Following on from our Q&A with Ben Murphy, this week we get to know Alex Wong. Alex is Spotcap New Zealand’s Sales and Partnership Manager, and has been doing great work getting Spotcap established since its NZ launch in January 2017. Alex has an abundance of experience working with banks, running marketing campaigns and pioneering business development for various finance companies. With him, Alex brings his local industry expertise to the Spotcap family, and has been warmly welcomed into the fintech space.
We asked Alex to share his thoughts and opinions on the current state of New Zealand technology and finance to understand the landscape, and see which exciting businesses are up-and-coming in the local market.
What does fintech look like in New Zealand at the moment?
There are quite a few fintech businesses based in NZ… from tech companies providing solutions in the insurance and financial services sector, to well established corporates like trading banks and insurance companies investing in their own systems to develop and evolve their efficiencies. Like any emerging industry labelled “disruptive”, fintech has impacted most sectors in some form. However it is an industry that is still fragmented with multiple business operating in the same sphere, and also hamstrung by governments being slow to regulate and understand the space. As a founding member of Fintech NZ we want to become a thought leader in the alternative funding space and support further development and regulation around how fintechs operate in New Zealand.
What does the future of fintech look like for you?
I think the future of fintech is very exciting, especially from Spotcap’s perspective. I think we are in the front row of a new landscape of how businesses engage with funders. Businesses want to operate in a fast-paced and competitive environment, and the way to do this is to remain agile and continue to innovate. The business model has changed and you see technology increasingly being employed to provide scale and agility for businesses to react to market conditions, both domestically and internationally. An example is retail businesses: the buying process of a consumer is now driven by technology. Consumers will now use the internet to find information on the product before even stepping into a retail shop to purchase. So for a small business working in retail, unless you incorporate an online channel such as a website or social platform with e-commerce functionality, you may lose customers to competitors, or be overlooked entirely by potential customers. This is also true with businesses looking for finance.
Gone are the days where businesses have time to pop into the bank branch to arrange loans and wait for 2-3 weeks for a decision. They need an answer quickly, efficiently and fairly, whilst providing minimal information so they can focus on growing their business.
Can you fill us in on NZ tech week and Fieldays?
This year’s NZ Tech Week marked its second year; I believe it is a great forum to showcase to businesses how technology is impacting business models across all sectors. In my view, it is an education and awareness forum where tech companies share how technology can be incorporated in other business operations to streamline, lower costs and improve efficiencies. It shows that by embracing technology, businesses open more opportunities otherwise not available to them. Overall, tech week was very productive series of discussions and a chance for companies to understand current opportunities, along with how to take advantage of them.
Fieldays 2017 was also a great event, which we were fortunate to be a part of. Luckily, it also didn’t rain on us the days we were there! Our goal this year was to see which exhibitors had a presence at Fieldays and start some discussions along the lines of potential partnerships. We were invited to the Innovation Capital evening, where we networked with investors, corporate representatives and smaller companies with innovative products. It was great to see all the tech developments improving the agri sector – everything from high-tech irrigation to planting systems increasing crop yields. Tech is impacting all types of businesses across NZ – and it’s particularly exciting for those in the agri sector!
What other sectors do you think could benefit from Spotcap’s product?
I believe all sectors could benefit from our product. The question is more around the business funding requirements and the ways in which Spotcap can support these businesses, ensuring they go on to thrive. Small businesses that have short-term cashflow challenges are ideal for Spotcap – for example, seasonal businesses like cafes and farms, where there is typically a low period and a need for cashflow to keep the business operational. Another common purpose is asset financing, where we often co-finance with another larger scale financier. For example, a company looking to purchase a truck will have an asset finance company cover 85%-90% of the cost of the truck; the remaining 10%-15% is usually required as an upfront deposit. Spotcap can support in these circumstances through again funding that shortfall in immediate finance requirements.
Bridging finance is where a company is going through a loan application process with a traditional funder such as a bank, but requires some funds asap to activate an interim opportunity. We can support the initial capital and then once the bank funding is approved, the loan is refinanced by the other lender.
One other benefit for companies is that we don’t take any form of guarantees – either directorial or personal – nor do we require assets as security, meaning it’s an attractive option in many different circumstances. As you can see, our product is simple but very flexible in how a business can use the funds.
Looking forward: what are Spotcap New Zealand’s goals?
Spotcap has great potential in New Zealand, helping local small business grow. We aim to grow Spotcap’s market share; many businesses are unaware of the financing opportunities available to them and their businesses, so it is important that we increase our brand presence and ensure our target market is aware of us!
What we are looking at as well is providing more support in terms of content and tools to help businesses understand how to facilitate business growth. We are working with fintech NZ, government bodies and regional economic agencies to further advance this aim, with the view to enable SMEs to experience growth and prosperity through valuable, insightful content.
Our final goal for the NZ market is to grow the alternative funding sector sufficiently enough to attract other competitors that specialise in our space. I believe if we can grow the market to the point where we attract competitors, it provides more options to businesses looking for funding, and ultimately increases awareness of the sector.
Originally published June 22 2017 , updated June 5 2018