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The Amazing Story of Lendi Group.

September 14, 2023 · Hosted by Dexter Cousins

Lendi Group Co-founders David Hyman and Sebastian Watkins join Dexter Cousins for this special episode of Fintech Chatter Podcast.

Celebrating the 10 year anniversary of Lendi, David and Sebastian share their incredible journey of meeting after Uni and becoming serial entrepreneurs.

David and Sebastian are two of the smartest, humblest and likeable Fintech founders you will ever meet! They intentionally keep a low profile so we are delighted to bring you this exclusive interview and glimpse into their amazing journey together.

“If Product is King. Distribution is God”

David Hyman – Lendi Group

Lendi Group is Australia’s fifth largest distributor of mortgages and processes an astonishing $30bn of home loans each year!

From meeting each other in their first job out of uni, borrowing money from their parents to start their first business together, to a successful exit with Living Social and then taking on Australia’s Big 4 Banks in the housing market, David and Sebastian share their remarkable journey together.

Make sure to tune in as David and Sebastian share their insights and tips on bootstrapping, raising capital and blitz scaling!

You can find out more about Lendi – https://lendigroup.com.au/

What happened next.

This episode was recorded in September 2023 for Lendi’s tenth anniversary. David Hyman stepped down as CEO of Lendi Group in January 2026. By then it was Australia’s largest non-bank mortgage platform, with a $107 billion loan book, 5 million customers and $350 million in annual revenue. Within weeks he was building Mono AI, which helps established companies become AI native, and he talked it through on his fourth appearance on Fintech Chatter.

Links from this episode.

Lendi on Fintech Chatter.

More on home loans.

Full transcript.

Lightly edited for readability — filler words removed, wording otherwise unchanged.

Dexter Cousins
Welcome to Fintech Chatter, presented by Tier One People, leaders in fintech executive search. Follow us on your favourite podcast player, or Fintech Chatter TV on YouTube.

Hello and welcome to Fintech Chatter, the show for everything fintech Down Under. I’m your host, Dexter Cousins, and today I’m joined by two really special guests, Sebastian Watkins and David Hyman from Lendi Group. Bass, David, welcome to Fintech Chatter.

David Hyman
Thank you for having us.

Sebastian Watkins
Yeah, thanks, Dex. It’s great to be here.

Dexter Cousins
David, this isn’t your first time. I think this is the third time you’ve been on the show. But it’s your debut, Bass. I’ve seen you on TV so much, though, you’ll be an absolute natural.

Sebastian Watkins
More at home on the couch.

Dexter Cousins
You’ll be ducking into my seat and asking the questions.

Sebastian Watkins
It was me. Dave went away for 3 weeks, and it was meant to just be a little bit of leave cover, but he seems to have passed the baton over on that one.

Dexter Cousins
You’re doing just a fantastic job. I think you’re a natural. If the sych thing ever doesn’t work out, you know where to go: full time on the couch with Carl.

I say special, and the reason why this is a special recording for me is that I’ve been around the fintech scene since 2013, which was coincidentally the birth of Lendi as well, and it’s just been incredible to watch the journey. So first of all, it’s great to have you on the show for that reason. But also, we get so much feedback from people that now, three, four years into the show, this has become almost an archive for Australian fintech, and how and how not to do things. So it’s going to be fantastic to get your insights. But before we go into all of that, if anybody isn’t aware of Lendi Group, can you perhaps tell us a little bit about who you are and what you do?

Sebastian Watkins
Yeah, sure. So Lendi Group comprises three brands: we have the Lendi brand, the Aussie brand and the Domain brand. And what we are is mortgage brokers. We’re effectively the fifth largest retail distributor of mortgages, behind the big four banks. Each of our brands has a different proposition, but ultimately it’s a digitally led experience for our consumers, and we’re product-led sales.

Dexter Cousins
And who are your customers, Dave?

David Hyman
We’re really representative of the Australian market. As Bass was saying, we’ve got really principally two brands, Lendi and Aussie Home Loans. They both target slightly different customers. Lendi’s acquisition channels are purely online acquisition channels. We obviously do a bunch of TV sponsorships, all that sort of stuff. But when we look at our distribution of customers, it’s very much representative of the Australian population. There is a misnomer: it’s not just millennials. We actually represent really, really well in the 40 to 50 age group. And I think by volume, if we look at both the Lendi and Aussie brands, we’re six, coming up on 7% of the entire mortgage market. So you get a really good distribution across that, in terms of purchase transactions, refinance, construction, et cetera. Basically anything that you can think about in Australia as it relates to home loans, we play in that space.

Dexter Cousins
So to put that percentage into context, that would be the biggest outside of the big four banks in Australia?

David Hyman
Yeah. The closest big four bank to us would be about 11% market share. So we’re not there yet, but we’re hot on their heels.

Dexter Cousins
Fantastic. So in terms of the size of the business now, how big is Lendi in terms of people, revenue, those types of figures that we all get excited about in fintech?

David Hyman
Look, on the people side, we’ve been really fortunate to have grown a really solid team over the last decade. As you said before, Lendi started in 2013. We’ve got around a thousand employees in the business, and that’s everything from… we’re a distributed workforce, around Australia and the Philippines principally. We’ve got a head office in Sydney, offices in every major capital city, and also a big operations centre in Mardi in the Philippines. In addition to that, as Bass was describing before, across all of our brands we’ve got roughly 1,400 brokers operating in the Aussie brand, and circa 230 stores around Australia as well. So from a people perspective it’s a reasonably large operation. By the numbers, I talked about the market share before: we settle well over $30 billion worth of loans every year, we’ve got about a hundred billion dollar loan book, and revenues in the hundreds of millions of dollars.

Dexter Cousins
Wow. Looking back at this last decade, I want to actually go before that. One of the things that really strikes me about Australia, being a Brit and an adopted Aussie, is that there seems to be such a strong entrepreneurial spirit in the DNA of this nation. How did you both become entrepreneurs?

Sebastian Watkins
That’s a great question. Dave and I both worked at the same company together, our first job out of uni. It was a large, distributed sales slbo type business that had a number of blue chip clients in Australia. I think we both landed there out of uni thinking this was a stopgap towards finding our careers. I think Dave was wanting to go into investment banking, and I thought I’d be a property developer. Neither of those quite… I think we both knew people there, and it was a good way to make some money while you were looking for that first foot in the door in your long-term career trajectory. So we met there, and we were both quite successful, and we were awarded relatively senior roles relatively quickly, and we were lucky enough to learn a lot about that business and the ins and outs of growing teams and managing teams.

And we got to the point in our early 20s where we both said, well, we should probably be doing this for ourselves. So I think at 22, 23 we left that job and borrowed $75,000 off our parents each. We were able to go and secure a contract with one of the large telcos, and we set up our first business in s Hills and recruited 10 or 15 staff. It probably would have been an OH&S nightmare, if I’m being honest. I think we were sitting on the boxes that the chairs came in for the first couple of months. This is bootstrapping, right? So we said, well, we can’t beat you the luxury of a chair just yet. We gave our staff the chairs, and we had the boxes that the chairs came in, and that was our chair for the first while. And I think we managed to convince the landlord at the time, it was a commercial terrace in s Hills, to let us pay the bond in instalments over the first few months.

Dexter Cousins
Now that’s a fintech idea, right?

David Hyman
Exactly. But I think even before that… one of the things we originally connected over was that the business we met in had a very entrepreneurial spirit. But I think Bass had just moved to Sydney, and one of the things we first connected over was just that innate entrepreneurial drive that I think you’re referring to. I grew up in a reasonably middle-class family. Both parents were small business owners, and I always saw that. My parents wouldn’t describe it like this, but that hustle that small business owners have. And I remember you talking about your t-shirt business when you were a kid.

Sebastian Watkins
Yeah, that’s true. I skipped a step there. My first official business, I was in grade six at school. My parents were small business owners as well; they had a garment manufacturing business. And I had made a school who could draw these amazing pictures, and we got together and created a t-shirt company, and we were selling it to all the kids in school. And we tried to go outside of that. I was pitching the local sports store at, I don’t know, 11, maybe. I didn’t get any success there. We had more success in the playground than we did in the real world. But I guess, as Dave said, that comes from growing up with parents in small business.

Dexter Cousins
There’s a whole podcast in how you dealt with failure, right?

David Hyman
Actually, my first business was, at the time I didn’t describe it like this, a drop shipping business for computer hardware, when I was about U6 or U7 as well. I remember actually cold calling the supplier, and I had to put my dad on the phone because I was too young to open up the account. And you learn… maybe you sell a few thousand bucks worth of stuff, and you just learn everything: everything from establishing a company, to how do you find customers, to the operations of stock going from one location in a country to another. And I think for me that’s just always been in my DNA.

Dexter Cousins
Yeah. What was that first business, then, that you built together?

Sebastian Watkins
Well, we had a contract with the telco, and at the time that telco offered what was called a dealer licence. So as a dealer of that telco, you were essentially authorised to sell their suite of products, and it was mainly business products: mobile phones, fixed line contracts, and at the time phone systems, when they were a thing. And again, it was really bootstrapping. Dave and I were running the teams, hiring the staff, negotiating agreements with the telcos, doing payroll off spreadsheets and Excel at the time. And then the day would finish, and we’d sit in our little office that was not really an office, it was like a storeroom, a stock room, and for all the orders for the day we had a label printer and we had all the phones in stock, and the Australian Air Express guy would come at 6:00, and we had to get everything out and ready to go by 6:00: phones all bagged and tagged, ready to go. Start all over again the next day.

David Hyman
But we rolled from there, and one thing led to another. That industry changed up a little bit, and that business, in a very short period of time, was very successful. We got to hundreds of thousands of dollars a month in revenue in about six months. We paid our dads back and all that sort of stuff very, very quickly, and we were looking at what was next. And we saw this daily deals craze starting around the world. Groupon was going nuts in the US, and we looked at that and went, well, we know a thing or two around sales and distribution, we should have a go at this. And we started unpacking the business model and realised pretty quickly that there were a couple of things that we didn’t really know very well. We didn’t really know how to acquire customers online, and that was key to that business model. I had a sort of technical background, but we’d never built software before. So we knew we had a gap there.

And we shifted our focus to saying, okay, who’s doing this in Australia? And it was one of those serendipitous moments where, at that very time, there were three companies that we knew were in the startup phase, literally in their first few months. None of them had launched. We cold called one of them and managed to meet the founders, I think the next day. And over the course of 5 to 7 days… I still remember walking out of their office the first day, and we went, oh, that was nice, we met them, but too bad, it won’t work out, because we just had our heads set in a different mindset. But in the course of about a week, we’d effectively folded our whole business into theirs.

It was a little business called JumpOnIt at the time. They had just launched, and they were just about to land their first, I think, $5 million investment. They’d just been over to Chicago seeing Groupon and Washington DC seeing LivingSocial, and they managed to get an auction happening between those guys, and LivingSocial, I think, invested 5 million bucks for a third of the business, and there was a put-call over the rest of the business. So we folded our business in, and we were part of this little team. There were probably a core team of six or eight of us, fresh with funding, with this great concept that was blowing up around the world. And I think over the course of 12 months we hired 350 people. We opened 30 or 40 markets around Australia and New Zealand, hyper-local markets around Sydney, three verticals: travel, products and experiences. And we just learned more lessons than we could have ever imagined in such a short, compressed period of time. The guys ended up selling to LivingSocial for hundreds of millions of dollars. It was one of the early Australian startup success stories, actually. An absolutely amazing time in both of our lives.

And coming from that bootstrap world, we were picking up some new skills. We got to 3 million customers in an 18-month period, in terms of the online audience building, tech and evolving tech in product, and email marketing. Email marketing was a big thing back then. While email marketing isn’t as strong as it was, there’s a lot of disciplines that you learn there that exist today in our business.

Sebastian Watkins
I think, reflecting back on lessons that you learn: when we looked at that first business, we were in our early 20s, and we only knew how to grow with the money we made. The concept of taking on investment, venture capital, et cetera, was obviously something that we knew about, but not something that we understood. And I guess the other lesson there is it was probably our first pivot, right? As Dave said, some things happened. The telco that we were working with was moving away from the dealer licence and going to retail and stores, and so we were offered the opportunity to get into the retail space. And it was that moment, as entrepreneurs and in our first business, that you go: is it time to pivot? Are we on the right path here? Do we want to be going down this path? And the answer to that was no. We very nearly bought a bunch of these stores and business centres down in the Southern Highlands and moved our families down there. Sliding doors moment.

So as a young… we would have been still early 20s then, 24 maybe. It’s that decision: do you pivot, or do you stay the course? And that was a big decision. We’d invested a lot of time and effort, we had a big team, we had good relationships with our team and vendors, and to pack all that in and move it into a completely different vertical wasn’t an easy decision. But with the benefit of hindsight, it was absolutely the right decision, and it helped us on the trajectory that we ultimately ended up on today.

Dexter Cousins
So how did Lendi come about?

David Hyman
Great question. So we came out of LivingSocial. The founders exited late 2011, early 2012, and again we had one of those moments where we had a decision to make: do we stick around, now that this is wholly owned by LivingSocial US, and there was a really good opportunity for us there, or do we take our lessons and move into something else? We had the luxury of… we spent 2012, really… we got together with another guy, Marty, who’s one of the other founders of Lendi, and the three of us spent 2012 basically looking at: hey, we’ve got all these interesting skills, we’ve got very, very big ambitions, where can we apply them? And we basically built what you’d probably best describe as minimally viable businesses. So not a PowerPoint presentation. We actually went, hey, what are these ideas we’ve got? And we actually built out the actual operating business as a way to test our hypotheses.

We could probably do a whole podcast episode on that whole year, but the short story is we had three or four ideas. One was in the automotive space, and there’s actually a bunch of models that have come out since that validated that idea. We actually built the technology, we built distribution, and we actually had a term sheet from someone to invest in that business. There was something there in the automotive space. There was something there on the e-commerce side, and again, similarly, we took what we’d learned at LivingSocial, our understanding of product distribution around the world, online distribution of those products, how to find trends and attach yourself to those trends and spin up brands really quickly, and there was a whole model around that. Again, we had some really prominent e-commerce entrepreneurs put a term sheet to us to invest in that business as well.

And then there were a few others, but really, primarily, the other one was what ultimately became Lendi. We got to late 2012, and it was crystal clear that there was this massive opportunity in home loans. At the time, 300-odd billion dollars’ worth of annual transaction volume, 1.4, 1.5 trillion of outstanding loans, 13,000 mortgage brokers at the time, but very, very fragmented. We talked before about our market share: the biggest market share for a retail brand at the time would have been 2 or 3%. So an incredibly long tail, and everything was offline. We came from this world where, in 2009, at LivingSocial, we were doing DocuSigned contracts with every customer we signed up over the phone, and these deals were happening over the phone. You then moved to the mortgage space, and you’ve got banks wanting faxed applications and physical IDs. And we just went, you put these things together… We’d seen the velocity you can drive from a really good digital process, and said there’s got to be something here. And with the traction we got in that business, even though we literally had term sheets for the other ones, we just said, we’ve got to go all in on this thing.

Sebastian Watkins
Yeah. And there was also just that you have to be passionate about the industry. The automotive industry is a great industry, but we were at the wholesaling end. Our idea was, sorry, wholesaling cars. And when we looked at what the mortgage industry was giving consumers, which is a path to financial freedom, owning your home, it’s a really great and very rewarding industry. For me and Dave, that was a big tick in that box, especially when you’re committing as a founder to, ideally, decades’ worth of blood, sweat and tears. You’ve got to feel really good about what you’re doing, and you’ve got to love the industry that you’re in. The other industries were exciting, and there was a big prize there, but this one just felt like a much more rewarding industry.

Dexter Cousins
And so was it back to sitting on the boxes of the chairs?

Sebastian Watkins
Well, it wasn’t far off that. We were fortunate to have done quite well out of LivingSocial, but we saw some upside in the exit, and that was all in scrip. Again, lesson learned there: maybe try and take some cash and scrip. But look, at the time we personally had six to 9 to 12 months’ worth of money saved up, and we were ready to go. But we actually went back to the CEO of the company that we had met at, who we’d worked for many years prior. And we had this great pitch deck. We’d proved it up, as Dave said, business in a box. We’d started acquiring customers, we got our licences ourselves, we were bringing on customers and working out how to actually write these loans, what was the process, what was the documentation. So we were starting to get runs on the board.

And we jumped on a plane and flew over to Perth and met him where he lives, and said, we’ve got this great idea, and we’ve got this 15-page presentation. And he said, okay, let’s… and we went to get the presentation out, and he said, no, no, no, I don’t need to see the presentation. We’ve worked together, I know what you guys are capable of. What’s the idea? We told him the idea, and he said, yep, I’m in. That was our first investment. It was about a million dollars, and we thought that we would never have to raise another round again.

But we were obviously very happy with that. We set up the team in Sydney. We had a very small team. We were over at Fishburners, actually, when we first started, in a little office out the back there, and away we went. So it wasn’t far off the cardboard boxes, but it was a little bit more.

David Hyman
But it was actually a really interesting time. Just remembering: at Fishburners at the time, the company that was sitting next to us was Airbnb, and across the road was Uber. It was almost the cauldron of early-stage startups in Australia, because there wasn’t anywhere else. There were no Stone & Chalks. There wasn’t even the concept of co-working spaces in Australia. And it was really interesting… you talked before about the first and last million dollars we’d ever need to raise. We’ve obviously gone on to raise a whole bunch of capital since then, from everyone: high net worths, strategics, institutional investors and all that sort of stuff. But in those first few years, it was a really, really nascent industry. I remember going through, in 2014, we raised our first external round, and we ended up having to find people that understood investing in small cap mining businesses on the ASX, and convincing them that investing in a tech startup was kind of similar: you’ve got this idea, and we’re going to develop that idea, and then over time it’ll reap rewards. We had to use that mining analogy in a lot of ways to convince people to invest in these businesses, because the VC industry didn’t really exist, and startups were this thing that happened in Silicon Valley, not in Sydney.

Dexter Cousins
Yeah. So I want to fast forward. I actually remember being given a tour of the Lendi offices around about 2016, when I think you were on Pitt Street.

David Hyman
Yeah.

Dexter Cousins
And I was really blown away by the energy. What has really struck me about that nascent period that you talked about, David, was that the businesses that came out of that period, yourselves, Prosper real on R preneurial, were what I would say are sales-focused businesses. And I think we lost sight of that when we started to see huge amounts of capital flowing into the fintech space, and you didn’t have to convince people that, hey, this is just like mining. What’s been your observation as to the right type of business, the right type of approach, to be successful here in Oz?

David Hyman
I don’t think there’s any one right way to do things, but what we can probably reflect on is how we’ve thought about that over time, and how we’ve evolved that over time. If we go back all the way to the start of our business, we almost started at the sales end of the spectrum and evolved the product capabilities over time. And the way we epitomise that, or describe that, in the business today, we actually call it product-led sales. We think about our product as being the thing that we build and evolve, and our customers being borrowers, brokers or banks, and we have different perspectives on what our product looks like for each of those customers. But the product-led sales piece is really the key. You can have the best product in the world, but if you have no distribution, it actually means nothing. It’s worthless. And so we’ve really tried to make sure that, as the business has grown and evolved, we haven’t lost that thing that made us so successful when we started and has been there over time.

People have asked us all the time: why couldn’t someone come out and build a copy of your platform? And the answer is they absolutely can, with enough time and capital. We work in an industry that’s got a reasonably well understood domain. If you’ve worked in a bank or as a broker, you understand how a mortgage is manufactured, how credit is processed, et cetera. But fundamentally, when we think about what’s been our secret sauce, it’s been actually combining those two things together, and building what I think you described as the business architecture that brings product-led sales together. Ultimately you’ve got to have a great product and experience for your customer, but you’ve got to have a great experience and a sales-led process around that, to pull the customers in and push them through the process.

Sebastian Watkins
Yeah. I mean, we obviously see lots of great ideas, and there have been some people that have built businesses very similar to ours that aren’t here today. And when I look at those, I just think there is a lack of understanding, or I guess respect, for just how tricky that funnel is: acquiring a customer and managing that from acquisition through to settlement, and then the life cycle of that customer beyond that. If you asked most people in our business today, certainly in what we call our experience org, which houses technology and product, and our distribution businesses, most people would be happy to tell you what the conversion was from on-page conversion through to acquisition, through to lodgement, through to first contact, through to assessment, through to unconditional, through to settlement; where the drop-off points are, why they’re dropping off there, and what we’re doing about that. That obsession about the funnel, and the understanding of what drives it and how we pull customers through that funnel in a way that is an enhanced experience for them, is, I think, what has ultimately helped us get to where we are today.

Dexter Cousins
Yeah, it’s funny you mention that, because I remember having conversations with some of the neobanks at the time about this very thing, cost of acquisition. Their view was… they were talking about cost of acquisition for somebody to download an app, but their business model, and what they were basing success on, was home loans. Well, that’s a completely different cost of acquisition to somebody downloading an app. And it’s strange, right? You would assume, or we make assumptions, that people going out and starting businesses fundamentally understand what it is that they’re building. And we’ve seen this confusion: a digital bank is not a tech business. A tech business can bootstrap and get a product out and generate revenue within weeks, days now, right? A digital bank, you’ve got to invest $200 million and spend four years before you put on a…

David Hyman
A first customer. And then you look at the credit spectrums they play in, and then you try and find customers that fit that credit spectrum, which is the exact customer everyone else is looking for, and you’re paying at the very thin size of the wedge, at the most expensive end of the spectrum. So it becomes really expensive to find customers.

Dexter Cousins
Do you think there’s almost a stigma around identifying yourself as a sales business?

David Hyman
Probably. Although I think we’ve got the right… if I go back five years, I think we were more sales than product, and if I look at today, we are genuinely product-led sales. We talk about that to the organisation, and hopefully everyone in the business understands what we mean when we say that. I think historically there definitely has been. But again, one-liners are often clichés, but clichés for a reason. One of the guys in our exec team says: if product is king, then distribution is God. You can have the best product in the world, but if people aren’t using it, it means nothing.

Dexter Cousins
Do you feel you had to earn the right to become product-led, then? That you had to be that sales-led organisation to earn the right to be product-led?

David Hyman
It was almost… going back to the conversation around the VC world in 2013, we almost had to have the runs on the board. The approach we took with capital raising, when we realised that we needed more capital than the first million bucks, and we realised that pretty quickly, which was a combination of both aspiration and the reality that you start to see when you start to build a business: we didn’t want to be hugely diluted up front. We never went into a big $40 or $50 million round. The first round was a million bucks, the second round was two million bucks, the third round was five million bucks, and we did another four million bucks. And what we basically did there is we came back every year and went to the same and different groups of investors and said: literally, here’s our pitch deck from last year, here’s our 12 months’ performance, here’s where we went well, here’s the things we got wrong, but here’s what we’re shifting and evolving. And we were able to constantly step up our valuation, but also take small licks of capital along the way, from different pools of capital. And I think you can only do that if you’ve got the runs on the board along the way. Whereas… you hear the concept of network effects, and we’ve definitely got network effects happening in our business, but you can’t build a business plan on that, because these things happen organically and you don’t know at what moment they’ll happen.

Dexter Cousins
So I want to talk about the investment piece, because one of your most notable early investors was Macquarie, and at the time that happened, it was like: fintech good, bank bad. What was your thinking behind getting Macquarie as an investor?

David Hyman
Yeah, look, that was really interesting. We actually had a VC fund and Macquarie with almost identical term sheets in terms of quantum, terms, price, et cetera, so we genuinely had a side-by-side comparison to make. And the journey we were on at the time… I mentioned the old machine issue before, but this was around September 2014, so it’s actually almost 9 years ago to the day. We had really solid traction. If I remember correctly, we were about to hit 100 mil a month of lodgements, and for context, we do about four billion now. So we were about to hit about 100 mil a month when Macquarie invested. We were growing fast; by definition, 18 months in, we were growing at incredibly fast triple-digit percentage growth rates. But we were really struggling to get banks to change their processes to become digital. To take an application for a home loan, across every single bank on our panel, you had to have a wet signature to submit that loan. You needed to meet the customer in person. There were a bunch of other things. And we really wanted to break through those glass ceilings.

So the approach with Macquarie was actually two things. It was an investment on one hand, but we also launched a white label product called Click Loans with Macquarie, and Click Loans was really the first digital mortgage. We really focused on digital from first customer contact to unconditional approval. We said, we don’t need to digitise everything, let’s try and take the pain points out of the process. And we effectively launched that with Macquarie in the middle of 2015. Their investment was, I think, September ’14, and we launched the product in June ’15, and we got that breakthrough growth we wanted. We doubled the efficiency of our brokers, we halved our CAC, all the things we wanted to do. And going back to your question: bringing Macquarie on wasn’t just capital. It was actually helping us drive the thesis we had behind the business forward. It was really that partnership, and they’ve been an amazing partner since. The relationship’s evolved well beyond where it was there. They’re now a very good distribution partner on one hand, and they’ve been great investors along the way as well. But fundamentally, that decision at the time, over pure capital, was about the massive strategic benefit we were going to get.

Dexter Cousins
So I’m going to leapfrog the ANZ partnership and investment, and fast forward to CBA and the Aussie merger. Bass, you’re the ops guy. How much did your world change in the space of, like, 24…

Sebastian Watkins
It was a lot.

David Hyman
I think he’s still getting over it.

Sebastian Watkins
Look, Aussie is such a great business. It’s a 30-year-old business, and it has, as Dave said, 1,200 incredible brokers who are incredibly deeply rooted in their communities. A huge opportunity, but it just didn’t really have a digital strategy. Now, Aussie isn’t really ready for pure digital, but there are more and more customers coming to Aussie, and we’ve seen this since we launched the platform into the Aussie world, that want both. So they want to start the journey online and finish in a retail store, or start in a store and finish online. So that was the opportunity. But look, with that came 230 stores that ultimately did things 230 different ways, and 500-ish mobile brokers who did things their own way, and some of these brokers have been doing things for 20 years. So the challenge is to find a uniform approach, in a way that tries to preserve the things that are great about Aussie, and keep an eye to the future. And that triangulation has been tricky. Admittedly, some things have gone really well, better than expected, and there are others that we’ve had to take a second or third pass at. But what I would say is that it’s a great group of people who have decades of experience, and what we’re trying to work through now is how do we future-proof the next decade for that brand, and how do we ensure that that brand doesn’t end up with its own Kodak moment, which I fear it probably would have been on, had there not been an eye to the future.

David Hyman
Yeah. And I think, building on some of those points a little bit: we had a really interesting 2020, like most people. Obviously the pandemic was the main theme of the year, but Lendi was actually, and this is all in the media, so unfortunately not a scoop for you on this one, Dex, very close to an IPO in 2020. We started the year, and COVID was clearly a tailwind for us, not a headwind, and our growth accelerated. We used to joke a little bit, but it’s kind of true: our business was built for COVID. We were able to deal with customers all around the country, when everyone else was working out, what’s this digital signature thing, how does that work? So we had this really interesting year where, on one hand, we were preparing for an IPO. We literally had the book basically built. We had investment banks working with us, we’d gone through the due diligence committees with our board and all that sort of stuff. And at the same time, we were working with CBA on this Aussie opportunity.

As Bass was saying, Aussie was the original disruptor in the space, a 30-year-old brand. Going back to when we started the business, we genuinely had conversations with potential investors and others who said, surely you don’t want to compete with Aussie Home Loans? So it was really, again, to use the phrase I used before, a sliding doors moment, where we had to look at: do we go and list the Lendi business, with all that comes with that, positives and negatives, liquidity for our early shareholders, but being a listed business, the publicity, customer benefit, et cetera? Or do we take advantage of this opportunity ahead of us, where we’ve built this platform that is truly market-leading, and there’s an opportunity to go and retrofit, which is probably the wrong way to describe it, but take this 30-year-old brand, which has done so many things best in breed, and is very, very trusted. I think the thing that really blew us away the most, and it wasn’t because we had expectations otherwise, we just didn’t know what to expect, is that the people in the Aussie business have just been absolutely amazing. There are some franchisees that we now call friends, brokers that we now call friends, because they’re in this, and they’re small business owners, they’re entrepreneurs themselves. So that DNA that we talked about at the beginning, with your parents, there’s a kind of empathy connection there.

Sebastian Watkins
Well, the big aha moment was that you’ve got, in the retail stores, on the franchise side of the business, 230-odd stores, but you’ve got 230 small business owners that are so motivated to make it work, and so aligned in economic and financial success, and they care deeply about their customers. And look, all of our people do, right? All of our managers do. But it’s just a different dynamic to employing a manager, for want of a better word. And so there’s this massive cohort of people that are small business owners within the bigger business, if that makes sense. And that, for us, was really interesting. As we’re tapping into that, and helping support them and helping them unlock what that next horizon looks like, we’ve got 230 incredibly invested participants in that journey, physically and mentally invested.

David Hyman
As we thought about bringing the two businesses together… because while it was an acquisition of Aussie Home Loans, we’ve treated it like a merger of two businesses. And as we’ve thought about how we bring the two businesses together, not just our team but also the brokers, we’ve effectively reimagined and redescribed our culture, everything from the vision and mission to values and principles. We have 10 principles, but one is “I am because we are”. It’s the old African proverb, Ubuntu. And it’s completely embodied in the way the franchisees operate, because it’s not this head office to franchisee relationship. And Bass talks about this all the time: if they’re successful, we’re successful; if they’re struggling, we’re struggling. It’s complete symbiosis.

Dexter Cousins
I’ve got to say, I’ve worked with you guys for a few years now. I work with a lot of businesses, I meet a lot of founders, I’ve been doing this 25 years, and I say this to a lot of people, but Lendi’s the best client I have worked with.

David Hyman
Go back the other podcast.

Dexter Cousins
But it’s for that reason, right? It’s because we’ve had challenges, and how you respond in those challenges, in those moments, is just level. There’s no shift in the reaction or the emotion. So those values that you talk about are lived from the top down. There’s a saying, which is that an organisation’s culture is driven by the worst behaviour the chief exec tolerates, and I see that play out, for good and bad, in a lot of organisations.

Sebastian Watkins
Yeah. We like to say at times that the standard you walk by is the standard you accept, right? But if you don’t have a framework, or you can’t point to why that shouldn’t be accepted, then that’s where the problems start. So, as Dave said, we have recently launched a new set of values and principles as we’ve brought the business together, and like anything, they need to be lived and breathed and talked into existence. These things take time, and they start to create their own meaning within the business. But at the end of the day, without that, people don’t have that framework to operate within, right?

Dexter Cousins
So we touched on this a little bit earlier, and I think you talked about the journey that founders go on. If you look at Uber as a good example: the founder, one minute he’s in a bedroom building an app, and five years later he’s the chief executive of a 40,000-person organisation, regulators around the world gunning for him, his board and his investors want him off, and he’s all over the news as a bit of a jerk. And I put myself in that situation and think I’d probably be a jerk as well, right? It’s just so much for an individual to be able to absorb and process and assimilate and evolve as a human being, to go through that journey. You haven’t quite been on something as large as that, but to go from where you were to a thousand people, the journey that you’ve been on this last decade is nonetheless remarkable. How have you kept yourselves so level-headed and retained that DNA, and the people that you were, values-wise and principles-wise, at the beginning of the journey?

David Hyman
I think, as Bass was just describing before, you actually have to… when you’re a startup, your culture, you can look around and see it over your shoulder. The conversations that happen in the business, you almost hear every single one of them. You’re part of every single one of them. And as the business grows, you actually have to get a lot more intentional about it. We’ve probably, in particular over the last two years, been the most intentional about the culture, taking the things that we’re inherently doing and actually trying to codify them, which is probably a cold word to use when you’re talking about culture, but ultimately enshrine them in principles. And actually the act of going through that process challenges you. When you say X, what do you actually mean? And you get a lot more refined. I’ve personally found going through that process both cathartic and quite confirmatory. When we talk about radical transparency, which is one of our principles, what do we mean by that? Is that a licence to be… or is that about being open about things, and where are the boundaries?

Dexter Cousins
That’s a really good point, actually, because I’ve seen so many senior leaders in my career use the word passion to almost absolve themselves of… no, your team thinks you’re a…

Sebastian Watkins
Oh, look, there are certainly times where you need to go and close the door and just take a few deep breaths. Certainly nobody’s perfect, right? We’ve all had those moments, and there have been very stressful moments. For me, on the principles, there’s one that I use a lot, which is just trusting that people are coming from the right intent. People are not trying to do X, Y or Z; it’s actually good intentions that just haven’t manifested in the way that they had hoped. So on the people front, that one of our principles really helps me.

And then the other thing that I had to learn along the way is making a very intentional investment in my balance outside of work. We were very unbalanced in the early days, and I think any founder will tell you that that’s probably part of the recipe for success, or what you’re signing up for. In the early days, as I said before, we were writing loans and working out how to be a broker. We were trying to grow the business, and to make that work, you’d see customers after hours. We ran our exec meetings on Saturday. We worked 14 hours a day, Monday to Friday, and we did an 8-hour day on a Saturday, or six or seven if we were lucky. And my balance was completely out of whack then, but that was par for the course. Over the years, as we’ve grown bigger, I’ve had to really make an effort to find that balance in my family. And this sounds quite clinical as well, but I give everything I have, and I try to work and be a positive leader at the office. I can’t then go home and just sit on the couch and absolve myself of all responsibility because I’m exhausted, which is what I would do at times. And I found that actually approaching it with the mindset of, I need to be giving my all there as well, has yielded a massive reciprocation from my family unit, which then in turn makes me happy. No challenge is harder to overcome, no friction point in your day is harder to overcome, than if you’ve started the day on the wrong foot, you’ve come out the back of your family unit and it’s just not right. So I found that making that investment at home has enabled me to be a better leader and a better person in the office.

David Hyman
I actually heard, just on that topic… and I won’t repeat what Bass said, because we’ve gone through a similar journey, and I’ve definitely got a much better balance than I had two years ago, three years ago, four years ago. I know my wife still wants me to have a better balance, so I’ve still got to go on that journey. But I heard something the other day. It’s not my original one-liner, but it was: you’ve got to live well to work hard. If you think about what that means, it’s actually about putting your life… if you know Maslow’s hierarchy of needs: if you get your sleep and your exercise, you have your relationships and all the things you need for balance, if you get those things right, then you can actually be a great leader, a colleague, whatever your role is, whether you’re leading a business or participating in a business. I think that holds true.

I think in the next evolution of our culture, we’re really trying to help our people go on that journey for themselves, regardless of what role they’re in. We’re trying to define a very intentional culture, one that really rewards flexibility, but hard work as well. It’s not about clocking off at 4:00 every day. It’s about flexing both ways, but giving people the flexibility to build this balance in their life, so that they can come and show up at work, be great colleagues, continue to reach new heights, and have the time to do stuff that’s important to them. And what we’ve found is that that ethos around living well to be able to work hard extends to all of our team, obviously. We’ve found that since we’ve really embraced flex, which means that family units can do school drop-offs in the morning without having to be on the train at 7:15, and can flex in and out of things around their lives as they need to, it has just yielded a much happier employee, a much more productive employee, and I think culturally just this osmosis of respect for the framework.

Dexter Cousins
Well, we’re coming to a wrap.

Sebastian Watkins
Oh, yeah.

Dexter Cousins
We’re running out of time, unfortunately. I could stay here all day. But we’re celebrating the first 10 years of Lendi. What do the next 10 years look like?

Sebastian Watkins
Oh, that’s a good question. Big four, for sure. We’re five at the moment. And look, there’s a lot to do. I think we have all of the building blocks for success. We say this a lot, right, but Australians have a history of rewarding monopolies and duopolies, and we’re typically comfortable trusting one or two variants. Look at property portals, jobs, supermarkets, et cetera. When you look at mortgage distribution, and particularly third-party distribution, about 70% of every mortgage originated in Australia comes from a broker. We have, as Dave said, six and a bit, six and a half, coming up on 7% market share, but then there’s this massive long tail of thousands of brokers that own fragments of that market share. And so the opportunity, as we look forward, is actually to reduce… there’s too much choice for Choice AO. A broker is a choice proposition, but you have Aussie, Lendi, you have my local broker, you have Mortgage Choice, you have Smartline, RateCity, Finder, the list goes on, right? So we think there’s a big opportunity to really put a stake in the ground as that beachhead brand for broking. When customers are thinking about where do I go for a mortgage, you shouldn’t have to Google “cheap home loan rate” or “my local broker”. You just go to Aussie or Lendi. It’s a bit crude, but the analogy I like to give is: if you used to use Flight Centre to book your holidays, you’re probably going into Aussie, and if you use booking.com or Expedia, you’re probably coming to Lendi. And that’s all you really need.

Dexter Cousins
So, awesome. And Dave, from your side?

David Hyman
Oh, look, and again, sorry for the clichés today, but we’re just getting started. When we look at the business today… Bass and I spent the last couple of days just looking at what our big bets are for the next couple of quarters, and how we can help the teams focus around some of those things. We’ve got the luxury of having all the domain knowledge of the business, so we can sit there with a whiteboard and work out size of the prize and all that sort of stuff. We have to prioritise a list of 10 things that could all be worth millions of dollars a month of revenue. The opportunity we have is huge. Bass talked about where we want to go. I think it’s a good problem to have. We’re energised, and I think we’ve got a great team around us. So I’m looking forward to seeing what this conversation holds in a decade’s time.

Dexter Cousins
So, Bass, we get fantastic talent listening to this podcast. If anybody’s listening to this and they want to find out about careers at Lendi, where do they need to go? What’s your mobile number again?

Sebastian Watkins
No, look, Lendi Group is the home page there. We’re obviously always looking for great talent. We’re very fortunate to have some amazing people working with us, and we view all of our relationships with our employees as partnerships. But look, lendigroup.com.au will house all of the jobs across all of our brands.

Dexter Cousins
Fantastic. Well, amazing work over this last 10 years. It has been a joy to watch this and cheer from the sidelines, and I’m sure the next decade’s going to be even bigger.

David Hyman
Thanks for having us.

Sebastian Watkins
Yeah, thanks.

Dexter Cousins
You’re welcome. Brilliant. As always, folks, you can connect with me on LinkedIn and Twitter. If you’re coming back, thanks so much for your support, and if you’re new to the show, make sure to give us a follow on your favourite podcast player and leave a review. It really helps me in booking great guests like David and Bass. Until the next episode, keep well.

Fintech Chatter is produced by Tier One People, leaders in fintech executive search. We’ll find world-class leadership talent to build world-class fintech ventures, and you can find us at tieronepeople.com.

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