Afterpay venture fund and Brian Hartzer in data start-up

Basiq had developed technology that will allow Afterpay to categorise transactions and create personalised customer experiences, its executive vice-president Lee Hatton said in an interview last month. Afterpay Money will launch in the second half of the calendar year. In the future, Basiq could be used to conduct credit checks on Afterpay customers.

The Basiq system categorises bank account data via a process known as digital data capture, or “screen scraping”. It is preparing to use the new open banking regime when its data sets improve. Existing Basiq shareholders include Reinventure Group, NAB Ventures and Salesforce Ventures.

Basiq founder Damir Cuca said Afterpay Money pointed to a looming transformation of the industry that would result in a wide range of companies, from energy utilities to telcos, offering banking services by using banking-as-a-service offerings created by Westpac and Volt.

“Banking is something we used to do in a banking app – now we can do it in non-banking applications,” he said. “That is a fundamental shift in terms of how consumers engage with finance.”

Basiq is AP Ventures’ third investment since the fund was created in 2020; another is a $15 million investment in LayAway Travel, which has been rebranded as PlayTravel and has created a buy now, pay later service to fund trips. The company has struggled through COVID-19 but Mr Vogel said he was confident about its medium-term outlook.

It has also invested $US10 million ($13 million) for a 20 per cent stake in a buy now, pay later business in China, Happay. Given the strength of online players such as Ant Financial and Tencent, Happay is targeting the in-store market and is rolling out in large shopping centres in Shenzhen and Hangzhou.

Tencent is an investor in Afterpay after buying a strategic 5 per cent stake for $300 million when Afterpay shares fell heavily during the COVID-19 crisis.

Mr Vogel said AP Ventures planned to do two to three deals each year, as it sought to build a portfolio of seven to 10 companies, and would seek to access deals through Afterpay’s relationships with global investment banks.

Mr Hartzer confirmed his investment in Basiq but declined to comment further.

Mr Davis will join AP Ventures’ high-powered board, which includes the stockbroker who brought Afterpay to the ASX, Hugh Robertson, former Afterpay director Mike Jefferies, and John McBain, the former chairman of Melbourne IVF, who invested in Afterpay before its IPO.

Other investors in AP Ventures include fund manager Duncan Saville’s ICM Group, an early Afterpay investor; and the chairman of Thorney Investment Group Alex Waislitz, who was another Afterpay investor and has raised the potential of an IPO for the AP Ventures fund.