Noobill Pty Ltd Crowd-sourced funding offer document - Prismic
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noobill Pty Ltd Crowd-sourced funding offer document Dated 15th of December 2020 Offer of fully paid ordinary shares in noobill Pty Ltd at $5 per share to raise a maximum of $800,000 This crowd-sourced funding (CSF) offer document relates to the Offer of fully-paid ordinary shares in noobill Pty Ltd. This Offer is made under the CSF regime in Part 6D.3A of the Corporations Act 2001 (Corporations Act). Equitise Pty Limited ACN 600053 745 AFSL 503 190 Issuer noobill Pty Ltd ACN 626 844 273 Intermediary Equitise Pty Limited ACN 600053 745 AFSL 503 190
Contents Section 1: Risk warning 3 Section 2: Information about the company 4 2.1 Letter from the CEO 4 2.2 Company details 6 2.3 Description of the business 6 2.4 Mission, vision and values 14 2.5 Problem, solution and market 15 2.6 User and product strategy 25 2.7 Business model and go-to-market strategy 31 2.8 Technology strategy 36 2.9 Regulatory considerations & external opportunities 39 2.10 Impact driven 43 2.11 Directors, advisors and management 44 2.12 Corporate structure 48 2.13 Capital structure 49 2.14 Historical financials 50 2.15 Forecasted financials 53 2.16 Risks facing the business 55 Section 3: Information about the Offer 59 3.1 Terms of the Offer 59 3.2 Use of funds 60 3.3 Rights associated with the shares 61 Section 4: Information about investor rights 62 4.1 Cooling-off rights 62 4.2 Communication facility for the offer 62 4.3 Proprietary company corporate governance obligations 63 Glossary 65 Annexure 66 Appendix A – Constitution 66 Appendix B – Shareholder Agreement 66 noobill crowd-sourced funding offer document 2
SECTION 1 Risk warning Crowd-sourced funding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of ventures is speculative and carries high risks. You may lose your entire investment, and you should be in a position to bear this risk without undue hardship. Even if the company is successful, the value of your investment and any return on the investment could be reduced if the company issues more shares. Your investment is unlikely to be liquid. This means you are unlikely to be able to sell your shares quickly or at all if you need the money or decide that this investment is not right for you. Even though you have remedies for misleading statements in the offer document or misconduct by the company, you may have difficulty recovering your money. There are rules for handling your money. However, if your money is handled inappropriately or the person operating the platform on which this offer is published becomes insolvent, you may have difficulty recovering your money. Ask questions, read all information given carefully, and seek independent financial advice before committing yourself to any investment noobill crowd-sourced funding offer document 3
SECTION 2 Information about the company 2.1 Letter from the CEO A note from George Wang, FOUNDER & CEO Dear Investors, Thank you for your interest and for considering an investment in noobill. In the last 25 years, the internet has created an enormous shift in the way we interact with our world. Buying anything from groceries to furniture online has become second nature. We pick up our phone, and at the touch of a button, a car arrives to take us anywhere we want to go. Gone are the days of driving to the video store to rent a DVD only to find it’s not available. The most successful global tech companies of today, like Amazon, Uber and Netflix, recognised that harnessing the power of the internet to make our lives easier was the path to success. This, for some unknown reason, has not yet been applied to our essential services. In 2020, we still need to pick up the phone and call a provider to change an address, schedule a disconnection, update our credit card details or dispute a charge. Compared to industries like eCommerce, our essential services industries have fallen very far behind, remaining unchanged, stuck in the last century. The business model employed by these aging essential services companies are in conflict with the customers they claim to serve. At conservative estimates, every year in Australia, the essential services industries charge $25 billion in additional fees and payments23–29. That’s a staggering $2,500 out-of-pocket for every Australian household. During our market research, we asked interviewees to tell us what words they associated with banking, electricity, insurance and broadband, the responses were predominantly ‘expensive’, ‘rip-off’, ‘scam’, and ‘dishonest’; and our young people seem to be severely impacted by the financial stress of managing increasing household bills. The essential services market is in need of disruption. At noobill, we have combined advanced AI with mobile technology to create the first-ever ‘smart account for essential services’. Employing a customer-centric design philosophy and behavioural economics-driven decision making, noobill’s master account for essential services has transformed the process of managing essential services, reducing management time by 10x compared to traditional management tools. noobill’s AI technology is trained to review bills, learn usage and make comparisons to the market, enabling us to provide users with the most competitive rates available. Our AI capabilities also translate provider emails into simple text messages, manage account queries and updates and send real-time notifications on the status of bills and payments. noobill crowd-sourced funding offer document 4
The proprietary algorithms we developed have been designed to help people build better financial habits by bill forecasting, learning income patterns and allowing for easy set-up of bite-sized instalments to pay bills stress-free and on time. We’ve also created a rainy-day savings feature that allows users to incrementally save small amounts from their spare change, and are providing a Pay Later Account to support users in times of emergency. In the past 18 months, we have conducted over 400 interviews and surveys to confirm market needs. We built the foundational technology for the noobill app and began beta testing with our first industry (energy) in Victoria, Australia. With zero marketing, over 800 people have registered as noobill members. To date, we have providers signed up from the telecommunications, insurance and lending industries, and have a strong pipeline of further service providers ready to join. Moving forward, we are preparing for an Australia-wide launch of our product in 2021. We now need your help to build a community of people who share our vision and want to join us on this exciting journey by investing in noobill’s future. Our mission is to make the experience of managing essential services a delightful one. Together, let’s make this a reality. Yours sincerely, George Wang Founder and CEO noobill crowd-sourced funding offer document 5
2.2 Company details This offer of shares is made by noobill Pty Ltd ACN 626 844 273 (the Company). The Company was incorporated on 15 June 2018. Registered office and contact details Principal place of business 710 Collins Street, Docklands VIC 3008 710 Collins Street, Docklands, VIC 3008 Contact: investor@noobill.com 2.3 Description of the business 2.3.1 noobill noobill means “no bill worries” noobill is an Australian fintech that aims to help people The app offers a seamless experience that ensures better their financial wellbeing by empowering them to essential services are always stress-free and paid on take control of their household finances. time through user (a.k.a. “member”) scheduled bite-sized instalments. At the same time, the AI-powered price noobill is building the only AI-powered smart account comparison tool ensures that members always receive that allows for price-comparison, management and the best value rates available. payment of all essential services within the one mobile app. Free for its members, noobill will generate revenue by charging providers a transaction fee to process payments By conducting over 400 interviews and surveys to better through the app. Unlike existing price-comparison tools, understand the frustrations and needs of the market, noobill will connect providers with highly qualified leads, noobill discovered that young Australians do not feel without any significant up-front investment in marketing in control of their financial world. Inexperience and the or customer acquisition costs. increasing cost of living mean the job of managing and paying for essential services is adding to the already As a first-mover in data integration across core essential burdensome lives of young people — noobill aims to services, noobill will not only provide an unparalleled change this. automated personal finance experience; it will go beyond, with the goal of becoming a financial wellness tool to At a minimum, noobill’s smart account reduces time improve overall financial wellbeing. spent managing essential services by 10x compared to traditional management tools and empowers young people to build better financial habits, at zero out-of- pocket cost (ref 2.5.2, page 19). Energy Telecommunications Insurance Banking noobill crowd-sourced funding offer document 6
2.3.2 Investment highlights First AI-powered smart account for essential services Using powerful AI technology, noobill has created the first smart account to make price-comparison, bill management and switching providers fast and straightforward. noobill’s AI also reviews individual usage consumption and history to provide customised products and provider recommendations to increase members’ lifetime savings on essential services. Business model aligned with consumers and providers noobill’s unique ‘ecosystem’ model aligns its business objectives with the long-term goals of consumers and providers, unlike the current ‘agency’ model employed by competitors that does not deliver value for consumers, prioritises high-profits but also has high marketing and acquisition costs that ultimately get passed onto the end- customer. Consumers are a ‘sticky’ user base for essential services In providing a holistic service that helps members manage life’s essential services, noobill creates a ‘sticky’ audience by ensuring they always receive the best value and a seamless experience. Convenience and usability is further embedded over time as members integrate multiple services with noobill, cultivating loyal brand ambassadors. Strong early traction with plans for nationwide rollout noobill attracted 800+ registered users during the beta testing phase with zero marketing. Now, noobill is ready to launch and scale rapidly, targeting 160k members over the next 24 months. Backed by prominent technology investors Interest in noobill’s disruptive product and significant market potential led to a successful pre-seed funding round with investment from prominent tech investors. noobill is also proud to be part of the Stone & Chalk accelerator and a member of Fintech Australia. noobill crowd-sourced funding offer document 7
2.3.3 What is a Smart Account for essential services? Smart Account Essential services An AI-powered master account that manages all Services that people use in their everyday life, essential services in one mobile app. which include, but are not limited to Energy, Telecommunications (‘telecom’), Insurance and Banking services. Channelling the capabilities of AI technology, noobill automatically sources the best service provider for each individual member. Members are also able to switch services on and off as they like, receive real-time notifications on the status of bills and payments, set up flexible bite-sized payments, manage communications and review usage and spending through data visualisations. With a customer-centric philosophy at its core, the ‘Smart Account’ was designed to solve deep-seated issues with the current model and the antiquated methods which constrain people in the management of their essential services. 2.3.4 Why now? The age of the Smart Account We have identified several global trends, from new technology to consumer preferences and regulation changes, that have created ideal conditions for noobill to enter the market. Trends Desktop to mobile Consumer expectations Mobile technology has dramatically advanced in the The expectation for technology to streamline current past ten years. People are more digitally connected methodologies to manage essential services exists, than ever and expect to be able to do everything with no one player meeting this need. from ordering groceries to watching a movie all from the palm of their hand. AI technology Regulation on the rise “There’s going to be ‘AI haves’ and ‘AI have-nots’, and Due to the outcomes from the Royal Commission if you are an ‘AI have-not’, then you might as well on banking, increased Consumer Data Rights (open just rip out all the computers in your office and throw banking, energy, telecom, insurance, etc.) and Trust away your phones, because that’s how impactful it ID technology, noobill is well-placed to address will be” market requirements. -Mark Cuban, CES 2020 Increased usage of utilities and cost-cutting due to COVID-19 Due to COVID-19, people are staying at home and are increasingly concerned about economic instability; this creates an opportunity for noobill. With more time at home and increasing utility bills, consumers are desperate to cut costs, finding little in the way of support from the current system. noobill crowd-sourced funding offer document 8
Case study The birth of eCommerce and its similarities to the essential services industry eCommerce started in 1994 once the internet became widely used by the general public, but took off in the late 90s, once online payments became easy and secure1. In the following 20 years, eCommerce grew from 0% to 14.1% of all retail sales worldwide and is still growing2. Essential services spending is similar in size to that of the retail industry. Despite this, there are no innovative solutions to improve users’ experiences, as the internet did for retail in the 90s. Lack of innovation can be attributed to the complexity of products, individual usage and contract rules that make it hard to standardise products. Now, as AI matures, there is an opportunity to change this, with customisable and personalised essential services and experiences. Online transactions for essential services through aggregated platforms is expected to have a similar growth path to eCommerce, rising from 0% to double digits of total market transactions within ten years2. Online transactions for essential services will be in the trillions by 2030. 1. History of eCommerce, eCommerce Land, 2008 2. Worldwide e-commerce share of retail sales, Statista, 2020 noobill crowd-sourced funding offer document 9
Current industry landscape 1. Outdated model and archaic systems Industry research suggests that the largest 3–4 providers in essential services industries own 70–90% of the market, have high profits3–9, but also high costs, inflexible legacy systems and a business model that does not deliver increasing value for consumers in line with their gradually increasing prices (continued price hikes, much higher than CPI). 2. The supply chain myth Essential services providers are not the product/service owners. Energy Generator – Distributor – Home Broadband NBN Co – Home Insurance Underwriter – Consumer Loans Lender – Borrower In most essential services industries, providers do not impact the core product delivered. Their main activities are marketing and billing, rather than developing the core product or service for the benefit of consumers. Due to the competitive nature of the industry, providers need to spend big on marketing and distribution agents to compete; these costs are then passed onto consumers. 3. Electricity Retailing in Australia, IBIS, 2020 7. Health Insurance in Australia, IBIS, 2020 4. Gas Supply in Australia, IBIS, 2020 8. National and Regional Commercial Banks in Australia, IBIS, 2020 5. Telecommunications Services in Australia, IBIS, 2020 9. Electricity market is “broken”, ABC, 2018 6. General Insurance in Australia, IBIS, 2020 noobill crowd-sourced funding offer document 10
Significant opportunity exists to disrupt the status quo Changing the conflicted provider The end of the agency model vs consumer model noobill has aligned its business objectives with its Under the current Agency Model, providers spend member goals by charging no fee for use. Instead, significantly on marketing, paying agents to attract approved providers are charged a small transaction customers. To make this system work, providers fee to process payments made through the app. heavily reduce the price of their products and services at the start of the relationship to win new Essentially, noobill gets paid once a person is customers. After a brief benefit period, providers signed up with a provider and is making use of its begin passing their marketing costs onto customers, services. It’s a win-win for end-users and providers and charge more and more money over time for the alike. Essential service providers no longer need to same service, rewarding loyalty with more expensive spend vast amounts on sales and marketing. noobill bills. Plus, providers have zero motivation to rewards its providers with highly qualified leads change, meaning little is done to increase customer when they are the most suitable option, meaning satisfaction and service quality. providers will have more money to invest in better quality services for their customers. noobill will be built differently, employing an ecosystem model to develop a network of high- quality approved providers that focus and compete based on cost-leadership and best service. The future of essential services People have come to expect digital optimisation for all of their everyday activities. Automating a plethora of product and service options and personalised suggestions are the future of personal financial technology, and noobill is the only fintech to unite these characteristics in one mobile app for essential services. noobill crowd-sourced funding offer document 11
2.3.5 Initial market positioning noobill aims to be a market leader in the sub-category of essential services management tools, placing it in a unique position to co-exist with other financial apps the target demographic are already using. By emphasising accessibility on mobile devices, noobill becomes a natural leader in this newly established category rather than competing with traditional PC based comparison sites or payment processors. Mobile devices have overtaken PC (desktop) to become the primary way people access the internet; increasing from 16.2% in 2013 to 53.3% in 201910. Also, there has been a significant shift to financial management on mobile devices. Recent research in the US found that 14% of consumers said that finance apps are among the top three categories of apps they spend the most time using11. noobill identified this trend early and is now focused on mobile technology to deliver its service. noobill will establish itself, and its ecosystem model in Australia first, before expanding into UK & US markets. Among the top finance apps, the most popular subcategories include: Australia and US Banking Lending Transactions and Digital Wallets Investment Personal Finance Management Essential Services Management 10. Mobile VS. desktop internet usage, Broadbandsearch, 2020 11. App categories user spent most time on, Statista, 2019 noobill crowd-sourced funding offer document 12
2.3.6 The rise of fintech and the super app In recent years, there has been a significant rise in fintech. Research shows that 75% of consumers globally use fintech for money transfers and payments12. With the digitalization of the finance industry and the adoption of fintech products, the volume of investments in fintech companies is on the rise, with Q3 2020 venture investments of over $10 billion13. Another emerging trend is the rise of the ‘super app’ in Asia, with China’s fintech Wechat (Tencent) and Alipay (Ant Financial) leading the race with close to 1 billion users14. This trend has already spread to South East Asia, seeing the creation of other super apps like Go-Jek and Grab. With payments at their core, these super apps serve as a single portal to a wide range of products and services. Research bytoo KPMG Legacy systems, 3 found that the super app has begun to show and hard/expensive to change. momentum New system, where user in the supplier goals are aligned. West, with consumers driving the shift towards super app demand15. noobill has the goal of becoming the super app for essential services such as Energy, Telecom, Insurance and Banking. Its business model, combined with an open API technology structure and cross-sector data analytics, makes for an excellent launching point. Valuation of international super fintech apps (USD) 300 B 100 B 50 B 0B Go-Jek: 12.5 billion Grab: 14 billion Wechat 83.6 billion Alipay : 300 billion Valuation of international super fintech apps (USD) Reference 16–19 12. Consumer adoption of fintech, Statista, 2019 16. Gojek valuation, CNBC, 2020 13. Fintech VC in Q3 2020, Techcrunch, 2020 17. Grab valuation, Techcrunch, 2020 14. Race to be China’s top fintech, Techcrunch, 2020 18. Alipay valuation, QZ, 2020 15. The rise of super app, KPMG, 2019 19. Wechat valuation, Beyondsummits, 2016 noobill crowd-sourced funding offer document 13
2.4 Mission, vision and values noobill’s purpose is to empower people to build better financial habits so they feel in control of their financial world. 2.4.1 Mission At noobill, our mission is to be the go-to fintech for young Australians to compare, manage and pay for their essential services. 2.4.2 Vision To help shape fair and transparent products and services for the essential services industries that will enable people to effectively manage, strengthen and grow their overall financial wellbeing. 2.4.3 Values We support easy, stress-free responsibilities We want to make everyone’s life easier and stress-free, through a simple and intuitive product and excellent customer service to deliver a delightful experience. We empower members We empower our members with technology and data for lifetime savings and tools to help them build better financial habits. We are helpful, informative and transparent • We have a customer-centric philosophy. We always ask ourselves “how will this benefit our members?” We do not act unless we believe it will. • We have aligned our goals with our members, to ensure we are working to make the experience the best it can be. Members will know what we are doing and understand why. • We will always strive to do better. If we’re not doing well enough, we want to know about it. We are creating positive change and social impact We are seeking to create a new equilibrium and drive positive social change. noobill crowd-sourced funding offer document 14
2.5 Problem, solution, and market 2.5.1 Problem Essential services like Energy, Telecommunications, Insurance and Banking are highly concentrated with the top 3 to 4 companies owning 70% to 90% of the market20. Many of these companies are over 100 years old; their business models and distribution channels are built to maximise profits at the expense of customers and their antiquated legacy systems are hard to change. 1. Dissatisfied market Through over 400 interviews and surveys, we discovered that people are confused about their options and lack time to manage their essential services properly. It can take 5 to 10 minutes to locate past bills; calls to providers can be upwards of 30 minutes and the stressful task of researching and then switching providers can mean days of complex pricing and voluminous contracts to read and understand. Multiply this by ten, for the average number of essential services supplied to each Australian household. Consumer manages an overwhelming number of services 20. Ref, 3–8, see Section 2.3.4 noobill crowd-sourced funding offer document 15
2. Model in conflict with consumers Estimates show that essential services providers are charging Australian households over $25 billion in additional fees and payments every year. That is a massive $2,500 in out-of-pocket expenses 21–29. The current business model is set up to make profits at the expense of consumers. Providers are trapped in a system that forces competition on marketing spend. Long- time customers are punished, instead of rewarded, with regular price hikes to cover marketing costs and further maximise profits. In addition, dominant providers are outdated, with legacy systems incapable of innovation or requiring upgrades at the expense of billions of dollars. Incumbent’s legacy systems build on top of each other 21. Late fees, NEWS, 2016 26. Overpaid on insurance, choice, 2019 22. Overpaid interest on home loans, Domain, 2020 27. Missed savings interests, 86 400, 2020 23. Overpaid interest on credit cards, Mozo, 2020 28. Unessesary bank fees, Wealthy You, 2019 24. Overpaid on energy, ACCC, 2018 29. legacy banking platforms, EY, 2019 25. Overpaid on telecom, IBIS, 2018 noobill crowd-sourced funding offer document 16
3. Financial burdens of young people Research shows that young Australians are struggling to take control of their financial world. Inexperience and the rising cost of living mean that financial management is more financial survival, with the fear of the next unexpectedly large bill looming overhead. Stressed by increasing expenses and frustrated by the lack of digitization, young people want a support system to help them find stability and gain overall financial wellbeing. “One time, I didn’t budget in my quarterly electricity bill and the direct debit deduction resulted in $4 left in my account for the week. I didn’t have enough money for essentials that week. I wish there is a better way for me to budget and forecast my bills so that this doesn’t happen again.” Trent 22 / M / Student “I am in charge of paying the bills amongst my housemates, I use Excel sheet to do split bill calculations and keep track of our payments, I wish there was a better way.” Claire 26 / F / Hospitality worker “Cheaper bills would be great, but I don’t have the time to constantly check the market for better deals or to be put on hold on the phone all day to switch provider” Mason 28 / M / Doctor “I usually tend to just stay with one provider just because it’s a hassle changing plans and changing companies.” Allison 26 / F / Designer “I wish there’s an easier, more seamless way to keep track of all my bills, due dates and payments” Sam 40 / M / Data analyst “I try to stay on top of my bills, but I’ve missed payments a couple of times just because I have bills connected to so many different accounts and received in different format.” Julie 36 / F / Teacher noobill crowd-sourced funding offer document 17
2.5.2 Solution noobill is changing the way essential services are delivered. noobill’s AI powered Smart Account helps its members to compare, manage and pay for their essential services all in one mobile app. noobill crowd-sourced funding offer document 18
For consumers 1. Delightful user experiences A customer-centric philosophy noobill offers members several significant benefits over traditional methodologies. Super Convenience • Members can view, track, and manage all their essential services in the palm of their hand. • Real-time notifications on the status of bills and payments. • Provider emails are read and translated into simple, understandable SMS format. Time Efficiencies • Review of payment transactions < 10 seconds • Updating a payment method < 1minute • Moving a provider to a new residence < 2 minutes • Switching providers < 2min 2. Affordable prices A model that rewards loyalty noobill’s AI analyses each bill, comparing it to the market and providing tailored suggestions to ensure members receive the best available rates. This process is automatic and ongoing, cutting-out unnecessary fees and payments for a lifetime. The cost-savings over time are significant. This approach drives competition among essential services providers and ensures they focus on what matters to our members, i.e. cost leadership, differentiation and customer service. noobill enhances lifetime savings for consumers noobill crowd-sourced funding offer document 19
3. Building better financial habits Behavioural economic driven design noobill’s AI capabilities • Forecasts members’ bill payments, learns income patterns and breaks include personal finance bills into small instalments collected on a preferred schedule. automation • Encourages members to set round-ups on their payments to auto- save for a rainy day. • Provides members with a Pay Later Account to support users in time of emergency. Members can feel confident that they will be able to manage the payment of upcoming bills, painlessly save money and will be supported in times of financial hardship, enabling peace of mind and stress-free responsibilities. Pay day Pay later spare change 10 Bill 1 Bill 2 Bill 3 Rainy Day Savings 4. Bank-level encryption High-level security practices and processes By using our service, we recognise that people are trusting us with some of their most important personal information – we do not take that responsibility lightly. noobill has high-level security practices and processes in place and is implementing “bank-level security” to key areas within the system. These practices include but are not limited to: • Bank-level encryption with SHA-256 RSA Encryption for data storage. • SSL – 2048bit Certificate for all data in transit. • Physical security at our data centre in Sydney. • Two-factor authentication combine with device recognition. • Insurance against fraudulent and criminal activity through Charles Taylor of London. noobill crowd-sourced funding offer document 20
For essential services providers Ecosystem of customer-centric essential services providers noobill is building an ecosystem of providers by identifying prospective partners that are cost-leaders and have a customer-first approach (a.k.a. the “Ecosystem Model”). noobill awards its partner providers with highly-qualified leads when their price and service are the best matched for noobill members (refer to 2.8 for more information). This creates a win-win scenario with partner providers acquiring new customers at minimal cost, meaning they can focus on cost reduction and improving the quality of their services. The noobill app allows consumers to effortlessly manage their essential services noobill’s partner providers • No upfront marketing or customer acquisition costs. will enjoy: • A high level of customer satisfaction with minimal call centre costs • Managed payment integration • Significantly reduced customer default risk* • Improved cash flow (as providers receive payments earlier)* Many of the most successful technology companies of today have adopted the Ecosystem Model. These include Amazon, Uber and Airbnb. noobill will employ the same model, aiming to become a major player in essential service management. * often essential service providers need to come up with funding to deliver a service to customers before they can collect payment via bills. Using noobill’s payment management means providers can receive payments earlier and reduce their capital requirement to service more customers. noobill crowd-sourced funding offer document 21
2.5.3 Market There was an estimated $7 trillion spent on essential services in the OECD during 201830, including utilities, insurance, and finance. Applying an average of 3% on potential transaction revenue, the possible market size is approximately $210 billion (in revenue from transaction fees). $7 $ 2.5 $ 160 TRILLION TRILLION BILLION $ 30 BILLION OECD AUS, NZ, UK, US Total AUS 4m Millennial & Gen Z 20 - 34 in AUS Source Source DataData *Australian *Australia Bureau ofBureau Statisticsof Statistics Reference 31, 32 30. OECD household spending, OECD, 2019 31. Australian population by age, ID community, 2016 32. Australian household spending, Australian Bureau of Statistics, 2017 noobill crowd-sourced funding offer document 22
2.5.4 Competitive landscape noobill will deliver a fully integrated AI-managed Smart Account for mobile. Our market research shows that components of noobill’s product exist in the market; however, no one solution provides the holistic service that noobill will offer. Compare = Best Value Pricing Manage = Easy, Seamless Experience Pay = Empowering Members to Build Good Financial Habits MOBILE & INDUSTRY COMPARE MANAGE PAY No pushy calls Auto compare Multi-industry management SECTOR COMPANY Bill tracking Guaranteed Bill splitting Free to use providers Pay later payment Account Easy bill account savings feature Switch Mobile AUSTRALIA NOOBILL noobill ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ INCUMBENT Energy Australia ✔ ✔ ✔ ✔ RETAILER Telstra ✔ ✔ ✔ ✔ COMPARISON SITES Iselect ✔ ✔ ✔ DEALS PROMOTION Onebigswitch ✔ ✔ ENERGY SWITCH Bill Hero ✔ ✔ ✔ ✔ 86 400 ✔ ✔ ✔ ✔ ✔ BANK & NEOBANK Commonwealth bank ✔ ✔ ✔ ✔ BPAY ✔ ✔ BILL PAYMENTS Defer it ✔ ✔ ✔ ✔ Zip Pay ✔ ✔ ✔ ✔ INTERNATIONAL PFM – US Truebill ✔ ✔ ✔ ✔ ✔ ✔ PFM – UK WonderBill ✔ ✔ ✔ ✔ ✔ ✔ ✔ *companies listed represent similar services and business models “*International landscape is very similar to Australia, with more personal finance management (PFM) apps available noobill crowd-sourced funding offer document 23
Incumbent providers Most providers focus on a single essential service, do not provide automation or price comparison tools, offer minimal and often poor quality account management with limited payment flexibility. Comparison sites Generally designed for desktop, only compare a limited number of providers and are driven by commission and advertising revenue which is in conflict with consumer interests, are required to make pushy customer calls to drive sales, do not have account management capabilities to integrate with providers and do not offer customers payment options. Deal promotion sites Similar to comparison sites, with further limited services. Energy switch Have auto compare and switch service features, but are generally limited to the energy industry and do not offer account management or payment, plus, they are generally not free to use. Banks and neobanks Have some capability for bill forecasting based on linked direct debit accounts, some have manual comparison capability, but are unable to offer account management and do not have flexible bill payment options. Bill payment sites Normally are quite good at paying bills and specialise in flexible payments; and apps however, they do not offer price comparison tools or account management. International PFM Are generally mobile app based and provide some price comparison and bill tracking features; however most do not offer flexible payments. noobill crowd-sourced funding offer document 24
2.6 User and product strategy noobill has not only developed a business model that represents member needs, but it has also adopted a customer-centric philosophy and a behavioural economic design approach in all aspects of its business. This is critical to delivering an affordable and delightful experience for members that also helps them to achieve their financial goals faster. 2.6.1 Target user segmentation Gen Z and Millennials Characteristics: • Digital-natives that are likely early adopters • Likely to live in a share house setting • Likely to recommend a product or service by word-of-mouth Needs: • Tools to help with personal finance and utility payments • Ability to break large bill payments into smaller amount • Option for alternative providers with more competitive pricing Young families Characteristics: • Time-poor and busy lifestyle, full-time working parents with young kids • Managing multiple household bills • Considerable potential to become long-term adopters Needs: • Hassle-free bill management system that they can trust • Less time spent on administrative tasks and more time spent with families Small business owners Characteristics: • Managing multiple bills and services for both personal and business needs • Often have connections with other small business owners Needs: • Ability to keep track of all bills in one location • Less time spent managing bills and more time spent on the business noobill crowd-sourced funding offer document 25
2.6.2 Product strategy noobill’s product strategy decisions are centred around members, their experiences and interests. For example, what do noobill members want to achieve? How can technology, data and AI be utilised to make noobill more efficient, better at solving problems and a delight? This strategy not only applies to the design of noobill’s product but is also employed to empower its partner providers to deliver a high level of service to noobill members. Achieving member goals using the power of AI, data analytics and behavioural economics. noobill begins by developing a customer journey map of member goals to formulate how AI can automate the journey with better results for the end-user. This practice has been developed by noobill from the ground up as the AI technology implemented required training and maturity to build processes not possible before now. Identify user goals/jobs Map user journey Identify pain point Re-design the process with tech & AI Test for 10x better experience Gather feedback Improve *Behavioural economics • Dividing large bills into regular bite-sized instalments (scheduled to design examples include: be deducted on pay days) so that bills become painless and more manageable. • Members can round up their incremental payments by small amounts that are deposited into a Rainy Day Savings Account. This account makes saving money easier and ensures people are not stressed about being caught short. • Members are provided with a Pay Later Account, the balance of which matches how much they have saved into their Rainy Day Account. Encouraging members to save money and rewarding them when they do. • Encouraging members to purchase carbon offsets and/or invest (through the app) with the money saved on essential services through using the noobill app. AI & Data Analytics refer to 2.8 noobill crowd-sourced funding offer document 26
Fundamental product considerations Build trust and transparency Data provided to organisations, particularly in the essential services industry, is sensitive and important to protect. We consider every aspect of the design of our product with privacy and security in mind, providing straightforward information about how member data is used and stored. Additionally, noobill provides 100% transparency about how noobill’s AI technology works, and details how the business generates revenue. These steps are taken to ensure members have confidence in the business, processes employed, and product delivered. Reduce frustrations Utilising behavioural economics, noobill can identify consumer pain points and build processes and functions to significantly reduce frustrations. • Little visibility over the process of switching noobill provides update notifications and displays switch progress within its app. This simple solution provides clarity and control over the switching process. • Large, unexpected bills By allowing members to make small bite-sized payments on a preferred schedule, noobill significantly reduces the burden of bills, and helps young people to budget and better manage their finances. • Reporting outages and complaints Instead of making members call to remedy a problem, noobill provides in-app customer reports and complaints. This means no more waiting on the phone; members can simply report and get on with their day. • Little community support noobill will create a community forum where members are encouraged to share their experiences, issues that have arisen and the solutions they found to be helpful. Support financial wellbeing noobill is not just a product to manage essential services; it goes beyond, as a tool to support overall financial wellbeing. How noobill helps to develop and support overall financial wellbeing for its members: • Automatic and ongoing market price comparisons to increase cost-savings and reduce financial burdens. • Bite-sized instalments on each member’s schedule to help with budgeting and to ensure no nasty surprises, i.e. large, unexpected bills. • A feature that allows members to round up their scheduled instalments, setting aside the additional amounts in a Rainy Day Saving Account to make saving money a little easier. • A Pay Later Account that is matched dollar for dollar by noobill based on Rainy Day Savings Account balance. The Pay Later Account can be drawn on by members in case of an emergency and provides members with peace of mind that they will be supported if in need. noobill crowd-sourced funding offer document 27
2.6.3 Product overview noobill will launch with core essential services and functions in Victoria, Australia. Later, it will enter into more services and expand Australia-wide, introducing more and smarter features as it grows. noobill is planning both vertical and horizontal expansion for future growth. noobill’s core features already provide significant value for members and are ready for rapid adoption Australia-wide. Additionally, the product development pipeline continues to grow with plans to develop new features and services that will launch in 2021. noobill crowd-sourced funding offer document 28
2.6.6 Product roadmap Product roadmap 2020–2022 Over the past 18 months, noobill built its foundational technology, launched its beta app and began testing with energy (i.e. electricity and gas) in Victoria, Australia. noobill is on track to launch its core product and extend its presence into NSW in January of 2021, providing members initially with electricity and gas; broadband will follow shortly after in February of 2021. noobill will be in all Australian states and territories by the end of 2021. Theme 2020 2021 2022 More affordable Bill review of usage and price Bill forecasting – Compare & Switch Ongoing individualised price comparison Use forecast bill to compare future savings Easy in-app provider switch Auto switch with savings goals Switch progress tracking Service faults and complaints reporting AI reads and provides contract summaries Bill and Contract tracking Provider ratings Communications sorted by conversation Easily turn services on/off Community support Extended email translation across various documentation, voice text to reply Delightful experience – Manage Important emails translated to text messages Bill splitting feature Local virtual help community Realtime notifications on bills and payments More and better customised notification Use noobill ID to sign up for other subscription services Digital onboarding Security and privacy Member, provider communication Multiple property management Customised privacy options Transactions between users enabled Include small businesses in property Easy payment management Communication with providers via chat management Transaction history More services available Provider reviews provided by members Apple/Google Pay, PayPal and credit cards Provider emails managed in-app as payment options Interactive visual dashboard Bite-sized pay on scheduled payment dates Spare change saved into a Rainy Day Savings Account Multiple investments and savings goals Build better financial habits Money saved reinvested Pay Later available for more than bills Personal finance tracking with Open Allow for management of other bank Banking accounts or cards Auto learn income patterns for the self employed Allow savings into the Rainy Day Account from other transactions Pay Later Account for support in emergencies Rewards points donated to a charity of for good Set up carbon offsets for energy Other impact initiatives Impact choice Extend charity programs – Powered by AI technology noobill crowd-sourced funding offer document 29
Location roadmap 2020–2023 noobill plans to expand Australia-wide in 2021, with international growth into the US and UK markets set for 2022. Location Roadmap Year Location 2020 VIC 2021 first half NSW QLD SA 2021 second half ACT WA TAS NT 2022 UK US 2023 Other OECD Services roadmap 2020–2022 Additional features and services will continue to go live on noobill over the 2020–2022 period, with the end goal of delivering a ‘super app’ for personal financial management. Services Roadmap Year Services 2020 Electricity Gas 2021 first half Broadband Mobile Home Loan 2021 second half Health Insurance General Insurance 2022 Other subscriptions Other Government charges Investments Personal Loan Credit Cards Term Deposits noobill debit card noobill crowd-sourced funding offer document 30
2.7 Business model and go-to-market strategy 2.7.1 Business model Marketplace and payments Unlike the traditional agency distribution model, which conflict with the goals of consumers, noobill has built its model on transaction revenue without commissions. Members are not charged for using the noobill app, and partner providers are rewarded with highly qualified leads, at zero upfront marketing cost, when they provide greater quality and cost leadership. Sources of revenue Primary Transaction fee as a % of member bill payments that are deducted from payments to providers. Other Pay Later Account monthly fee When a member withdraws money from their Pay Later Account, there will be a small monthly fixed fee until the money is repaid (via scheduled instalments). Card payment processing fee When a member makes a payment with a method other than direct debit, there will be a 2-3% transaction fee. This fee is to encourage members to pay via direct debit but still offers them some flexibility. Our research confirms that both members and providers understand and are satisfied with noobill’s model, with several providers already signed up to supply products. Energy Broadband Health Insurance Lending Providers signed up or on-boarding noobill crowd-sourced funding offer document 31
Benefits of the model Aligns noobill, consumer and provider Long term relationship with members interests. with recurring revenue. Zero marketing or customer acquisition High retention rate, product stickiness costs for providers. will continue to increase over time. Combines product selection and Highly scalable through rapid payment management all in one app, deployment of new services. free for members. Helps members to manage their money, which has a flow-on effect of reduced High customer lifetime values default risk and better cash flow for providers. noobill’s customer lifetime value* is much higher and driven by ongoing value for consumers * Customer lifetime value is calculated based on noobill’s financial forecasts. noobill crowd-sourced funding offer document 32
2.7.2 Go-to-market strategy noobill is a Smart Account for management of essential services on mobile. This positions noobill as the only holistic utilities and financial management app in the market. noobill’s strategy is to continue optimising based on member data, needs and feedback to improve usefulness and to provide an unparalleled user experience. It is expected the noobill app will provide a far superior experience over methodologies currently employed for essential services management, so that the product will lend itself to growth driven organically by members. Below are the noobill’s three stage growth plans which includes both organic and paid growth methods. Launch (1st half of 2021) Word of mouth noobill is designed for sharing, with mechanisms built into the app that prompt members to share with friends and family. Plus, members are rewarded with carbon offsets and cash-back on their bills when someone they have shared with successfully signs up. App store optimisation Through testing, we found that most noobill members to date organically discovered noobill in the app store while searching for a to help with utilities management. Google advertising noobill joined Google’s growth partnership for 2021, where a specialised team will work with noobill on accelerating growth. Google’s AI will automatically test all available channels for the most cost- effective app downloads by target audience. The current estimate is $2–3 per download with a conservative 10% conversion for each acquisition below $30. Grow (2nd half of 2021) Organic growth noobill is set to launch a bill splitting feature in 2021 that will allow members to split household bills with their friends and family in-app. This feature will greatly assist in noobill’s organic growth, with each member becoming a micro ambassador for noobill, at zero cost. Content marketing noobill will create and place content, relevant to members’ interests, across its online platforms; this, backed by a comprehensive SEO strategy, will build brand recognition and organically drive new member sign-ups. Social media and noobill will partner with influencers on select social media. These influencers will influencer marketing review noobill’s product and share it with their vast audiences. noobill has also set up its profile on several social media platforms and will develop and execute a social media strategy centred around generating new leads through sharing. noobill crowd-sourced funding offer document 33
Leads (2022) Employee and noobill will aim to partner with employers looking to provide valuable benefits to member benefits employees. To attract partners, noobill will focus on promoting its cost-saving and financial wellness features. Partner promotion noobill will partner with organisations in real-estate, car sales, universities and charities, promoting itself as a financial wellness tool that will add value to their customers’ lives. Digital advertising Once noobill has developed into full maturity, it will employ digital advertising to further grow its membership. Cost advantage on customer acquisition As a mobile app, noobill has a customer acquisition advantage over traditional essential services providers and desktop-based price comparison websites, with lower, one- time-only, customer acquisition costs and zero call centre costs. noobill’s cost advantage on user acquisition vs capital intensive competitors Reference 33 33. Comparison websites customer acquisition costs, Iselect noobill crowd-sourced funding offer document 34
2.7.3 Brand positioning noobill’s brand and visual identity is positioned to be trustworthy, honest and a little playful, inspiring personal growth and delivering a sense of safety. Current essential services industry vs the future of essential services Old Model noobill Model Profit-first 1 Profit-first Customer-first Antiquated tech 2 Next-gen AI-powered tech Legacy systems, too hard/expensive to change. 3 New system, where user and supplier goals are aligned. Our research confirms that young Australians are struggling to gain control of their finances. Inexperience and the increasing cost of living mean the job of managing and paying for essential services are adding to the already burdensome lives of young people. noobill aims to change this. noobill is the only smart account for essential services that delivers a customer-first product, backed by technology to promote stress-free responsibilities. With powerful AI and a customer-centric philosophy at its core, noobill will not only help to manage everyday essential services, but it will go beyond to become a financial wellness tool for the young and digitally native who want to improve their financial wellbeing. noobill’s brand is built on transparency and honesty, speaking directly with members, in a language that resonates. noobill exists not only to serve members but as a guide that empowers them to enjoy building better financial habits so they feel in control of their financial world. noobill crowd-sourced funding offer document 35
2.8 Technology strategy noobill is a fintech company which is building an ecosystem to transform how essential services are delivered and managed. Transforming the traditional system The key to transforming the current, antiquated system is technology. Traditionally, essential services providers build their system on top of a core product. This system was adequate before the internet, PCs and mobile phones, but now makes it challenging to innovate and create products that are supportive and engaging for digitally native, young consumers. Incumbent’s legacy systems build on top of each other Tech to empower the ecosystem noobill is employing best practice principles from leading global tech companies, building its foundational technology to be a flexible, super-scalable and secure modular system. At the centre of noobill’s system is the core database and AI technology. Each module will take data and instruction from the core system through a flexible API structure. The modular system enables rapid innovation, scalability and fast integration of new and partner modules. Additionally, each module will generate its own data, creating a feedback loop to the core system. Plus, noobill’s AI will continue learning to further develop its intelligence over time. This structure underpins noobill’s plan for rapid innovation and product development, ensuring its place as a market leader in the essential services management space. AI AND CORE TECH CRM noobill App Product Transactions noobill’s modular system enables fast innovation noobill crowd-sourced funding offer document 36
2.8.1 Activities driven by data noobill’s core database is strong and flexible, designed to support member property, relationship, product and service information. All transactions are stored in a robust ledger system, and member data points are captured with every interaction in the noobill app. A separate database exists for providers. It includes products within noobill’s ecosystem as well as those on the market, documenting price, contract and provider rules. The core database will provide the foundation for our AI technology. 2.8.2 AI technology Think of noobill’s AI as a group of mini AIs, each focused on learning different information and tasks. These mini AIs explore noobill’s core data, learning, developing and getting smarter over time. AI with senses noobill’s AI is being trained to read utility bills, service contracts and provider emails. Once this project reaches maturity, noobill will be able to provide its members with features such as bill reviews and product and price comparisons, and it will be able to translate provider emails into simple, easy to understand SMS messages. noobill is at the early, but promising, stage of training its AI, learning through manual inputs from the development team. The AI’s intelligence will increase as membership numbers rise and the process will accelerate. AI with analytics noobill’s AI is learning to analyse documents, transaction data and user behaviour; increasing its understanding of consumption levels, income patterns and personal preferences. Collecting and analysing this data will mean noobill can provide smart suggestions on the best-fit products for its members, and will share tailored tips to help members build better financial habits. AI with predictability noobill’s AI will be able to predict a member’s usage, incoming bill amounts, income patterns and service needs. noobill can then use the information it collects to provide members with a clear picture of their future financial standing, automate their budget planning process and send tips to help build better financial habits. noobill crowd-sourced funding offer document 37
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