you’re retiring in 5 years, but I’m not going to retire for another 30 years.” Super is lacking on two fronts: investment and engagement.
We live in a different world to our parents. Our parents were able to purchase a home for only three times their salary in the 80’s. For our generation, the typical Sydney house costs more than $1 million — this equates to a median multiple of 12.2 times what the middle-income household in the city earns in a year. We’ve inherited a financial system that resulted in the Global Financial Crisis and an Aussie housing market that’s so expensive most of us will never own a house. Super is now our most important asset, yet half of the population retiring in the next four decades are not saving enough to live comfortably.
Stepping back, what are we actually trying to achieve with Super and why did we need to launch Spaceship? Aren’t we simply trying to work thirty years to be able to retire at 65 years old and fund a thirty year retirement? Sounds simple enough. The sad fact is if you ask anyone around you, what dollar figure they need to have at sixty-five to retire and maintain their current standard of living, they have no idea!
Superannuation is a savings and an investment product. The existing funds should focus on both. Why isn’t your fund telling you how much you should be saving each year and give you the data to understand it? It’s clear that there is a significant lack of transparency and engagement in Superannuation. We’re hoping to change this. If you’re going to trust us with 9.5% of your salary, you should know exactly how it is invested, in which companies, and why we’re investing it that way. You should also know exactly how your Super is performing over time. We want to take our members on a journey and we’re going to work hard to bring the best assets to our portfolio.
Your team come from different backgrounds - how did you all end up working on Spaceship?
Paul: Look at any successful company and you’ll find they’re really just a great team of people working together to achieve a goal.
I think one of the most important factors to consider when building something great is building a great team from the start. We built our team based on this. Launching a Superannuation fund is not an easy feat, so we needed to bring together the brightest from different financial backgrounds to give us the best advantage. We all knew each other in our professional circles and networks, so it was just about connecting the dots.
What’s the biggest challenge you’ve faced as a start-up on your journey so far?
Paul: It’s no secret that Superannuation isn’t exciting, especially for young people. This has definitely proven to be an important challenge that we are facing. After chatting to thousands of members, we’ve found ourselves completely reassessing all of our assumptions about young Australians and Superannuation. It’s not necessarily because young Australian’s don’t want to be engaged with Super, but more so that Super funds are doing very little to engage young Australians. This is no easy task and it’s going to be an ongoing challenge for Spaceship and the Superannuation industry in general.
What’s the best achievement you’ve had so far?
Paul: We’ve had an overwhelming response during our beta launch, with over 38,000 members signing up to our pre-launch wait list. We’ve managed to grow to over $100m in funds under management FUM, before even launching to the public, simply by calling our customers one-on-one.
What’s one piece of advice you would give to other start-up founders?
Paul: Most founders lack one very important thing that makes a huge difference when tackling overwhelming complex problems. Thinking in the long-term and having clear milestones is the most valuable advice I can give. Without milestones and a clear vision, founders can’t communicate their vision to customers and investors or plan.
To help other founders we present at several events around the subject of pitching and offering other early-stage start-ups valuable insights and advice on raising capital. We even started our own fortnightly events (casual mentorship and networking evenings) to help other start-ups and chat about subjects such as raising capital.
If you’re interested in learning about more innovative Australian start-ups join us at CeBIT Australia 2017. Pitchfest will introduce you to some of the freshest ideas from Australians young and old. Get your tickets today.