Funerals pricing disrupter Gathered Here raises capital

Simon EvansSenior reporter

May 17, 2021 – 12.00am

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An online pricing disrupter set up four years ago to bring more transparency to the funerals industry is enjoying a renewed growth spurt after offering a wills service.

Gathered Here, founded by Colin Wong, has just completed a $1.1 million capital raising after strong demand for cheaper wills, with around 600 wills having been written each month via its platform.

Mr Wong said the capital raising, led by BetterLabs, the venture capital arm of the RAC motorists’ organisation in Western Australia, was the first time the company sought funds from outside investors. Other investors in the raising included Josh Slattery who heads a national surveying company, and Murray Bleach, chairman of Tidal Ventures.

Gathered Here was initially set up to bring more transparency to funeral industry pricing. Louie Douvis

Mr Wong said Gathered Here had made steady progress as a funeral pricing comparison website, with advances in technology and the migration to e-commerce in the past 12 months adding momentum.

The decision to offer a wills service had sparked strong demand.

“We’ve experienced really significant and fast growth in this area,” he said.

He said about 600 legally binding wills were written each month through the platform and the company aimed to expand its market share.

Gathered Here was established when Mr Wong went through a tough time trying to arrange a funeral for his great aunt.

Subtle shift

He said he had found it very hard to get quotes from funeral directors at the time and he was encouraged to come into a funeral parlour if he wanted to obtain a price. He said in the first few months of Gathered Here’s existence he faced fierce opposition from funeral directors who were upset at having their prices displayed online.

But there had been a subtle shift now and there was more openness.

It comes as investors in Australia’s biggest funerals company, the ASX-listed InvoCare, weigh up the prospects for the company which last week held an investor day where it outlined its strategy and growth plans. Funeral companies have had a rough time in the COVID-19 pandemic because of restrictions imposed by governments on the numbers of people who can attend services.

Stockbroking house Citi said one of the main takeaways from the Invocare investor day was that death rates would likely be relatively subdued over the next decade at an underlying 2.5 per cent in Australia.

Low growth industry

“This is a low growth industry,” it said in a report.

“As a result, to grow profit at a faster rate, there will be a requirement to focus on ‘services and adjacencies’.”

InvoCare’s national brands include White Lady Funerals and Simplicity Funerals.

It aims to reinvigorate its suite of brands, lift operational excellence and maximise the use of technology.

“The success of the business will be reliant on the execution of the strategy,” Citi said.

“The strategy relies on leveraging the existing assets and improving the position of the existing brands in Australia”.

Citi has a “neutral” rating on InvoCare and a 12-month price target of $11.50 on the stock. Invocare shares closed on Friday at $10.40. It traded higher than $12 in mid-February.

Morgan Stanley analyst James Bales has a 12-month target price of $11 on InvoCare and said the company had outlined clear return on invested capital targets.

He said the strategy of maximising value rather than pursuing market share was an acknowledgement that “goals need to be realigned”.

Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com