Fintech continues to dominate the Australian technology sector, with online shopping assistant Afterpay taking out the 2018 Deloitte Technology Fast 50 Awards.
Launched in 2014, Afterpay has recorded average revenue growth of 8,134% over the past three years to reach a market capital now in excess of $2.5 billion.
The 'modern layby’ allows customers to purchase everyday items online via a payment plan of four equal installments of the original purchase amount, to be paid fortnightly.
Despite its ‘buy now, pay later’ business model, Afterpay claims to be “an advocate of responsible spending” and will not allow customers to reach an outstanding limit above $2,000.
Around 30% of order request are declined due to lack of available funds or poor past payment records, according to the company’s fact sheet.
“We congratulate Afterpay Touch Group for winning both the 2018 Deloitte Technology Fast 50 Australia Award and the Fast 50 Leadership Award from an outstanding field of Australian business innovators, who collectively drove revenues of over $1.5 billion for the Australian economy last financial year,” said Deloitte Australia’s Technology, Media and Telecommunications Leader, Kimberly Chang.
Interest-free payment solution ZipPay, which gives customers a line of credit up to $1,000, finished fifth in the Fast 50, with 1,245% growth.
“Companies like Afterpay, Zip, Prospa and MoneyMe are genuine success stories for Australia and reminders of how fresh thinking fintechs are fundamentally changing the ways we pay for goods and manage our finances,” said Technology Fast 50 Lead Partner, Josh Tanchel.
Despite the accolades, the popularity of Afterpay recently triggered a Senate inquiry into ‘buy now, pay later’ providers and lease-to-buy schemes.
Currently, Afterpay falls under a regulatory blackhole as it is not covered by the National Credit Code, meaning it is not treated as a lender and therefore is not legally required to undertake income checks before providing credit.
The inquiry will look into whether this code should be expanded to include Afterpay and other such platforms.
“Financial counsellors are telling us that their clients are coming in with increased debts, as a result of predatory debt-management firms and other unlicensed financial services providers,” said Labor Senator Jenny McAllister, who moved the motion for the inquiry.
The Economics Reference Committee is currently accepting submissions for the inquiry into ‘Credit and financial services targeted at Australians at risk of financial hardship’, ahead of a 22 February 2019 reporting date.
NBN and software also growth areas
Fintech companies made up 24% of the Fast 50 companies, followed by software (22%) and IT and communications (20%).
NBN service provider MATE Communicate placed second, with 3,703% growth over the past three years.
Bevan Slattery’s Superloop Limited finished third with 3,703% average annual growth.
Superloop builds carrier-grade, metro fibre networks in Australia, Singapore and Hong Kong and fixed wireless networks in Australia.
“This year’s list tells us that we are going to see further challenges to traditional finance models from the fintech sector and serious growth in AI development, in 5G telecommunications and in the implementation of cloud-based business systems,” continued Tanchel.
Up and comers
The awards also recognised ‘Rising Star’ businesses – high-growth companies with less than three years of existing revenue.
Cloud solutions centred consulting firm Barhead topped this list with average annual growth of 16,330%.
“Innovative new technologies challenge existing business models and create new opportunities across all industries,” said CEO of ASX, Dominic Stevens.
Human resource consultancy firm WithYouWithMe (3,427%) and marketing technology group Playground XYZ (3,078%) finished second and third on the ‘Rising Star’ list.