Business for Sharesies has boomed in 2024, with the investing platform experiencing over $7 billion in trading volumes so far this year.
Despite a year of high inflation, high interest rates, and constricted consumer spending, Sharesies’ trading volumes have still managed to double the $3.5 billion it reached in 2023.
Sharesies co-founder and co-CEO Leighton Roberts told interest.co.nz that 2024 had been the company’s biggest year in its seven-year history.
At the start of 2024, Roberts said Sharesies was in a “macro-holding pattern” due to higher interest rates, and that the business had focused on diversifying to reduce its sensitivity to macro trends.
“But at the end of the day, the cash available and the appetite for investors into the assets that we offer on the platform is primarily driven by macro sentiment and interest rates. So once that came through, it started to look like it was going to ramp up, and it certainly did,” he said.
Artificial intelligence (AI) reignited interest in investing during 2024, demonstrated by the surge in tech stocks, Roberts said.
The US election also boosted trading on the Sharesies platform, which saw its first $1 billion trading volume month in November.
The wealth management platform, which now offers a range of financial services, was started in 2017 and now has over 650,000 customers in NZ. The company is expecting to reach 800,000 NZ customers by the end of 2025.
Sharesies’ Australian business, which began in 2021, will reach 100,000 customers in the next two to three months.
“Sharesies is a growth company and we’ve always been loss-making, but this year we will almost definitely finish the year cashflow break-even,” Roberts said. He picked ‘turn’ as the word to sum up 2024.
“It just felt like for all of the year we were close to bottoming out, and in the last three or four months it feels like it has bottomed and turned, and now we're just at the very early stages of that turn,” he said.
“Whilst it's still very hard out there for a lot of people, it seems like we're at the start of the next cycle.”
Rolled out
Roberts said Sharesies had always intended to be a wealth product, but in the past the business hadn’t anticipated how susceptible its revenues would be to market fluctuations.
“At its worst, which was sort of 2022, there was a massive decrease in our revenues,” he said, adding that since then, Sharesies has become “very cost-conscious.”
“We’re still a very ambitious company, but strong balance sheets are very important for financial services businesses. We’ve really got a lot more disciplined at that, and I guess that's part of moving out of a startup phase and into a more mature company.”
This has meant Sharesies has concentrated on padding out its product offering.
Its KiwiSaver scheme, which was launched in late 2023, has been in full swing this year and reached almost 10,000 members and $300 million in funds under management (FUM).
Roberts said the Sharesies KiwiSaver is still in “growth mode” and the company is “just getting started on that with regards to the product.”
Sharesies also started offering car insurance in 2024, a decision partly inspired because Roberts missed his car insurance renewal reminders in the mail.
Sharesies’ car insurance, which is offered through a partnership with Cove Insurance, now has over 2,000 members, and Roberts said the platform is interested in branching further into insurance next year.
“The numbers are looking strong across that, and customers seem to be happy with their prices, and we're able to be competitive there,” Roberts said.
Other initiatives that Sharesies has also ticked off in 2024 included launching a PIE fund, partnering with Fonterra to offer a platform for Fonterra farmers to trade Fonterra shares, and acquiring equity management platform Orchestra.
Roberts said Sharesies would be keeping an eye on the market for more acquisitions next year.
“We keep our eyes open on that, and we're always trading off whether we think it's better, whether we can build it ourselves or whether acquiring it is the best option,” he said.
Sharesies is anticipating a strong year in 2025, with Roberts picking ‘thrive’ as his word for next year.
“Primarily, you just can't walk past the interest rate environment changing and people obviously having a bit more optimism for the future,” Roberts said.
“So I think more people will be moving money out of cash, and there's going to be a bit more discretionary income available again, and that will flow through the economy.”
1 Comments
It's easy to make money when the underlying market you're operating in is booming. Share markets have seen 20-30% increases last 12 months and as a share investor/speculator you would have made money no matter the platform.
The proof in the pudding for them will be after the next crash when everyone gets spooked and becomes risk averse.
Nevertheless, good on them, bringing in much needed competition and a wake up call to the incumbents. My guess is whatever they're planning will be too little, too late.
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