GROW Super was one of the hot start-up super funds, along with Spaceship and Zuper, that made a splash as the future of superannuation for Millennial investors.

But despite a Millennial-style marketing campaign, including a launch on satirical site The Betoota Advocate, co-founder Josh Wilson shrugs off the Millennial tag.

“I don’t think we ever came out and said we were going to be a Millennial fund,” he says. “That was a tag that got thrown on us a lot by the media because we were all of the age that people considered Millennial.”

Wilson’s disowning of the Millennial tag reflects the company’s true intent to be a B2B service provider, but it also signifies recent developments at the company.

A new model for super admin technology

While GROW Super still operates a super fund, the company has pivoted to become a player in the super administration technology market.

GROW, which recently hired respected industry player Adam Gee as Head of Strategy, has developed a new blockchain-enabled technology solution, TINA, that it says represents a possible “step change” in the industry.

TINA, named after Tina Arena and her song ‘Chains’ in homage to its blockchain infrastructure, not only cuts administration costs, but promises to help funds boost operational performance and member experience by opening up the traditionally closed administration platforms.

“We’re in an age now where we should be able to plug and play best-in-breed capability across a range of solutions and not be impeded by legacy technology,” Wilson says. “Such a model is not available in the current market and is a game-changer for funds who wish to use their own preferred providers to differentiate their offering. That’s what we want to address with TINA.”

Planting the seeds

GROW began after Wilson and co-founder Mathew Keeley met at Coogee Dolphins Rugby League Club. Keeley was a financial planner to high-net-worth individuals.

Wilson had run digital and product transformation at the Commonwealth Bank, before launching StatEdge, a rugby league data tool. He then joined enterprise blockchain software firm, R3, setting up their Asia Pacific operations.

Wilson says GROW’s mission was to “bring genuine financial well-being to real Australians”. The focus was improving member interactions.

There was an obvious ‘Millennial flavour’ with its social media marketing campaign and GROW has had some success. It has $60 million of funds under management and 15,000 members.

But it hasn’t been easy. “We were cognizant from the outset that the B2C market was always going to be a tough nut to crack from a financial resources perspective,” Wilson says. “There were pretty entrenched structures in the B2C market especially with default funds.”

Wilson says the plan, however, was always to be a B2B company; to use the fund to validate its core member-experience proposition and take that to funds and white label it.

Josh Wilson CEO Josh Wilson with office star distraction Axe. Photography by Aran Anderson.

Challenge the catalyst for bold new direction

But then GROW hit an obstacle. Administrators didn’t want to plug GROW’s member experience technology into their platform. “We ran head-first into a wall,” Wilson says.

“Rather than opening their ecosystems to allow best-of-breed solutions to be plugged in, it was very much a closed environment. Different verticals would be filled with affiliated or owned platforms of the administrator.”

At the same time GROW was having problems with its own administrator and saw an opportunity to improve that model.

A year and a half ago, it decided to pivot its business.

Wilson says administration has become significantly more complex. “They’re not just operational,” he says. “The administrators have evolved to be data houses for the funds, and there’s more demand for capabilities that enable online member experiences, deeper analytics, deeper segmentation, and integration of advice.

“All of a sudden, administrators have found themselves not only having to be a BPO[business process outsourcer] but having to provide a whole range of technological capability that the core systems were never really designed to handle.”

GROW believe the closed administration platform was hampering funds’ performance in other areas such as analytics and marketing because it denied or reduced access to the best technology, but also data.

“If it’s locked up, it’s closed, it’s difficult to extract things from and difficult to modularise, then it’s going to be difficult for funds to curate a best-in-breed ecosystem across verticals that administration influences but shouldn’t necessarily control the IP of, including advice, marketing, CRMs, analytics, member experience.

Blockchain opens new integration opportunities for funds

GROW developed the TINA super admin platform, which is built on the open source distributed ledger (blockchain) platform of Wilson’s former employer, R3.

“We wanted to build something that can harness the technology of today, which is why we’re using distributed ledger technology as a key part of the infrastructure.”

TINA performs key administration activities more efficiently. Wilson says proof of concepts that GROW is running, including with its own funds, is seeing a 50 to 60 per cent increase in operational efficiency, which should flow into a material reduction in cost.

But Wilson says blockchain and efficiencies aren’t TINA’s main distinguishing feature.

“The key value proposition we wanted to put forward was the ability for funds to have greater control over how they deliver value to their members.”

Open architecture for funds to plug and play

TINA ‘enables’ the rest of the fund ecosystem through open architecture that allows funds to plug and play a range of different, market-leading providers via its ability to integrate with any platform.

Should a fund, for example, wish to utilise a specific Customer Relationship Management (CRM) platform, a separate data analytics provider and a particular financial advice engine, these can all be integrated into TINA to offer a best-of-breed ecosystem.

GROW is currently conducting proof of concepts with a number of funds using TINA. Wilson says the response has been “fantastically positive”. “But the proof will be in the pudding when we can demonstrate scale, security, stability and the commercial side of it in a meaningful way, and that’s what we’re focusing on at the moment.”

To fund the new business model, GROW completed a $17 million funding round in May 2019. That brought a number of parties to the register, including Citigroup, which invested through a strategic investment fund, and Greenstone, Australia’s largest insurance provider which is 45 per cent owned by Canada’s second largest pension fund. R3 also took a stake in GROW.

“It’s a solid register and has given us a good foundation from a funding perspective,” Wilson says.

GROW will look to do a final raising towards the end of this year, which Wilson says is in progress already.

What about GROW and super?

GROW hasn’t given up on the super fund. “The fund is still a significant part of our business because we really believe in the value proposition,” Wilson says.

GROW is looking to use its masterfund to allow other brands to launch their own products. “This effectively means they don’t need to go through the entire establishment process and as such, reduces their speed to market,” Wilson says.

Wilson says despite the Millennial tag, GROW’s fund was designed for anyone who wanted a better super experience.

He plays down the power of Millennial’s as a target market for super funds. “I personally think the whole Millennial piece gets hugely over played. The behaviours attributed to Millennials are more broadly reflective of society. I don’t know if age is really a great way to define a segment of people when it comes to their superannuation.”

He doesn’t have a strong view on how funds can improve engagement with the Millennial market.

“Whether or not funds do a good job talking to those guys I don’t have an opinion because we don’t think it’s that valid a demographic, other than to say I think there’s huge opportunity as an industry to make sure all members, regardless of age and background are getting the most out of their superannuation experience and getting a dignified retirement.”

Super specialist Adam Gee joins GROW

Adam Gee Head of Strategy, Adam Gee. Photography by Aran Anderson.

GROW’s main focus, however, is TINA.

In May the company appointed respected industry player Adam Gee, pictured, as Head of Strategy. Formerly CEO of research and ratings house SuperRatings, and most recently Lead Partner of KPMG’s Superannuation Advisory Practice, Gee says that “if you told me 12 months ago I would be working for a tech company doing administration I probably would have fallen off my own chair”.

“I’m still the only one [at GROW] who wears a suit,” he adds. “And I’m not sure if that will change too soon.”

Attracted to the potential of TINA to bring a “step change” to the industry, it was the different way of thinking put into TINA that was an opportunity he couldn’t turn down.

Gee believes administration has always been the key ‘pinch point’ for operations, and while administrators are doing a reasonable job with the technology at their disposal, the market is ripe for disruption.

“Existing providers in the market are somewhat inhibited by their technology. It’s not easy to plug best of breed systems and be able to access data in an efficient and cost-effective manner.

“Whilst TINA is built on the distributed ledger, the value proposition is its open architecture. The ability to integrate with any system in the market and the ability to provide data almost immediately to those ancillary systems which will enable funds then to improve member experience, or garner significant efficiencies in their investment operations, is critical.”

Gee says he has spent his first month in discussions with 20 to 30 funds. “I think the level of excitement and interest in the platform has been palpable.”

Gee says while the focus is on Australia and making sure TINA is completely robust, TINA will create other opportunities. “We need to execute it right in Australia,” he says. “But once we can do that and get runs on the board, we can start to think about other options in international markets which we are connected to already. There are also other products we will consider subsequent to this.”

Ensuring security, stability and scalability

Wilson says working on GROW has been exciting and fulfilling. “It’s been awesome. The opportunity is so big to make such a big impact on millions of people. That’s incredibly exciting.

“Even if we were to fail tomorrow. To see how many people do really care about doing the absolute best thing for members and trying to drive better outcomes for them is awesome.”

Wilson says GROW defines success as the launch of the TINA platform across several clients, who are then truly able to differentiate the experience they provide to members, through access to their own data real-time and the ability to tailor superannuation outcomes for their members by plugging in industry-leading providers and services.

But despite the excitement and opportunities, Wilson is realistic about the challenges. “The biggest challenge for us is overcoming perception risk. This is new, it’s untested. But a lot of my work, and Adam’s work, is focused on making sure that security, stability and scalability are built into the business to give funds comfort we’re going to be here for a long time and that the vision is the right one.”

Mathew Keeley (founder), Duncan Shrimpton (Founder / Head of Product), Josh Wilson (CEO, Founder) and Adam Gee (Head of Strategy). Photography by Aran Anderson.