Huddle Money sets sail to be world’s first P2P bank
Sydney-based Huddle Money has raised $6m in its first funding round to push ahead with its ambition to create a P2P bank. The start-up will initially provide general insurance products, backed by Hollard (whose MD Richard Enthoven led the round), and money management tools aimed at educating and engaging with customers through the help of a rewards system. As the company grows, it plans to challenge existing business models for insurance, investments, and loans and eventually build the world’s first P2P bank. Huddle has obtained necessary regulatory clearance to sell insurance, however, the Australian Government has since launched a regulatory sandbox to enable fintech firms to test their ideas with real customers for up to six months without having to hold a financial services licence.

It aims to create a service, underpinned by a rewards platform, whereby consumers can learn more about managing their finances, and will subsequently expand to offer broader peer-to-peer lending options.

"It would be a nice catchphrase to say that we are the TripAdvisor of financial advice, but it is a little more complicated than that," Buck says.

"We secured our AFSL [Australian Financial Services Licence] and we have the authorisation to deal in insurance and will overtime be expanding as all citations to deal in the full suite of peer to peer lending."

The initial insurance offer is more traditional financial services than peer-to-peer, which would involve consumers relying on each other for backing policies, Huddle Money will be selling general insurance products backed underwritten by Hollard.

Hollard managing director Richard Enthoven is backing Huddle Money.

Wilby says it is a different model to traditional insurers due to Huddle Money's focus on educating consumers and engaging with the broader community online.

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Its rewards platform incentivises customers to use educational tools for taking control of things like their credit score, managing their budgets and putting together financial plans.

"When customers buy an insurance policy from AAMI or NRMA it is a bit of a one-way street that most people feel is a product they never actually get anything back from," he says.

"We are building a reward scheme into this product where customers can actually get cash back and unlock value, but also we are strengthening their financial resilience by increasing their comprehension and education around the products and their financial well-being."

Mr Enthoven said he shared the founders' vision for the future of the industry, and that Hollard was endeavouring to remain at the forefront of digital disruption.

"I believe that the time is right for big advances in customer-led financial services," he said,

"As an example, Huddle Money will aim to engage customers in new ways, so that those customers better understand their financial position and how they can unlock their potential."

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The launch of Huddle Money comes as the government is trying to encourage Australian fintech companies to set up, by introducing a so-called "regulatory sandbox" to test their ideas with real customers for a period of six months without having to hold a financial services licence.

It came too late for Huddle Money to take advantage of, as it has already secured its license, but Buck says it demonstrates the favourable market conditions the company is launching into.

"Any way that regulators can help other startups like us to test ideas in a safe way for consumers will be very good for the industry," Buck says.

"We are looking forward to an increase in the amount of startup fintech activity that happens in Australia, because we think it will be good for consumers and also hopefully good for Huddle Money as well."