Ed Robinson always wanted to work overseas.
“In Sydney you knew what everyone was doing,” says the Australian over coffee in New York’s Flatiron District, a stone’s throw from the offices of his micro-investment start-up, Stash. “I wanted to get out to a bigger market and really test myself.”
It would have been just as easy not to. Growing up on Sydney’s north shore, Robinson had the right connections – his father, solicitor Andrew Robinson, does business with the likes of Mark Carnegie – and he had a good job, looking after wealthy individuals and family offices at Macquarie Private Bank.
But staying in the small pond that is Australia was not his style. Robinson moved first to London, where he helped build Macquarie’s Asian institutional trading desk, then in 2013 on to New York, where he worked on the team developing the bank’s global electronic sales. In between, the GFC struck.
Learning to adapt
“It was life changing. We’d been working 18 to 20 hours a day and suddenly people on both sides of me were being made redundant,” the now 33-year-old recalls. “I thought wow, I might have to go back to Australia.” He didn’t – but everything had changed.
“It became a lot harder to get business. We had to adapt; it wasn’t as easy as taking someone out to dinner any more.”
That lesson in adaptation has proven useful in the dizzying 20 months since Robinson and a colleague at Macquarie, Brandon Krieg, quit to start Stash. Their app-based business allows ordinary Americans to invest small amounts each week into baskets of shares grouped around interests, teaching them about saving and investing in the process.
If they think social media will keep growing they can buy into the Social Media Mania basket, for instance; if they believe in protecting the environment they might put their money into the Clean & Green category.
“We were on the trading desk one day and a research analyst said he had an extra $10,000 and asked what should he do with it,” recalls Robinson. “We thought, ‘why are you asking us? You do this for a living. If you don’t know, then what does an everyday person do?’ A light kind of went off.”
Thiel, Breyer among investors
Stash has an impressive roll call of early supporters. Venture capital firms associated with Peter Thiel, the Silicon Valley billionaire advising US President Donald Trump on tech policy, and Jim Breyer, an early Facebook backer, are among its lead investors.
While micro-investment sites such as Acorns and Robinhood operate in the same space, Robinson sees Stash’s point of difference as its strong educational thrust.
“Our research suggested financial literacy is a huge issue, not just in the US but globally,” he says. “People don’t know how to balance a cheque book, how to save. We want to teach them.”
Stash’s 370,000 users range from Uber drivers and cafe workers to members of the US military, the latter big investors in the Defending America basket, which buys into companies in fields such as aerospace and defence. The average user is 29 years old and earning about $US40,000 to $US60,000 ($55,000 to $83,000) a year.
Subscription business model
Stash is not yet profitable, but a $US25 million capital raising in December, which builds on former rounds of $US9.25 million, $US3 million and $US1.5 million, suggests some are punting that it one day will be. Growth to today’s staff level of 35 has forced the business to move four times since its October 2015 launch.
Users pay a monthly fee rather than the more typical percentage of transactions, and are encouraged to invest for the long term rather than play the market. The low-fee model means Stash will need real scale to succeed. It will also likely need to win the race against competitors to the all-important position of market leadership.
“That $US25 million war chest gives us a lot of runway,” Robinson says of plans to keep improving the app’s usability and, some day, expand beyond the US.
Robinson has met other entrepreneurial Australians in New York via Advance, an organisation that connects expats. He and his wife Carly, a fellow Australian with whom he has a 20-month-old daughter, foresee moving home at some stage. Just not yet.
“The thing about New York is it’s really aggressive. You can learn so much, people come here to work really hard, then jump,” Robinson says.
“I don’t meet many people who’ve been here for 10-years plus. You do what you need to do then leave, which means people are constantly trying to hit the ceiling, learn new things. That’s really thrilling to be a part of.”
