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Banking startup ChimpChange readies for AU$15m ASX float

Californian-based ChimpChange is bringing its digital banking platform to Australia as a stepping stone for taking on the technology giants listed on the Nasdaq.

Eight days out from its initial public offering (IPO), digital banking platform ChimpChange is hoping to finalise its AU$15 million capital raising before securing its spot on the Australian Securities Exchange (ASX).

Based in Hollywood, ChimpChange is a banking platform that offers users a daily transactional bank account with no monthly fees or overdraft fees, which according to company founder and CEO Ashley Shilkin, is a rarity in the United States.

"Over here there are some surprising nuances that can give us a competitive advantage over some of the bigger banks; over here there's a very high threshold to qualify for a free bank account, so the simple fact that we don't have any monthly fees or overdraft fees already makes us really appealing to a massive number of people who are paying high monthly fees and a whole lot in terms of overdraft fees," Shilkin told ZDNet.

According to Australian-born Shilkin, the ChimpChange platform expands on a standard transaction account and includes a handful of additional features such as spending and budgeting tools, Snapchat-like images or videos to accompany money transfers, cash-back locators, and photographic cheque depositing with instant clearing, which he said is the most requested feature from customers.

ChimpChange has partnered with Mastercard to allow customers to use their bank account everywhere Mastercard is accepted and ChimpChange customers can also use retail locations in the US as bank branches to make deposits, with 7/11, Walmart, Kmart, Walgreens, and CVS allowing customers to deposit money into their ChimpChange account.

"[The ChimpChange platform is] kind of like a bank account on steroids whereby it's going to give you all of the stuff you can do with Westpac and NAB, but then it's going to help you by managing your money better and getting smarter about money management and our communication is very unlike a bank," he said.

Applying for a ChimpChange account is 100 percent digital, with the company performing Know Your Customer (KYC) electronic verification on those applying for an account via a smartphone app, which is essentially the same thing as the 100 point identification check Australian organisations employ for verification.

As customers are required to have a United States Social Security Number and a local address to pass the approval stage, the ChimpChange platform is not available in Australia.

As an Australian expat, Shilkin said listing on the ASX made perfect sense, having spent most of his career in the country, and said the networks he has built in Australia are invaluable. He added that it is a lot easier to list in Australia as a small company.

"You really need to be a lot bigger than we are to list on the Nasdaq and it's a whole lot more expensive," he said. "When we achieve what we think we can achieve, it's quite possible we would seek a dual listing, but the starting point is the Aussie market."

Additionally, Shikin believes the ASX has proven itself to have "quite an appetite" to support early stage technology ventures.

"I feel that the ASX is embracing us in a similar sort of way that it embraces early stage mining exploration companies and we're lacking in Australia the traditional VC market which is clearly available over here -- so it feels like the ASX has become effectively our venture exchange."

Shilkin found himself in California after having little success knocking on the doors of banks in Australia.

"At that point in time, banks thought they were just going to do this themselves and so they didn't need to partner with anybody and also due to my lack of progress -- I was just a guy with a business plan -- I wasn't getting any traction with Australian banks," he said.

"At the same time I had been doing some travel over in the US and looking at some of the fundamental differences to the Australian banking landscape and saw how much higher the fee environment is here, just generally for all the wonderful things about the US banking is one area that there hasn't been the progress that we've seen even in Australia and Europe.

"It made sense for me to jump on a plane, do some couch surfing with friends around the US and see if I could find partners that I needed to bring this to life. Low and behold I found a banking partner and a processing partner which allowed me to build a company over here."

In the future, Shilkin hopes ChimpChange will be available in Australia, with the IPO giving the company the additional transparency, audit, and corporate governance that Shilkin said partners prefer to see.

ChimpChange is expected to float on June 30, 2016.

Another US company is also about to make its ASX debut this week: Virginia-based drone detection company DroneShield on Wednesday with a market capitalisation of AU$27 million.

In May, the company offered 35 million new shares at an issue price of AU$0.20 per share to raise AU$7 million, which has been successfully completed.

Based in Delaware, DroneShield owns the intellectual property rights to, and sells, enterprise-grade sensors and a proprietary database of audio signatures.

The company's system detects acoustic signatures of unmanned aerial vehicles -- or drones -- which are analysed by a signature database, and then issues an alert on an approaching drone.