Chris Titley: Hi, it's Chris Titley here as part of the FinTech Fun podcast series. I'm joined by Anton Phillips, CFO of DelayPay, live from New Zealand today. Anton, thanks so much for being part of this series. Speaker 2: Thanks, Chris. Thanks for having me. Chris Titley: Anton, can you tell the listeners out there a little bit about, uh, your involvement in DelayPay, what DelayPay is, and I suppose a little bit about your background? Speaker 2: Sure. So DelayPay is a buy now pay later for farmers. I met the guys that sort of founded that business. About four years ago, uh, in a, in a different life in, um, when I was in corporate finance, um, and about two years ago, joined that business as, as CFO. How did it come about? They sort of picked out of the market that there was plenty of consumer focused buy now pay laters and, um, and plenty of asset funders and things like that, but nothing that was quick and useful for sort of larger transactions. Speaker 2: And particularly. Um, you know, farmers having to deal with the seasonality of farming. So, you know, for six months of the year, they're pushing all of their chips into a crop and then sort of run out of runway for two or three months. And that happens year in, year out. Um, and you know, they, they realized that there was a three month gap there where they could sort of fill the void and, and help to, to get a crop off or get white gain or whatever it is on a, an asset Chris Titley: and Anton in regards to the size of the transactions. Chris Titley: Can you talk about. Um, I suppose the minimum and then the maximum, um, what the sweet spot is for you. Speaker 2: So we fund anything from 10, 000 to half a million, uh, on average, I think it's about 35, 000 as a, as a per ticket size. Um, and it's a really simple process, how it works. We effectively. Fund an invoice. Um, and so we take a position on that invoice. Speaker 2: You would often say, you know, the Scott packs of the world, well, where they sit on the sale side and they'll sort of buy invoices on the backend. In essence, we're working with the buyers, um, and sort of funding their purchases instead. Um, very similar model, but obviously different side of the transaction from a product perspective. Speaker 2: Like we, we, No position, all that we're concerned about is, are you a primary producer? If the answer is yes, um, we'll back you to make the decisions on your business as a farmer, um, whatever those decisions are and, and we'll sort of support you all the way. We have 180 day limits. So by now, 180 days later, six months, um, pay then, or any time up between, between now and then. Speaker 2: And the sort of very simple pricing structure as well, fixed pricing. Everyone gets the same. We don't sort of differentiate whether you're good credit, bad credit. We have a limit of where we'll participate and, um, and you know, how to play on that, on that basis. Chris Titley: I'm curious as to know the sort of the market opportunity, the market size, and I suppose the competitive landscape and where you fit in and some early feedback from customers. Speaker 2: Yeah, sure. So we've done just under 90 million in transactions today. We've got about 5, 000 farmers across our database that have really used us over the last few years. Looking at the rates, we're about 75 percent of our customers today. used us last year. So it's very repetitive in nature, which is great. Speaker 2: And I think just by virtue of us being super simple, um, people tend to use us again and it's very as required basis as well. Obviously we're not here to be a credit card or here to be Some, you know, a daily transaction. It's, you know, uh, there's an opportunity. Someone's at a, at an auction or they want to pick up their neighbor's piece of kit or, you know, some, some cattle use delay pay, get it funded and paid for in 24 hours. Speaker 2: And then, you know, go and work with the banks to get refinanced out over the next two months. And, and we know that, you know, the typical lenders are taking a long time and today more so longer than ever, um, to make decisions. Um, and so that's sort of how that works. When we think of, um, the market opportunity, like I'm not going to sit here and say, Oh, it's Australian farming debt because we're so far away from all of that. Speaker 2: Um, I'd say there's, there's a small segment of farmers. Um, there's about 30, 000. sort of farming businesses in Australia that turn over, you know, less than a million bucks a year. So we don't want the corporates. We don't want the ones that are just starting out. You know, I've got two sheep on, on their hobby farm, 10 minutes out of Melbourne. Speaker 2: You know, it's the, the smaller farmers that are either buying and growing and, you know, succession out of family or, or along those lines. Um, they're probably only turning over one, two, three hundred thousand a year, um, but they've got ambitions for a little bit more. We sort of sit in that segment, um, and we reckon there's about 30, 000 of them in the country, you know, so it's pretty large. Speaker 2: And, um, if we look at sort of the limits that we set, it's about a hundred thousand dollars a limit that we'd sort of typically So in essence, it's about a 30 billion market and, you know, people that compete in now, they're going to like stock co very dedicated to livestock, um, ag pay, um, similar to what we do, but, um, again, sort of dedicated to smaller transactions and livestock. Speaker 2: Um, and yeah, a couple of other guys doing similar things, but not open to everything that we do. We'll, we'll fund everything. They're all sort of asset class based, I suppose. Chris Titley: And you mentioned before about the credit checks and, and the due diligence. Can you talk us through the due diligence process that you managed? Chris Titley: Obviously there's. These are not, you know, large enterprise grade farms, but there's, they're on a, uh, I suppose, uh, you know, there's smaller operators, but, uh, not, not too small obviously, but how do you do your due diligence? Speaker 2: Yeah, sure. I mean, from a usability point of view. Um, so if you're, you're applying for funding, It's super simple. Speaker 2: All we need is a driver's license and an ABN. Um, on the back end, all that we do is go and check sort of your history as a trader, as a, as a business owner. Um, you know, if you haven't got defaults and things like that, it's more or less pass, pass or fail. Um, we do do a sort of criminal history check and things like that. Speaker 2: Um, and then, you know, we've obviously got a big network of people that use us. So, Um, we'll often see whether there's been some red flags or something along those lines that pulls it out. Um, and then, you know, we plug into your very general credit watch and things like that as well, which, you know, as many would know, the sort of smaller enterprises, it really doesn't do a lot of value there. Speaker 2: But, um, you know, when you pair that with four or five other little plugins. you can start to get a good picture of the individual that we're, we're looking towards. Um, and equally, you know, one of the reasons that we're in agriculture and farming is, you know, it's a very asset rich business, um, and extremely cash poor. Speaker 2: So, um, you know, these guys are getting tied up a lot of their, their sort of wealth into, into assets. Um, and we acknowledge that and know that, you know, As I said before, six months, it gets very tight and then you get paid your one check a year or your two checks a year. Um, so we sort of help with that and we take the position on the farming side. Speaker 2: Um, noting that, hey, if everything does go wrong, there's, there's assets there. Um, more so than your typical SME businesses, I suppose. Chris Titley: And Anton, when it comes to some recent news, obviously the business, your business Delaypay needs to get some funding from somewhere. Can you talk about some recent news? Speaker 2: Yeah, sure. So probably I guess we started these conversations maybe six months ago. Um, about two weeks ago, we, we locked away, um, a 16 million capital raise into the business. Um, 15 of that is debt and a million is sort of preferred, preferred equity, um, or, or sort of subordinated debt, which is really exciting. Speaker 2: It sort of gives us. Two things. Um, one capacity to keep going and growing and commitment from our investors that they sort of like what we're doing. Um, but sort of on the other side, it sort of changes the structure a little bit where rather than just being solely funded by an individual, um, you know, now we've got the capacity to sort of raise some funds. Speaker 2: And provide, um, sort of fixed return to, to our investors as well, which we didn't otherwise have. So, you know, we took, was a great sort of opportunity for, for our existing investors and opened it up. Um, and, you know, we've managed to lock that away and get, um, very quick and, and, um, sort of fill that, fill that book pretty quickly, which is nice. Chris Titley: Anton, I'm interested to know about the speed of delivery. I mean, you mentioned there's a bit of a gap sometimes, but in the world of agriculture, I'd imagine that speed is of the essence. Can you talk about how fast you guys can deliver, deliver the funds to people that need it? Speaker 2: So for us, if we're not quick and convenient as a, as a provider, you know, people will just go elsewhere. Speaker 2: And, and, and so we're not here to compete with the banks or compete with anyone else. Um, we're here when people have an immediate opportunity and need funding in 24 hours. And we're sort of renowned for doing that. And that's not a, a maybe that's, that's a definitive. That's what we do. Um, you know, and by that, I mean, we speak to someone at nine o'clock in the morning, um, by six o'clock at night, I would have had a deal funded. Speaker 2: Um, you know, if they obviously slow and providing the information where you need it, it can be hard, but if you come with the two things we need, we'll come to you with the part that you need as quick as we can. So it works really well. And, you know, On average, I think from on average, from when someone first comes to us as a brand new client, they're locked away and done within two days, um, which is, which is awesome. Chris Titley: Anton, I'm curious around the technology and farming. There's a lot of talk about AI in every aspect of the world. Um, can you talk about farming tech, I suppose? And is there any sort of habits or trends that you're seeing, which may, may or may not impact your business? Speaker 2: Yeah, sure. Um, we actually just partnered with a little group called XAG, and we funded a few of their transactions. Speaker 2: So they, they offer drones and the drones sort of go out and put fertilizer in specific areas. And it's a pretty interesting, pretty interesting proposition that they've got. Um, it's probably about as close to farm tech as, as we'll get. Um, I mean, I do see that there's, there is a lot of investment into that sphere and, and maybe I'm seeing more of a disconnect than ever between sort of the investment that's getting put into ag tech and then sort of the farmers wanting to use it. Speaker 2: And, you know, you go to some of these, um, sort of agricultural field days and things that are farmer focused and it's very traditional. Um, and then you go to the one that's, you know, in Brisbane where you are or in Sydney and there's no farmers there. You've got a bunch of investors and things that are involved. Speaker 2: There's no one sort of connecting the two and it's really interesting point though, right? Like if, because if you don't have the end user being bought into the whole process, it'll just never work. You'll, you'll have great ideas, but ideas alone mean nothing. Um, and so I think we'll see, and we're probably seeing a little bit more in the last 18 months, I'd say, particularly as investments that have got harder. Speaker 2: Um, and people need to go and focus on who's my end user. How do I get close to them and get them buying our products where you'll see a lot more sort of farmer integration into some of these pretty exciting opportunities. I mean, the concept of drones putting fertilizer was probably very conceptual five years ago, but. Speaker 2: Now we've sort of started in the middle of about 10 transactions, which by all accounts was a flurry over six months. So they were doing something right very quickly. And, and, you know, it's interesting for us. That's for sure. Chris Titley: Do you keep an eye on the farming trends or things like food security or, or the, the, you know, consumption of dairy, et cetera. Chris Titley: And is there any. industry or specific verticals that you focus on within farming? Speaker 2: Um, look, we don't focus on any vertical as a, as a whole. Um, are we interested in certain things? Absolutely. Um, ironically, I'm very interested in the wine sector, but we tend to sort of veer away from that industry quite a bit. Speaker 2: Maybe that changes now that China's sort of opened up a little bit. We'll see. A lot of our growth Two years ago, it was driven to livestock. So obviously livestock prices had an absolute run for a while, and you could see, you know, the elders return was given their public was, was astronomical. Um, you saw stock co their growth was astronomical and we certainly. Speaker 2: Received a lot of benefit from that. Um, that obviously dropped off maybe 12 months ago now, or thereabouts. Um, and we were very fortunate to sort of maintain our size of business people sort of, instead of buying livestock ended up switching to feed and fodder and machinery and things, um, I think from our business, you'll see pockets where people are being more opportunistic. Speaker 2: So at the moment, um, obviously there's a lot of sort of dry country and sort of South Australia and Southwest Victoria. Um, and so people were looking to book in, feed and sort of We were funding a lots of hay, hay deals, um, and that's just going to shed. So they've got some security to be able to fatten up animals. Speaker 2: Um, and then that'll switch that, uh, you know, and it's starting to switch. Now we're seeing people are, are starting to get some urea out and want to lock in pricing and, and we can help them lock in a good price because they can pay for it and negotiate their cash terms in essence. Um, and so it's nice. Speaker 2: We can sort of see. where people are spending every week of the year, um, uh, by what's getting funded and sort of locked away. Chris Titley: And Anton, when you're not talking farming or farming tech or distributing money to farmers that need it, um, what, uh, what's, what's a bit of a hobby that, uh, some listeners may not know about you or what's, uh, What's the outside of work interest? Speaker 2: Yeah, right. Well, my interests have changed over the last, uh, last seven months. We've just had a baby, so, um, I've been thrown into the deep end on that one. Um, but, uh, it's very exciting. That's a good thing. Um, I'd say cooking. I'm, uh, love to just spend time in the kitchen and Chris Titley: Okay. Speaker 2: Kelsey, who's also one of the founders, he's a baker, so, you know, we'll be on our nine o'clock meeting having a bit of a chinwag, he's pulling some bread out of the oven and, you know, I'm doing the dishes from the night before, but it's, uh, yeah, definitely cooking homemade pastas and, you know, bottle of wine to use that as a rolling pin, that's the go, I think. Chris Titley: That's, that is the go. Um, is that, uh, is it, you obviously said pastas, is it something which sort of, uh, is your signature dish or not quite there yet? Speaker 2: It'll have to be a pasta. I think they're just quick and easy. Um, I know Italian food as a whole is fairly delicious, so you can't really go wrong. And, um, a bit of white wine and butter and that's, what more can you ask for? Chris Titley: That's right. That's right, Anton. Thanks so much for being part of the Fintech Fund podcast today and, and talking about the origins of, uh, delay pay and also your involvement, the progress of the business thus far. And obviously the market opportunity ahead within the different verticals and looking forward to catching up again. Speaker 2: Thanks, mate. You're doing a wonderful thing. Keep it up. Cheers.