- Posted by Paul Towers
- On June 25, 2015
- 0 Comments
- Fintech, HashChing
HashChing is not only changing the way consumers look for home loans, but also the way in which they do business with banks and other lending institutions. Unlike many stock standard Web 2.0 companies that merely serve up a list of competing home loan offers, which you the consumer need to wade through and then apply for, HashChing helps manage the process for start to end.
HashChing is able to accomplish this by enabling Mortgage Brokers, not Bankers, to power their platform. They put forward the best offers they currently have from lending institutions around the country and even offer up other discounts such as waiving the application fee that are hard, if not impossible to achieve, if you go direct to the bank. As a result the consumer wins, once they find the deal that meets their needs they are automatically connected to a local Mortgage Broker who can then handle the rest of the application process on their behalf.
The founders behind HashChing are Mandeep Sodhi, who brings more than eight years experience in the financial services industry, as well as Atul Narang, who provided the technical expertise to build and develop the site. While interviewing Mandeep I was interested in how he arrived at the idea for HashChing. As mentioned above there are already countless review sites out there, yet Mandeep managed to find a niche that had yet to be reached. Mandeep explained that he had worked on a large number of banking projects throughout his career in finance, but it wasn’t until he went to apply for a home loan himself that he found the whole process time consuming and unfriendly to the consume.
As Mandeep would go on to mention many newspaper articles and guides recommend you ask your bank for a discount on your home loan rate. In practice however this is not any easy task, typically, the banks won’t even budge. Mandeep knew there had to be a better way and after investigating the market found that other comparison sites were preferenceing the lenders directly, when they should in fact be engaging with the Mortgage Brokers. It is the Mortgage Brokers who have the power to waive application fees by refunding some of their own commission to the borrower and it is the Mortgage Brokers who are writing the majority of home loans in Australia (now over 52%).
With this in mind Mandeep and Atul raised a $100,000 seed round in January 2015 through the AWI Ventures Accelerator Program. This 6 months program is open to Fintech Startups only and provides mentorship, guidance and advice to five startups at any one time. The program culminates with a Demo Day by which time each of the startups are expected to have launched their product.
Before we dived deep into the process of developing and launching their product I was interested in getting Mandeep’s thoughts on the AWI Venture accelerator program, and in particular how HashChing managed to get selected out of the hundreds, if not thousands of applications that are submitted. As Mandeep explained AWI Ventures select teams that either have a product they are ready to launch, or a team with a strong enough idea and background who are working towards their launch in the near future. Mandeep and Atul fell into the later category and slowly worked their way through the three step interview and presentation process before being selected as one of only five companies to join the program.
The program has been a hugely valuable process with the mentorship, advice and weekly pitches representing some of the main benefits of the program. The requirement to meet deadlines and launch the product also helped HashChing fine tune their focus and work to get the product out in the marketplace.
While this may seem like a straightforward process, it wasn’t without its hiccups. When HashChing did a soft launch to family and friends, to gather feedback on their service they were hit with a notice from ASIC. They faced a fine or two years imprisonment for providing “advice” without a financial services licence. The notice came on a Thursday evening, just before the Easter break and demanded a response by the following Wednesday. This was a shock that the team hadn’t been expecting given it wasn’t their intention to ever offer financial advice. They managed to hire a Lawyer to take care of the notice but it came at a great cost. With some wording changed on the website and a partnership with a financial services organisation which allowed them to work under their licence until they secured their own HashChing was able to move forward.
As someone who’s largest brush with a fine came from my local council for advertising material I put up when I ran my surf store I could relate, albeit on a much smaller scale, to how Mandeep must have left. Mandeep went on to explain that the tone and the nature of the letter is just one of the reasons why startups face so many difficulties in getting off the ground. The cost of engaging with a Lawyer was a big setback and the issue could have been addressed with a much gentler approach. As a result Mandeep reached out to the Chairman of ASIC and even managed to secure a meeting to address their concerns. At least we can say ASIC is open to listening, and hopefully the feedback Mandeep provides helps other startups avoid similar situations in the future.
With this concern finally put to a side HashChing went on to launch on the 5th of May 2015 with fifteen brokers signed up to trial the site initially. They have managed to secure approximately 400 unique visitors per day and generate 59 leads for the brokers on the platform. This trial was designed to test out the platform and prep it for a much wider outreach campaign which will see nine hundred brokers join the platform come August this year. This will help HashChing deliver on their goal of providing more savings, more choice and more convenience to Australian consumers.
With this influx of new brokers to the platform consumers will also see the offers segmented depending on their postcode. This will ensure that they can have access to a wide variety of brokers within their immediate vicinity. For HashChing this will also help validate the financial model of their platform that charges the broker a monthly fee as well as a small commission on each deal that HashChing shares with the consumers in the form of cashback. Essentially a win-win, as HashChing delivers a steady stream of customers looking to secure a new mortgage to the brokers on the platform.
As we wound up our interview Mandeep also wanted to mention how HashChing was going one step further and ensuring that banks in Australia lift their game. They have developed a patented application that auto-tags banks on Twitter and Facebook anytime someone posts a public review of their product on the HashChing site. This has led to banks quickly assigning someone to assist their customers enquiry, when their review could have previously gone unnoticed. While this is a great customer service piece of technology, it also has the added benefit of driving further traffic to HashChing as people see the exchange of messages from their Twitter account.
Based on everything Mandeep told me about HashChing it is clear that they have put a great level of thought into the industry and how best to secure customers. In closing out our interview Mandeep also offered these words of advice for other Entrepreneurs and Startup Founders. It is important to find the right investor who believes in you and the product. Don’t be disheartened if you are rejected by investors, because all startups are. HashChing was even rejected by investors even though they were already in the AWI Ventures program. And finally don’t rush it, work on your product or service and execute it when you are ready. HashChing has now raised another undisclosed major seed round this week to help them grow further.
Finally, I just wanted to say thanks to Mandeep for his time and I wish him Atul and HashChing success as they continue to grow and develop their business.
Latest posts by Paul Towers (see all)
- What Is The Best Coworking Space in Sydney For Startups And Entrepreneurs - August 5, 2015
- An Interview With Lawrence Ly – Entrepreneur - July 10, 2015
- HashChing Changing The Way Consumers Search For & Secure A Home Loan - June 25, 2015