The air is thin on the highest of high ground, leading to compromises in the name of survival.
And so it is with Maslow, the most idealistic fintech start-up yet to strut its stuff in Australia’s financial services landscape.
Maslow, if it ever begins trading, will adopt a subscription model for the reselling of select retail financial services “at cost” and even a zero margin.
Monthly fees will be in a range from $5 a month to $50 a month, “depending on the value and/or savings the platform provides them” Maslow’s founders outlined in an offer document yesterday.
Via the Birchal crowd-sourced funding platform, Maslow is seeking to raise $1.15 million at a pre-valuation of $11.5 million.
Maslow has received a strategic investment from the founder of one of Australia’s largest financial comparison websites “because of the potential change he believes Maslow could bring to the sector.
“Potential partnerships with his business have been identified for future consideration with this investor.”
There are heavy qualifications around the Maslow investment proposition.
Maslow is not only a pre-revenue fintech, it is pre-product and pre-build and one conceived, so far, on high convictions that this really is one start-up that will change the world.
“Maslow plans to build and launch a digital membership platform that offers subscribers access to financial products and services delivered to them at cost price” the founders explain at the outset of their foreword to the offer, which launched yesterday.
The $1.15 million would not, you would think, pay for all that much of this build, or even last the 12 to 18 months projected in the offer document. So many further Maslow share issues (some potentially dilutive) may lie ahead.
At the conclusion of its “platform development”, Maslow plans to offer personal banking and financial products to customers. Around 2026, probably, if all goes well.
“The ‘Minimum Viable Product’ is anticipated to include three of the following: Savings and Transaction Bank Accounts, General Insurance, Health Insurance, ETFs, Superannuation and Mortgage Products.”
Notably, other forms of lending, such as personal and other short-term loans, are not mentioned.
Maslow has contracted with a fully licensed Australian bank “to build white labelled and/or co-labelled banking products to act as the gateway product to Maslow’s ecosystem.”
As to which bank this might be, Maslow for now is keeping mum.
In its earlier phases of operation Maslow will on-sell the products of partner vendors, without adding any profit margin, “therefore resulting in cheaper like-for-like products.”
Maslow also proposes to “act as an aggregator for key vendor partners who make a long term commitment to distributing cheaper, high quality products to the market through Maslow’s platform under a strategy that moves them away from existing aggregator sites that add significant costs to delivering their products to customers.
“Currently there are few, if any, aggregators that operate in alignment with the interests of customers” so Maslow say.
The most radical feature of Maslow is a co-ownership model for customers.
In the offer foreword, Maslow explained: “As part of its commitment to social good, Maslow proposes a unique for-purpose shareholder structure that is designed to facilitate sufficient funding optionality, whilst limiting the extractive elements present in ordinarily structured start-up ventures.
“These are ordinarily designed to extract unlimited benefit from the economy and direct it into the hands of a few.
“Maslow’s company structure includes customer ownership, caps on potential investor returns, and a process for transferring investor and founder equity to customers once a predefined, and locked, return limit is met.”
Initially, Maslow has set aside 5% of its equity to be owned by its customers, with the balance held by private investors.
Later, “over time (and contingent upon reaching profitability), investors will be required to transfer their shares to the customer pool once, if at all, they achieve a 200 times return on their initial investment, gradually transitioning ownership of investor shares to customers via its Customers Trust.
“This 200x return cap is acknowledged by Maslow’s founders as high, in the sense that it is still extractive. However, it has been established as a necessary compromise to raise Maslow’s earliest capital requirements, and has been required to attract interest from investors.
“As Maslow progresses, it anticipates significantly reducing the cap on returns in any future capital raises to reflect a reducing commercial risk profile.”
One curio about the 5% co-ownership by customers is that three years ago, when Banking Day began to closely follow Maslow co-founder Kane Jackson on Linkedin, the concept was that customers would collectively share in 25% of the company.
Along the journey, at some point last year, this got watered down to a 15% share.
To get this offer over the line Jackson and his co-founder Caitlin Robinson have swallowed some pride.
Still, in the long run, the vision is that Maslow’s customers will ultimately own 100 per cent of the company. By which time, one assumes, Maslow will have evolved into one of the most iconic and presumably most successful financial services companies around.