Gift a precious metal? Fintech Sendgold ready for rush
An Australian startup is looking to go global with a gift idea that won’t be thrown away after Christmas: gold bullion.
“Our money is worth less every year and in Australia, there is no interest rate anymore. Money is not earning interest in a bank account – plus, gold is the ultimate hedge against inflation,” Sendgold founder and chief executive Jodi Stanton says.
After more than a decade working in risk advisory on Wall Street and for McKinsey and Co, Stanton started building her gold app two years ago. The goal was to give users a new investment platform and a gift option that wouldn’t end up in landfill.
On Thursday evening Sendgold closed out an equity crowdfunding raise of more than $530,000 via Birchal to expand its sales and marketing efforts and reach more customers in key markets, including China and India.
Users of the Sendgold app can buy, transfer or gift real gold, which is held in high security vaults in Sydney managed by Brinks Global Services.
There’s no minimum purchase amount, but the company charges a 1.5 per cent margin on purchases and sales as well as a one per cent transaction fee for using the service.
Stanton says the business, which generated $365,000 in turnover last year, has attracted investors who are 25 to 45 year old early adopters who were once cryptocurrency enthusiasts but now had more trust in assets which had stood the test of time.
“I’d call them social citizens, and they have an international footprint,” she says.
More than half of Sendgold’s current users are of Indian descent, either based in Australia or overseas, Stanton says.
The business is focused on offering its services for both wedding and Chinese New Year gifts across the world.
It’s also looking to open ‘parent and child’ accounts so family members can buy gold for each other, instead of saving cash on behalf of children.
“They’re saying, ‘tell Jimmy that Grandpa will send some gold,” Stanton says.
Sendgold is one of many alternative investment fintechs to grow an audience over the past year. Niche investment platforms like Amber, which focuses solely on the selling of Bitcoin, and Goodments, which offers micro investments in the impact space, are pitching to audiences that are reluctant to use traditional trading platforms.
Sendgold is dwarfed by other investment vehicles. As gold has become a more attractive investment in the wake of global uncertainty, exchange-traded funds, which track the value of the metal, have also hit multi-billion dollar market caps.
The gold price was sitting at $1,815 an ounce on January 1 and in the week before Christmas had hit the $2,149 mark.
Sendgold generated less than half a million dollars in turnover last year and is operating at a $518,000 loss.
Stanton says the company is poised for significant growth in the coming year and is two years from profitability. It will look to expand partnerships with loyalty programs and reach more investors keen to buy and hold the asset.
Emma is the small business reporter for The Age and Sydney Morning Herald based in Melbourne.
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