Hi Peter,
Thanks for dropping by, and thanks for the questions.

Our 8am to 8pm call centre (we call them the Xinjerati) is located in our office in Sydney, and will continue to be so.

We currently offer 24 hour customer service, but we use a partners offsite team to offer an emergency service between 8pm and 8am. We really want to bring it all in house for 24 hours a day this year, but there are substantial costs involved both in money, burden on our team, and physical security....besides which we currently get very very few calls outside these hours. We are considering outsourcing the 8pm to 8am hours to somewhere in the world where it is daylight, but finding a provider to meet our exacting standards is not proving easy.

Any thoughts? Interested to know what people want from the call centres. Do you care where its located, or is the standard of service the overriding factor? Or is it something else? Drop me a note at help@xinja.com.au if you have some counsel.

Revolutionising customer service in a bank comes in two parts imo.

The first is culture and corporate DNA. Xinja is built with and for its customers. That means that some of the most important people in the business are the people that talk with and advocate for our customers. The Xinjerati and the social media team. Unlike some banks, customer service and dealing with customers is not a stepping stone to doing something else, it is not an annoying thing we have to do, its one of the most significant and important functions there is at Xinja.
This is reflected in the fact that the Xinjerati have a big presence at our team meetings, a weekly customer feedback email is sent to all staff, we regularly discuss specific customer issues and concerns with the whole team, and we feature specific customers, their lives, hopes and aspirations internally and externally every month at least. Plus all our staff must spend some time listening to customer calls on a regular basis. This means we are always thinking about our customers as people, not statistics and thats important for customer service and ethics.

The second is people. Without exceptional customer advocates in the Xinjerati roles, none of the above matters. We are truly lucky in that our Xinjerati are the best customer advocate team I have ever worked with.. They really genuinely want to revolutionise our industry, and a big part of that is the passion they hold for helping people. We are lucky to have them.

Thanks again!

E

Hi Salil,

Firstly please accept my most sincere apologies for taking so long to respond to you. I have been on the road raising capital, and missed the question....which is doubly bad as its a really good one!

I am a big fan of blockchain and crypto, even though we are obviously still at the start of the journey, or perhaps the end of the beginning. As a bank, we look at them as very seperate things in the way we consider them.

Blockchain is already in use in some areas of financial services as I am sure you are aware, and we will look at those commercially available options as we build the bank as and when we think they can help us. The key here of course is satisfying the regulator, and ensuring reliability of service. We do have our own blockchain project in the wings, but its not close to developed enough to share, and may still come to nothing, but we are hopeful.

Regarding crytpo's, we know there is huge demand for these from our customers, and we are working on ways to offer services and products in this space. Again we need to be very conscious of our regulator's requirements and keeping everyone safe.

So without going into to much detail at this stage, I think its safe to say we are very interested in this space, and subject to regulatory approval, would hope to be a part of it.

E

Hi Anon,

Thanks for the fun question :) Obviously Xinja wasn't a real word before we created it (at least I dont think it was!!), but we chose it because we wanted something short, snappy, with a bit of xing :-) plus it rhymed with 'your money ninja'!!!

E

G'Day Mike,

ING is as you say digital (for the main, although for some things you still have to print off forms, sign them, post them, get on the phone etc.) However it hasn't done a great deal to change the banking experience other than making it digital. So far, its mobile app doesn't do much more than any traditional bank. If people are only seeking a traditional bank delivered through a digital channel then ING fits that bill. However, if they are looking for something that is looking to help people track what they are spending, be more mindful about their money, integrate to provide a series of value added services that make it easier to manage their money and make more out of it, in an engaging, and mobile centric way, then they should consider a neobank like Xinja.

Cheers

E

Hi there,

This is not finalised yet and we are still working on finalising the experiences and help we can bring to our customers - various options are being considered and this is one of them, but no decisions have been made yet.

E

Our lending process is being built to be fully automated however it will always have on going manual checking to ensure it is running correctly and to deal with any exceptions.

Hi anon from the Webinar (!),
Obviously some of the products or some aspects of the products will be the same. You'll probably still want to pay anyone, set up direct debits etc. when you're talking about a bank account.

But we'll also be looking to redesign products themselves - from first principles (ie: not being confined to old constructs/definitions). However, it's the experience we're focusing on.

Even the 'digital' only banks currently still have non digital aspects (many still require physical signatures for some things for example). We're talking 100% digital (so you don't have to go into a branch for anything - there are no branches - and we will be paperless). More to the point, it will be easy, made for mobile (the existing banks weren't) with a focus on a great customer service. Importantly, we're building from scratch which means we won't have product silos. You won't have to open multiple bank accounts to ear mark money for specific things for example. And yes we'll ultimately be cheaper (yeh!) because we won't have expensive clunky legacy systems to maintain, and we will be lean - no branches and no cumbersome, siloed old businesses.

This cost saving can be passed on to customers in the form of lower or no fees or more competitive rates. Being 100% digital and data driven makes us highly scalable.

Looking at the neobanks in the UK like Monzo, they now have almost 1.5million customers - we'd be happy with that kind of scale.

Cheers

E

Hi mate,

No problems with more questions! Keep them coming, especially ones as interesting and topical as this.

This is a problem I and my exec team have chewed over many times in the past year....and for what its worth we reckon there are three parts to building an appropriate risk culture beyond what is required by regulation and legislation.

1. A fish rots from the head down:
If the execs in a business are ethically challenged, it doesn't matter how much culture, risk and compliance mechanics are in place. Its essential that execs lead by example, that they insist that decisions are made in a customers best interest, that they are seen to say no when a product doesn't suit, and that they visibly counter the profit at all cost mindset. That doesn't mean the customer is always right, it doesn't mean the bank cant protect itself and its shareholders, but it sure as hell also doesn't mean that you can step all over your customers just to make a buck.

2. Distance from customer leads to depersonalisation.
When you have team members and execs that dont talk to customers (and no I dont mean a once a quarter sales call to flog them something), or hear about the problems a customer has to deal with, those team members stop thinking about the fact they are making decisions that impact real people, cause real joy or pain, and can alter lives for good or bad. If the customer is just a statistic, moral ambiguity can start to creep in....we try and counter that by making sure our Xinjerati who answer the phone get a loud voice at business huddles, that people know what are customers are happy and sad about, and what people are saying on social media. Of course we also have customers into the office regularly to talk to our teams, test products etc....all aimed at making sure as a banker you know who you are here to help. If we can build this closeness to customers into the DNA of Xinja I think we will have made a good start of building an appropriate culture that will last beyond my tenure.

3. Be clear constantly and punish offenders:
If you dont constantly articulate what you believe in (see our 10 golden rules in another post below), and you dont enforce that, you are effectively condoning bad behaviour. My poor team get sick of me banging on about the Golden Rules, and "Dont break rule 1" is a common refrain between staff at Xinja. Whilst we haven't had to enforce the golden rules or our Code of Conduct at Xinja yet, and my team are all here because of their ethics and urge to revolutionise banking, they know that if anyone crosses that line they will be gone before the end of the day, and if appropriate referred to police. There is no room at Xinja for unethical behaviour, and no one has any doubt about the consequences. We expect everyone here to protect our ethical standards and my team are encouraged and rewarded to speak up if they see something that doesn't belong here.

Is this the right answer? I dont know. The banks clearly havent got it right. Even the Royal Commission is essentially silent on the how. What we can do however is stick to our ethics and never ever breech Rule 4.

Thanks for the interesting question. I hope you didn't lose the will to live in reading my long answer!

All the best

E

Hi Mark,

Thanks so much for thinking about taking the plunge with us! As always please think carefully and dont invest money you cant afford to lose, and in return we will do our absolute best to build a bank you can be proud of.

Lets get into the SAP Partnership...

Xinja works with SAP on a very contained part of our infrastructure, namely our core banking and payments platform. We were the global first implementation of their new S4B product, and to be transparent the experience has been nothing like working with the SAP of 10 years ago. We have been blown away by the quality of resource, pricing and absolute dedication to delivering within their stated time lines...and no I am not being paid to say this!!!! :)

SAP do not have equity in Xinja.

Regarding penalty frameworks, I cant go into the details of the contract as they are commercial in confidence, what I can say is that we were assisted and protected in our negotiations by leading law firm Gilbert and Tobin who have worked on a number of these deals, and SAP have very much acted as a partner during these negotiations...we are well down the line now and they continue to be a strong important part of our business.

As for convincing you...I totally get it...I actually laughed out loud when our techies brought me the results of the market scan and tech reviews with SAP at the top. However once they had walked me through the actual data, and the fit against a bunch of criteria, I was kind of forced to consider it. Once we met the SAP team, saw the global first product they were offering us, the fact it would act as a brilliant backbone to all the awesome tech we are introducing, and the conditions under which they were prepared to work with us, I had to consider the very real possibility we would use them. I have seen SAP go horribly wrong in the past, as we all have, so we started from the position that we had to be sure this wasn't that! SAP made us a number of carefully considered promises, and took the risk on them being able to deliver it. All credit to them they then implemented our core banking platform MVP in 12 weeks! They delivered on budget and one day ahead of schedule. So, so far so good. We have had a really great experience with them, and they continue to deliver in a very high quality fashion and understand our constraints as a start up.

Hope that helps

E

Yes! Absolutely! Yes!

Hi Phillip,

At this point we do not have an "ethical charter", but as I mentioned in an answers to Julia below we do have a policy about not working with companies that we consider to be unethical.

The closest we have are our 10 golden rules, which set the ethical and behavioural expectations I have for everyone working at Xinja. They are however very much internal guidelines around diversity, ethics when dealing with customers, pay, pride in making money in an ethical fashion etc. I have enclosed them below if you are interested. These golden rules guide all our decision making, are on every job description and discussed with all new staff, but as I say they are focused on our people rather than business we might work with.

The idea of a specific "ethical charter" setting out the bank's operations at a wider level is a really interesting one, with your permission I will stick that in the back of my brain for a later date!

E

XINJA'S TEN GOLDEN RULES

1. No dickheads... however good they may be. No dress code. No power trips because of a hierarchy. Intellect, customer experience and implementation is all that matters.


2. Everything is in the cloud.

3. We use real time data to evaluate our business and we reward staff on a quarterly basis with an entirely discretionary profit share. No one gets a share of the profit if our investors aren't making money and our customers aren't happy.


4. We are here to make money, that's why we exist, and we don’t screw people over to do it. We don’t lie to our clients in person or in marketing. We don’t engage in immoral lending, if our grandmother would think it was wrong, then it is. We aim to make lots of money ethically and we are proud of it.


5. No one is entitled to work at Xinja. It a huge honour to represent people’s hopes of a new bank and we earn that honour every day.

6. We look after our people bloody well. We stand by them if they are in genuine need.


7. We are truthful and direct with each other. Everyone says what they think in a robust, challenging, edgy environment. That means we won’t be the right place for everyone to work, and that's ok.

8. We only hire people better than us. We never, ever settle because we need a body. We do psychometric testing to get the best people, every time.

9. About half our team, executive and board will be female, if they aren’t we aren’t recruiting the best people.
 We actively seek all types of diversity combined with brilliance.

10. If you discriminate against someone because of who they love/sleep with, you're a dickhead…please see rule 1.

Hi there!

Quite a few questions there! Let me pick them apart for you.

1. Xinja will underwrite credit risk via a combination of an automated credit engine and a specific credit underwriting team aligned to our risk appetite.
AI and Machine learning sit within the Technical Architects at the moment, but as you would expect that will transition to a specific data and AI team.
2. Re the shiny customer front end experience, the members of the executive team you have mentioned above span a number of functional areas...for example Michele is our Chief Risk Officer. Van Le however is our Chief Strategy, Innovation and Design Officer. She owns the customer experience ultimately, but that of course is dependent on a number of areas such as Technology, Customer Service, Product etc etc.
3. Alistair Thomas our CTO runs the technology front end within the Technology Council.

All the best

E

Hi Andrew,

Thats a very reasonable question. It is my understanding however that we are prevented from providing long term financial forecasts for equity crowd funding beyond 2 years, and have to stick to what is provided in the information paper.

To be honest its bloody annoying, because we of course have all the modelling however the argument, which is reasonable, is that long term forecasts by their nature have a high degree of inaccuracy and there is a substantial possibility of them not materialising...therefore they stand a high risk of being inaccurate and misleading.

So I am afraid all I can offer you is the information in the documents here. :(

Cheers

E

Hi Julius,

I think the response below answers your question to some degree. The next stage in the licensing process is important, but I dont think Xinja can complain about the amount of free press we get!!! We are extraordinarily fortunate to receive a great deal of interest and opportunity from the mainstream media, and we appreciate their willingness to give us a voice!

E

Hi Milan,

How bloody good is this! We are absolutely stoked to see Volt move onto the next stage of their license with the unrestricted ADI! Its well deserved and we wish them all the very best of luck with their version of a neo bank.

Just a little correction though, both Xinja and Volt are already officially banks! We even have the statutory instruments to prove it! :)

We think we are very different to Volt, both are valid models no doubt, but Xinja is built around our customers and our customer community. We are both for purpose and for profit. We demonstrate this in a number of ways...one of which is by allowing our customers to own us via this very crowdfunding! We released a beta product last year to let people get a feel for us and for us to learn what they need and want. We already have customers, revenue and tens of thousands of people signed up. We focus on helping our customers get the most out of their money and get out of debt as fast as possible....and we use some seriously cutting edge technology to do that.

Its also worth remembering that Volt are not the competition for us, and we are not for them...the existing banks are....and we wish Steve and the team over in North Sydney all the very best as they, like us, try to bring some competition to Australia.

Cheers

E

Hi Brian,

Its such an interesting area of development. The merging of banking and payments spaces is accelerating and becoming less and less defined outside of Australia. You would have to think looking at the way this effect is rippling around the world that Australia is going to see this convergence as well. Happily these types of technological shifts are usually very positive for neo banks as they have highly flexible, low cost, technologies allowing them to adapt and profit (or at least not suffer) in these fast moving process areas. My bet is that you are absolutely right and many neobanks will have to adapt to cope with WeChat commerical models. A refusal to move with the times, usually means irrelevance, at least in a competitive market...and this is one area that is going to continue to develop rapidly. What is going to be interesting is to see if it spreads to the lending products, which is where banks make money.

E

Hi Julia,

Thanks so much for your kind words, being a customer and thinking about an investment. Your praise makes a huge difference to me and the team here, it makes us even more hungry to do this right!

Xinja has a policy that we will not finance companies that we consider to be unethical. Your example of the weapons industry for example would fall into that category. It is worth pointing out at this point however that Xinja does not conduct business banking so we dont lend to businesses or finance an industry, so we dont have an externally available policy...we focus exclusively on retail customers, and expect to do so for a while yet. However when/if we do start lending to businesses we will be doing our utmost to behave in an ethical fashion.

Sometimes we have to "store" money somewhere, for example funds that investors have given us, and in the future, deposits customers have given us. These will never be placed directly in organisations we judge to be unethical, and where possible we will do everything reasonably possible to ensure the organisations we place these monies with, do not then in turn, finance unethical businesses.

I hope that helps!

Thanks again

E

Hi Salil,

What an excellent question! We spent a lot of time considering this exact thing when we started Xinja....how do we avoid the difficulties other neobanks around the world have faced and make our pathway smoother.

Its funny you mention the massively successful Monzo, as you may know we have one of the co-founders of Monzo as an advisor to our Board, Mr Jason Bates.

Jason is an old mate of mine (we started our first job out of uni together) and he has been very helpful over the past couple of years working with me and the team to advance Xinja. The big lesson we learnt from Monzo is that building a great neo bank requires a community behind it, lots and lots of transparency, and an unrelenting drive to genuinely revolutionise the way banking is done, not just build an old bank that is delivered digitally. Monzo as you know, after 4 years is worth over US$1billion now, has over a million customers, and is now expanding into the US.

As well as Jason we also have the world famous Brett King as a permanent advisor to our Board. Brett is basically the grandfather of neo banking, he has written a ton of best selling books on the future of banking, advised the Obama White House on banking, been quoted by Xi JinPing, President of the Peoples Republic of China, and he founded the first neo bank in the US, Moven.

TLDR: We have made sure we have a lot of international neobank experience at the Board level to help us avoid pitfalls and use proven strategies.

For your second question...you are right, everyone knows you have to be competitive price wise to win homeloans...and we will be. Our beta test in October was priced at 3.64% for a P&I fully offset loan. However all the research and experience shows that it is absolutely not the only factor. Speed of processing and decision making, amount of recurring fees, the ability to have your homeloan and other banking seemlessly connected, and the levels of customer service provided when you need help are also significant influencing decisions. Again though these are all existing bank commercial models. We can and will compete in this arena, but being a true neo bank, with an ADI, and modern technologies allows us to offer a whole range of other capabilities aimed at helping our customer get out of debt faster, and make the most of the money they have.

All the best

E

Hi Philip,

Open banking is an essential and critical step forward for Australia and its financial services industry. Neo-banks are designed to operate best in an open banking environment. Whilst it is disappointing that the role out of open banking has been delayed, it has come as a surprise to absolutely no one in the fin tech industry considering the speed at which our industry adapts to change. To be honest, its not going to effect Xinja massively at this point, beyond shuffling some development horizons around and dedicating some resource to advocacy to try and ensure than neo banks and fintechs generally are not shut out of the pilot process and handicapped by old legacy technologies becoming standard.

E

Hi Dave,

Thanks for the thoughtful question.

It’s important to consider here that UP is not a neo bank but a front end digital distribution strategy for Bendigo Bank. It is my understanding that it does not own its own ADI and offers rebranded Bendigo products. You should of course do your own investigations to confirm that. It’s a smart move by Bendigo to attract customers and to improve their customer service. Bendigo is a good bank and the people I have met there are pretty decent, but it’s not a neo bank as such, and we consider UP as part of Bendigo and treat them competitively in that way. In our minds it is much the same as UBank being owned by NAB.

Your question highlights excellently what I believe is a common misconception about neo banks in that they are all about the technology, and digitising the existing banking model. Neo banks are of course about technology, Apple Pay, AI etc etc, but that is not what defines them. What defines a neo bank is a fundamental challenge to the existing banking players and banking model., they reinvent how banking is done, how it provides services and customer experiences. A neo bank doesn’t just make it possible to interact with an existing bank in a new way. Xinja isn’t just about offering banking products through your phone, It’s about revolutionising banking to help customers make more out of their money, and if they have to be in debt, to get out of debt faster.

We wish Bendigo all the very best with Up, as I said Bendigo are one of the better banks, but we think customers are looking for a new type of bank, with a fundamentally disruptive model. Time will tell who is right!

E

Hello again Ross,

We know Monzo in the UK well, and are lucky to have one of their co-founders as a Board Advisor.

I hope you will forgive me, but its not appropriate for me to discuss security measures and solutions on a public forum such as this. Fraudsters are exceptionally clever, and we try to give them as little assistance as possible!

That said we take security very seriously indeed. Monzo is about 3-4 years ahead of us in their development cycle and there is much we can learn from them. Their fraud systems have to date been very successful indeed, and absolutely represent a possible pathway for us.

Coincidentally we are starting the hunt for our new Chief Information Security Officer this week to head the team already in place and expanding....so if you know anyone!

E

Hi Ross,

Thank you for making an investment in Xinja. I and my team will do our utmost to build you a bank you can be proud of. Thank you as well for your kind words, you may not see it but it means a lot to us, and encourages us no end.

Re security and fraudulent behavior. There are multiple layers of defence in our business model and technical architectures which encompass both Xinja looked after efforts as well as third party efforts. Without going into too much detail for obvious reasons the level of defence reflects the level of threat. The threat around a bank account is greater than a fixed amount prepaid card for example. I would also point out that our regulator APRA also pays extensive attention to the cyber security and fraud processes that RADI's and ADI have.

It terms of our waiting list we have 23,000 people signed up to it.

Hope that helps, and thank you again.

E

Hi Andrew,

Firstly, thank you so much for being a founding investor in Xinja. I and the team very much appreciate your support, and the progress we have made so far wouldn't have been possible without you.

Your question around valuation is a good one, and as you are aware the valuation of a start up company like Xinja is part science, part art. In order to reach a valuation we went through a long process to try and make a good estimate, balance a number of factors, and make sure the company got the capital it requires whilst also giving investors plenty of potential upside.

Its also worth noting that this share price is not just for the Crowd Funding, it is also the price being used for the remainder of the Series C raise ($15m) with larger professional and institutional investors. What this means is the valuation has been tested many times by potential investors. That said you must, of course, conduct your own independent assessment of the valuation or seek professional assistance to do so. Also I think worth pointing out, in case people dont understand, none of the money raised in this ECF is being given to other shareholders, it is all going straight into the development of Xinja.

Below I have tried to set out the factors we used to develop the valuation, I hope its helpful in forming your own judgement on valuation. Please feel free to come back with further questions if I miss something you are concerned about.

So how did we reach this valuation?

We started by looking at the UK and European neobanks overseas and what they were valued at when they were at a similar stage of development, we made some subjective estimates of how similar our business models were and scaled down for population size.

We then compared ourselves to Australia's only other neobank and their valuations, and tried to assess ourselves fairly against them.

We also looked at the size of the market opportunity here and the environmental factors such as the regulatory environment for new players and how very hard it is to get a banking license. The RADI banking license we now hold, has some degree of inherent value to it.

Finally, since our last crowd fund, the risk in investing in Xinja has decreased as we have proven our ability to acquire material numbers of customers, develop and implement a number of important technology systems and attract world class partners. We have designed, built, run, and maintained two financial products, have generated small amounts of revenue acting as a proof of concept, have sucessfully implemented our core banking platform MVP, built the Xinja front end app, and developed one of the most advanced banking micro-services data layers out there.
Plus of course we are now a bank with a Restricted banking license. I hope it goes without saying but these RADI's are exceptionally difficult to acquire, as they it should be. Being granted RADI status by APRA is a significant milestone on our journey.
We believe all that translates into an appropriate uplift on the previous valuation. Remember a year ago at the last valuation we had few customers, no RADI, and no significant banking systems in place.

All that said at the end of the day, as a potential investor, you must draw your own conclusions based on your own assessments. I would strongly encourage you to look overseas at businesses like Monzo, Atom, Revolut, and N27 to see what a potential path for Xinja might be, and then decide if the team here is capable of delivering such an outcome. Study the offer document, seek advice and draw your own conclusions.

Whatever your decision on investing again, thank you so much for taking the time to consider backing us. We really appreciate your support and kindness.

E

PS...I also note you work for National Australia Bank :)

Hi Joshua,
Thank you for the question, as it is essentially the same as the one above by Andrew McGregor, with your permission I will answer it there.

I would say however that if in your opinion Xinja is over valued, you absolutely should not invest.

Whilst I will explain our reasoning behind the valuation of Xinja above, each person must make their own assessment based on what they feel is important, what the opportunities are, and their understanding of the market. If you continue to have the same opinion, please please do not invest.

You being happy with a decision to become an owner of Xinja, and being happy with the price you have paid, is far more important to me than any investment you might make.

All the best

E

Hi Ryan,

Thanks for the kind words, really appreciate your support.

Ok, lets get into your questions!

Whats the longer term product road map? - First up, this year is all about retail bank accounts, deposit accounts and home loans. This is the bread and butter of a retail bank, and we need to get them up and running, regulatory approval, and customers absolutely loving the experience. We are pretty certain that will fill most of 2019. Beyond that, as you mention things can change, but my thinking at this point is that 2019/2020 will see us developing unsecured lending, car loans, and an alternative to a credit card...ie it does the same thing, smoothing out a customer's cash flow, but is more ethical and doesn't encourage customers to get deep into debt. We will also start looking at developing our platform model which I hope will give our customers access to a wide range of financial products that we have "curated" but dont actually deliver ourselves....perhaps a couple of insurance providers, perhaps a couple of the new fantastic digital superannuation providers, or possibly access to some decent ETF's or robo advice. Obviously none of this is set in stone, and would all be subject to regulatory approval, so please use it as interesting possibilities, but dont rely on it for your investment decision.

Mortgage Brokers? Yes, absolutely we will seek to engage the broker community. We will of course have a direct to consumer pathway, but without doubt brokers will be an important part of our distribution strategy.

In my opinion a good mortgage broker is an essential tool for a customer seeking to make what is often the most significant debt decision of their lives. More than 50% of mortgages in Australia are, I believe, done through a mortgage broker. Our value proposition for brokers is not yet finalised, plus of course we have to wait to see if Justice Hayne has anything to say about brokerage commercial models before finalising it. What I can say is that we will treat the development of the broker proposition exactly the same as we do with building a customer proposition. We seek to have a number of brokers work alongside us as we build it, guiding us, telling us what works and what doesn't, and make sure we deliver something innovative, responsive and that meets both the broker's needs and of course the needs of customers. We have already had a number of very kind brokers reach out to work with us, and will be able to be a bit more transparent later in the year.

Thanks for the insightful questions.

E

Hi Nathaniel,

Thanks for the questions, they are important ones.

Firstly I think its important to call out that shares in early stage businesses like Xinja are illiquid by nature, you should be thinking of any investment in Xinja as having a medium term horizon. Dont invest in us if you cant afford to have the money tied up for at least a couple of years.

As to selling or buying shares, there is nothing preventing you conducting a private sale or purchase of shares with someone you find and agree terms with at any point. However you do have to find the person, agree terms, inform the share registry etc.

We would love to be able to establish a secondary market to help shareholders trade with each other, but its a complicated area from a regulatory perspective as we need to be careful not to become an "exchange". We will continue to look into it, but dont base your investment decision on us being able to provide a secondary market.

If anyone reading this knows of an organisation that specialises in providing secondary markets for businesses do drop me an email!

As for listing on a stock exchange, we might consider an IPO in a couple of years as its a strong way to raise capital, and of course there are other potential liquidity events such as trade sales. To be clear however there are no immediate plans for either of these.

E

Oops! Thank you! Thank you as well for deciding to invest in Xinja, we know putting your cold, hard cash at risk is a big decision.
E

Hi Wyatt,
Good question! I will give you my views on the Australian neo-bank market, but obviously I am somewhat conflicted! Please make sure you do your own research and draw your own conclusions.

Firstly we believe that other neo-banks are not the competition. The experiences in the UK and Europe show that neo banks dont seem to take customers off each other, but take them off the incumbent legacy banks. They also show that once there is a critical mass of neo banks in the market, the customer acquisition for all of them seems to rise, I suspect due to customers feeling comfortable with the new market segment.

I think the second key point here is that there is in fact currently only one other neo-bank in the Australian market and that is Volt. The other brands I am aware of that are being spoken about are simply digital distribution strategies for existing ADI's (banks). What you are getting is a shiny new front end on top of the same legacy ADI. Will customers care?...we think they will.

How do Xinja and Volt differ? The honest answer is that I dont know. Volt have yet to release any products or have any customers, so its impossible for me to tell. Once they open for business i am sure we will all get a good look!

Appreciate the interesting question!

E

Hello again Philip!
With your permission, to protect people's privacy I wont give out exact numbers tied to Directors beyond what has already been disclosed publicly, but I can perhaps give you some general statements about their shareholdings that should, I hope, answer your question a different way.
Regarding the Non Executive Directors that sit on the Board (ie not Van and I who are Executive Directors), none of them with one exception, have what I would consider to be significant share holdings, they aren't in the Top 20 largest shareholders for example.
One NED on the Board however was one of the very first investors in Xinja, and has continued to invest in Xinja throughout our development. As a result that NED is one of the Top 20 largest shareholders.
As far as Executive Directors, thats Van and I, like all the team that helped me start Xinja way back, we hold our shares in a unit trust. That unit trust holding the starting team's shares, is at this point still the largest single shareholder in Xinja.
I hope that helps!
E

Hi there, sorry its taken me 48 hours to come back to your question. It pretty busy here as you can imagine!
I will try and answer your question as plainly as I can, however this stuff is commercially very sensitive... so I will do my best and hopefully still meet the needs of your question. The home loans trialed were priced at 3.64% for an owner occupied, variable, full offset, Principle and Interest loan. That was the interest rate charged in October 2018 when we conducted the test, and the margin achieved was as we expected. The number of home loans done was very small, as you would also expect from a test run, and all were less than A$1m in value.
In terms of the funding rate used for the model relative to the Big 4, we have used a more expensive funding rate as you would expect. The Big 4 have a significant commercial advantage over us in that they can access wholesale funding more cheaply. We believe however we can balance the scales by having a lower cost of operations and higher customer service levels.
I hope that helps! Thanks again for your interest in us.
E

Hi Philip,
Thanks for the question. Obviously its important that we respect the privacy of individuals, so I cant give out names beyond whats already public, but perhaps if its helpful I can give you a feel for the types of people that are in there, and those that aren't? The top 20 shareholders hold a substantial majority of the shares in Xinja, more than 85%, and they are at this stage almost exclusively private individuals investing their own money. Some of them of course have invested through other vehicles such as family trusts etc, but behind that it is an individual person or family. The majority of these people are business people who have done well and want to invest in what they see as a potential game changing company. (You should of course make your own informed decision!) These investors come from all over Australia and the Asian region. An exception to that is one of our major technical partners who has a material investment in us, which for obvious reasons is a good thing!
What we do not have on our shareholder list is any Australian Legacy Banks AT ALL.
Xinja is entirely independent of the existing Australian Banking industry, and I will be doing my absolute best to ensure it stays that way. We might consider an investment from an overseas bank that had no presence in Australia, as that type of partner could be very useful, but for what I think are obvious reasons we wont be accepting any investment from the Australian Legacy Banks.
Over the next few months we will probably seek to expand our investor base into some of the more institutional investors around the region, but again to be very clear, that will not include investors that compromise our independence in the Australian market.
Hope that helps, and dont hesitate to come back with a follow up question if I missed anything you want to know.
E

Hi Jono,
Firstly, thanks for your question and interest mate, much appreciated. The money raised will be invested across our technology architecture including back end banking platform, micro-services data layer, and front end app. It will also be used for data and IT security. If its helpful, this crowdfunding is part of a larger A$20m Series C raise which will fund the development and scaling of the bank as a whole and cover IT costs as well as marketing, product development, staff, risk and ADI license application.
Cheers
E

Hi David! We define someone as a customer as soon as they have registered in full for a card (supplied all their details) and been sent a card. As per the offer document, we currently have 9,031 'customers' therefore. We only launched Android in mid December and we would expect a portion of the remaining base to register over time as was our experience with iOS, plus there is a % of sign ups who are waiting for the bank account (don't want a prepaid card).
Customers use the platform/card for general daily spend, international spend (we refund 100% of currency conversion fees), as a travel card and to split bills or ask people for payments.
We have only had a handful of people cancel their account - the reason given most commonly is the lack of apple pay (given we've only just launched Android, iOS customers still dominate over time) which is something we're planning to launch with with the bank account.