Sir Stephen Tindall's K1W1 to back KiwiSaver start-up Simplicity

Sir Stephen Tindall's investment arm K1W1 is supporting KiwiSaver provider Simplicity, set up by Sam Stubbs, through a $1.5m loan.

Sir Stephen Tindall's investment arm K1W1 is to back KiwiSaver start-up Simplicity with a $1.5 million loan, allowing it to repay debt and take a faster growth trajectory.

Sam Stubbs, the managing director of Simplicity, said Tindall would also become the patron of the Simplicity Charitable Trust — the charity which owns the investment manager.

Stubbs said Tindall had been a long-time hero of his and he had been chasing the support of his mentor since Simplicity launched in 2016.

"Stephen is one of our heroes, and there is no finer supporter of what we want to do for ordinary Kiwis. This will allow us to grow faster, and explore providing other services".
Tindall said his values and those of Simplicity were closely aligned.

"We both want a better deal for New Zealanders" he said.

"I'm delighted that we can help Simplicity grow, and that I can personally be involved."
Stubbs said the loan would relieve financial pressure but the company had been cashflow positive since July. Without the loan, the business would have continued to grow but would have done so more slowly, Stubbs said.

"It allows us to do what we want and do it faster."

The loan is interest bearing but Stubbs would not say at what rate or when it would need to be repaid.

"The terms and conditions are not onerous. They are clearly providing support."

Stubbs said Simplicity was now focused on growing its two lines of business — KiwiSaver and its other investment funds.

Despite growing quickly it still only had a small market share which meant there was plenty of room to scale up.

Stubbs said the company needed to get several billion dollars in funds under management before it could expand into other products but it was looking at disrupting other parts of the finance industry including life insurance, mortgages and payday lending.

"It's pretty simple, high margins charged by others are our opportunity," said Stubbs. "And high margins are everywhere in financial services."

He was hopeful of being able to offer Simplicity's investments in the wholesale market soon once the funds had a three-year track record.

The provider has grown quickly and now has more than 22,000 members and $766m in funds under management across its KiwiSaver and other investment funds.

The business has 10 staff as well as 57 volunteers.