Two best mates take on the trad banks. One NZ gets the greenlight text-via-satellite testing. Birkdale is the first suburb to leave copper behind. How to opt-out of LinkedIn’s AI training. The tide is high - but where?
Business banking start-up Emerge has closed a $12 million Series A round – which comes on top of $10m across four seeding rounds – and is aiming to sign 15,000 SME customers over the next 18 months.
Co-founders Jamie Jermain and Jovan Pavlicevic, who have five kids between them, started SquareOne in 2021. They saw a market gap for an app that provided parents with tools to help kids learn about money and savings – and provided them with a MasterCard-backed debit card, with a $5 per month fee. In April this year, they expanded to launch Emerge, which Pavlicevic pitches as “the future of business banking”. (The company is not a registered bank, but aims to be.)
Instead of a boss sharing their credit card, which risks it getting lost, its details scrawled everywhere and people texting the CVC to each other – staff are issued with physical and digital debit cards that can be loaded with funds and used by everyone in the business.
Emerge captures receipts in an app for expenses, integrates with Xero, supports Apple Pay and Google Pay, includes real-time alerts and allows the likes of scheduled payments and card limits and controls.
Being outside traditional banking allows rapid onboarding, Pavlicevic says.
“If you walk into a branch and say: ‘I’ve started a business. You’ve already got my mortgage. You’ve got my personal accounts. You’ve got my credit cards and insurance. I’ve banked with you for 35 years. I’d love a business bank account, please,’ they’ll say: ‘Sure, come back on the 35th of Nevervember and when we’ll present you with a ream of paperwork. We might want you to bring your accountant in to talk to us and give us a Dragon’s Den-style pitch about your business and why we should grant you access to this sacred, uh, magical thing called a business bank account.
“What can take four or five months and multiple branch visits becomes four or five minutes with Emerge. You can download our app and do it in the comfort of your home.”
If Emerge succeeds in becoming a registered bank, it will gain the ability to lend funds – or, more specifically, to lend funds against customer deposits – and offer overdrafts.
To be fair to the traditional banks, this is big part of the reason they make you fill in that paperwork: because you’re not just going to load your firm’s own money on to a debit card but tap a line of credit. A lot of information has to be collected to meet legal requirements around lending. And, of course, the bank wants to find out if your business is worth its salt and has the wherewithal to make repayments.
Pavlicevic acknowledges all that, but says that because Emerge is starting from scratch, with no branches and an all-digital set-up, it can have more streamlined systems from the get-go.
The big banks have legacy systems have to cater to all customers, including those without an email address or smartphone, Emerge is mobile and web only, including AFT-CFT compliance.
“We’ve built the industry’s simplest offering. No branch visits and no paperwork thanks to a fully digitised anti-money laundering process,” Jermain says.
And his “Nevervemeber” riff notwithstanding, Pavlicevic says “We’ve got great relationships with all the banks. We see ourselves a ‘co-opetition’.”
Behind the scenes, Emerge is using a key service from the biggest bank of them all.
“Your money is held in a secure trust account with a major New Zealand bank with an S&P AA- rating (the highest in New Zealand). This means your funds are protected even if something were to happen to Emerge,” the startup’s website says. Who is the bank? “ANZ,” Jermain says.
For the debit cards, Jermain emphasises Emerge is a Mastercard principal issuer and licence holder (as opposed to an affiliate further down the food chain) and integrated into the multinational systems across 200 countries.
Jermain knows cards inside out after a 25-year career that’s included roles at Visa, Mastercard, Paymark and The Warehouse Group (as head of payments) while Pavlicevic knows what’s like to be on the borrowers’ side of the fence after running a string of start-ups, including a financial advisory business and chartered accounting practice he built in the UK then sold before returning to New Zealand.
The $12m round was led by Altered Capital (which also has backed Starboard Maritime Intelligence, Crimson, Oritain and UK “neobank” Starling) and supported by Icehouse Ventures, Sir Stephen Tindall, the New Zealand Fintech Fund, and US VC Hard Yaka (an early investor in Square and Robinhood).
Including three seed rounds – the largest of which was a $5.8m round also led by Altered, which is now the single largest shareholder with a 24% stake.
The new funds will be used to ramp up go-to-market efforts. Pavlicevic says the pair had the BHAG (big hairy audacious goal) of 37,000 customers for SquareOne but are now at 180,000 and counting with their kid-focused cards. They’re hoping for similar success with adults.
“SpaceX has received the necessary legislative permissions to allow One New Zealand to begin field testing its revolutionary Satellite to Mobile service and this will begin very shortly,” One NZ said late on Friday.
One NZ engineers will soon be testing the new service on a variety of mobile phones in different locations in Aotearoa to determine the user experience so that launch plans can be finalised, the firm says. An initial text service will be followed by voice and data down the track.
The telco had long promised the mobile blackspot-eliminating service would launch by the end of this year, but had to switch to an open-ended timeframe after a regulatory challenge to the globally operating Starlink in its home market – where it’s partnering with T-Mobile and rivals AT&T and Verizon claimed the satellite service would cause interference with regulator mobile service.
But on October 8, SpaceX and T-Mobile were given emergency special temporary authority by the FCC (Federal Communications Commission) to enable Starlink satellites with direct-to-cell capability to provide coverage for cellphones in areas affected by Hurricane Helen and Hurricane Milton. Hypothetical questions raised by AT&T and Verizon became a real-life trial, with issues reported so far.
“When we announced our collaboration with SpaceX, we were dealing with the aftermath of Cyclone Gabrielle, a stark reminder of the necessity of a resilient back up to our mobile network, which can be disrupted by climate-related, fibre and power outages,” says One NZ CEO Jason Paris,
“We’re unfortunately seeing this play out with Hurricane Milton in Florida right now, where Starlink satellites with direct-to-cell capability are playing a vital role keeping people connected as the extreme weather has disrupted their ground-based mobile networks. That’s why starting testing here is a giant step forward on our mission to bring coverage like never before to New Zealand.”
Paris added, “While safety is our first priority, we also believe the additional coverage the service will provide will be a boon for NZ productivity, with companies across the country using it to stay in touch with their teams, whether they manage a fleet, or are simply a small business that travels, the added assurance this satellite network will bring is invaluable.”
The One NZ CEO was back in crime-fighting mode late Friday after an assault on two staff. Police were called to the telco’s Westfield Riccarton store in Christchurch at 2.30pm. Inquiries were under way to locate the offender. Paris said one of the staff had been taken to hospital to be checked out. This customer will be trespassed from all of our stores will be disconnected from our network and will never ever be allowed back,” Paris said. In May, One NZ closed a downtown Auckland store over safety concerns.
An update to LinkedIn’s privacy policy, which will become effective on November 20, notes that the Microsoft-owned professional network platform can use your content for AI (artificial intelligence) training, if you live outside of the EU or UK (where rules on AI and privacy are tougher than other jurisdictions).
If you don’t like the sound of that, you can opt-out here. Our Privacy Commission has a preference for “privacy by design” or a customer having to opt in rather than opt out, but it’s not the law. Companies do have to guard the privacy of data they use for training. LinkedIn says it will redact or remove personal data to stop it featuring in AI responses.
Like so many services, LinkedIn now lets you use an AI assistant for generated responses or content, but UK publication The Register noted LinkedIn’s policy also makes you responsible for any errors.
A section of the policy reads: “Generative AI Features: by using the Services, you may interact with features we offer that automate content generation for you. The content that is generated might be inaccurate, incomplete, delayed, misleading or not suitable for your purposes. Please review and edit such content before sharing with others. Like all content you share on our Services, you are responsible for ensuring it complies with our Professional Community Policies, including not sharing misleading information.”
Chorus says Birkdale, on Auckland’s North Shore, has become its first fibre-only exchange.
When the fibre rollout began in 2011, Birkdale had approximately 7000 copper connections.
Phones attached to copper lines had the key advantage that they would continue working through a power cut, but internet over copper is slow and, unlike fibre, speed degrades with distance from the exchange, and technology support copper is just not being made anymore.
In areas where Chorus fibre is available, service withdrawal notices have been issued for approximately 90,000 copper connections so far. About 35,000 copper lines remain in service in Chorus fibre areas, the firm says.
Chorus wants to switch off all copper by 2030. Regulatory oversight includes a provision for a household to be issued with a basic phone if there’s no alternative for emergency calling.
Hat tip to Greater Auckland, which noted in its weekly round-up: “With summer just around the corner, and swimmable cities on our mind, it’s always good to know where the tides are. A note in the inbox this week reminded us of a local connection for Tideschart.com, which is the world’s most popular marine forecasting website, visited over 50 million times annually.
“Turns out the founder, Ryan Blundell, grew up in Hobsonville Air Force housing (now Hobsonville Point) where, as a child, he often relied on checking the tides to go swimming or fishing near the Sunderland Hangar. This experience influenced the creation of Tideschart.com, which now provides tide information not only for New Zealand, but also for some of the most remote locations around the world that are often overlooked.”
Blundell says his site saw a huge surge of traffic during Hurricane Milton.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
Government, banks respond.