Fred’s empire is worth ‘almost a bil’ but he hasn’t changed his penny-pinching ways. Here’s why

Tech entrepreneur Fred Schebesta has lunch with Ben Grubb.
Tech entrepreneur Fred Schebesta has lunch with Ben Grubb.Credit: Dominic Lorrimer

When TikToker Fonzie Gomez asked Australian tech entrepreneur Fred Schebesta how much his business empire was worth, “almost a bil” came the response from the 42-year-old self-described “eccentric and crazy kind of guy” who is known for founding product comparison website Finder.com.au, his evangelism of and investment in cryptocurrencies and his clifftop castle in Sydney’s South Coogee purchased for $16.8 million in 2021.

While his estimation of his shared empire’s worth back then was, in September 2021, a billion (Finder itself was valued at $650m in a capital raise in December of that year), a 2023 estimate by the Financial Review put his personal wealth at $210 million. That same newspaper, a sister publication to this masthead, estimated it was $340m in 2021 based on Schebesta’s interests in Finder, other known ventures, property holdings and dividends.

The so-called ‘crypto castle’ perched on the cliffs of South Coogee.
The so-called ‘crypto castle’ perched on the cliffs of South Coogee.

Billionaire or multimillionaire status aside, where does he suggest we take him for a lunch interview? Darlinghurst’s Dumpling & Noodle House.

“It’s not fancy but it’s good,” he says humbly via text. The total cost? $31.60. This could possibly be the cheapest interview in our “lunch with” series ever. Regardless, Schebesta feels uncomfortable not paying.

“I’ve got to take you out!” he says as we dig into pork fried noodles and juicy xiaolongbao.

I ask whether the estimates of his wealth are accurate. “I don’t like [talking about] that stuff,” says Schebesta. “I don’t want to be someone, I want to do things. I haven’t created my greatest creation yet. I’m still seeking it.”

Advertisement

Likewise, he doesn’t like to discuss his investments too deeply – “I got into trouble talking about [them] … I learned my lesson” – beyond saying that he has a stake in cryptocurrencies like bitcoin (he also likes Ethereum), shares, debt, real estate, and health data and crypto companies. “I feel my house is a big investment [too],” he adds (which is available for private events and to rent for $17,100 over two nights minimum).

It’s early January when we meet and he’s excited to talk about the birth of his newborn son, Axel, just seven days prior. “I don’t think anyone’s written about that by the way. No one knows. People in my company don’t even know that.”

Schebesta reads Rick Rubin’s “The Creative Act” to his newborn son Axel.
Schebesta reads Rick Rubin’s “The Creative Act” to his newborn son Axel.

“It’s just magic,” he says of having another child – his fourth. “It’s like … amazing. It’s almost so puzzling… I don’t know how it quite makes sense to create another human.”

He pulls out his iPhone to show me a photo of him reading the book The Creative Act, by Rick Rubin, to Axel just hours after his birth. Hamilton Helmer’s 7 Powers was read to his other son at birth.

Axel joins that other son, three-year-old brother Wolf, as the second child Schebesta has had with his partner of eight years, Brenda. His two other daughters, Portia, 14, and Tsaatchi, 11, were born to his ex-wife, Jessica Kiely.

“My former wife, Jess, I love her,” Schebesta says. “She’s amazing. And I know this sounds weird, but we all go travelling together every year. She came over to the hospital as well [to see Axel]. We all hang out … And we’re actually going to the snow on Saturday.”

Advertisement

It’s a ski trip to Austria (half his family is Austrian). “It’s the one thing I do every year and I commit to. It’s not negotiable,” says Schebesta, who, apart from skiing, also likes to run and surf.

But this year’s holiday is, he admits, “a bit controversial” compared to others. Why? I’ll let him explain.

“[Jessica’s] going, my two girls, Wolf, and my nanny, Georgia, she’s coming as well. My partner [Brenda] … she’s staying in Sydney with the new baby.”

Schebesta’s adamant it’s all above board and that while Brenda would rather be going to the snow, “she’s just had a cesarean”.

“So if you’re taking the nanny, who’s looking after the baby?” I ask. “So she [Brenda] is, yeah. I’ve got Wolf and the two other kids.”

A former kitchen hand and Pizza Hut call centre operator, Schebesta grew up in Allambie Heights on Sydney’s northern beaches with his doctor parents who owned their own practice. They sent him to the expensive all-boys school Sydney Grammar (he wanted to send his daughters there, but it has been resisting his calls to go co-ed.). At one point his parents lived in a caravan outside the practice for about a year and a half while their home, in desperate need of an upgrade, was being renovated.

Advertisement

It wasn’t until his early 20s, when his mum gave him a laptop, that Schebesta began to flourish, charging businesses thousands of dollars to create their websites before he founded Freestyle Media in the early 2000s with schoolfriend Frank Restuccia, who is now Finder’s chief executive after Schebesta stepped down in 2022 to take on the less demanding role of chairman.

Pork fried noodles.
Pork fried noodles.Credit: Dominic Lorrimer

Freestyle Media scooped up, or “squatted” on, internet domain names (the string of letters followed by .com or .com.au, for example) in the hope they would become valuable and one day be able to be on-sold at a higher rate. It worked; the business sold for $1.36 million in 2005 when he was 23.

But the real money didn’t start rolling in until two years later when the first iteration of Finder was born – credicardfinder.com.au, a website that compared credit cards and made a commission from financial institutions if consumers signed up to them.

The free service has since gone on to compare more than 100 categories, including more than 1800 brands – everything from home loans and bank accounts to insurance, mobile phones and plans, broadband, streaming services and electricity. It claims to be Australia’s most visited comparison site, with more than 4 million visitors a month and 400,000 app users.

Xiaolongbao at Darlinghurst’s Dumpling & Noodle House.
Xiaolongbao at Darlinghurst’s Dumpling & Noodle House.Credit: Dominic Lorrimer

The business came about after mapping out 14 different ideas and narrowing them down to just five that would later be launched: a Mother’s Day presents website; a Sudoku site; a Christmas supplies site; a site selling poker chips and poker tables; and the credit card comparison website.

Advertisement

“The credit card finder [site] … just kept doing better and better every sort of month, every day,” Schebesta says. “I was living on a credit card, you know, so I knew a lot about credit cards,” he laughs.

To keep things affordable, he lived in a five-bedroom share house that housed about 20 people total throughout the time he was there; he ate tinned spaghetti almost every night; strapped his disintegrating shoes together with gaffer tape; went to events for free food; and sometimes even “borrowed” rolls of toilet paper from restaurants.

Schebesta at home in South Coogee.
Schebesta at home in South Coogee.Credit: James Brickwood

“My shoes right now,” he says, “I’ve been wearing them for six years. I love value. That’s what Finder is about as well.”

Old habits die hard.

Schebesta says this frugality now extends to the number of sheets of toilet paper he uses (he’s a two-ply guy), squeezing toothpaste tubes until they’re completely dry, getting $0 DIY haircuts and purchasing his phone outright so that he can use a prepaid mobile SIM from Boost Mobile, which uses the entire Telstra network. “So I get Telstra [coverage] but I don’t pay Telstra prices.” (After this interview, I make the switch from being a 10-year plus post-paid Telstra customer to Boost’s pre-paid SIM, saving $61 a month).

He also calls up companies to complain about fees if he’s ever overcharged. “I don’t want this to sound weird,” he says, “but I run a comparison business”.

Advertisement

This type of penny-pinching was ingrained in him when he was young. “My grandfather was a very frugal man. He saved everything and he was very good like that. My mother as well. She just knew how to squeeze every dollar out.”

But Schebesta’s frugal thinking doesn’t extend to what he thinks Australia’s prime minister should be paid. “At least $1 or $2 million. Minimum!” he declares, saying this would attract the best talent (it’s currently $587,000). And he believes governments should have longer terms too – at least four years (the maximum federal term is three years) – to counter what he describes as “short-termism”. Amid the politics part of our chat, he acknowledges he’s donated to “both sides” of the political spectrum, and is “a bit of a swing voter”, but doesn’t harbour any political aspirations.

“I would be a terrible politician,” he says.

His Finder empire now has about 300 staff, and Schebesta shares his life, and business advice, with his more than 100,000 followers across TikTok and Instagram where he documents things like falling asleep on his office floor, or even mid-meeting while sitting, and the fact he’s been sober for more than five years.

Fred Schebesta sleeping on an office floor.
Fred Schebesta sleeping on an office floor.

But for the businessman who wakes up at 5am, he recalls a traumatic time when Finder faced a near-death experience. “It was brutal,” he says. “We did literally almost have to close shop.”

Schebesta is referring to a nightmare scenario in 2011 when Google slapped Finder with a penalty for breaching its marketing guidelines. Finder had reverse-engineered the search engine to work out how to get to the top of its results by publishing “loads” of relatively low-quality content and by purchasing links on other sites to boost its rankings. At the time, these were considered by Schebesta as “grey hat” techniques to game the results.

“That was what you did back then,” he says, “Everyone did.”

But now Google had deemed them “black hat”.

The penalty resulted in Finder becoming virtually invisible on Google (which it heavily relied on), resulting in an 85 per cent drop in traffic.

A samurai sword hangs in Finder’s office with a plaque that commemorates the “bravery of the men and women who fought to recover Finder’s rankings”. It took about three months to get the website ranking properly again.

A samurai sword that hangs in the office of Finder.
A samurai sword that hangs in the office of Finder.

In Finder’s New York office, a baseball bat commemorates another moment in time: the year-and-a-half overhaul of every single page on the US website, unrelated to the Google penalty. Its inscription reads: “Come at me”.

Now, another challenge looms for Schebesta as he awaits the outcome of a Federal Court case lodged in December 2022 against Finder subsidiary Finder Wallet by the Australian Securities and Investments Commission (ASIC).

A baseball bat in Finder’s New York office has an inscription that reads: “Come at me”.
A baseball bat in Finder’s New York office has an inscription that reads: “Come at me”.

Finder Wallet offered a crypto product called Finder Earn that promised consumers a stable, deposit-like return above the official cash rate – an annual compounding return of either 4.01 per cent or, in some circumstances, 6.01 per cent, in exchange for the use of their funds by Finder Wallet.

Finder has previously said Earn was “not a banking product [or] savings account”. But ASIC says it is, in essence, a “debenture”, and therefore needed to be offered via a financial services licence.

The bill for lunch.
The bill for lunch.Credit: Dominic Lorrimer

Despite Finder defending the case and a judgment yet to be delivered, it was decided to shut down Finder Earn, though Finder Wallet still exists to buy and sell crypto. It’s a decision that left Schebesta devastated and caused a dent in his confidence.

“I got rocked by the past sort of … two years,” he says. “It’s hard when you go and put so much love into something [Finder Earn] and put so much capital in something and then, a bit like the Challenger rocket ship, it sort of took off … and just got hit by a meteorite on the way.”

Given the baseball bat and samurai sword, I leave lunch pondering what weapon Schebesta will choose next to represent the ASIC battle.

Most Viewed in Business

Source: Thanks smh.com