- Millennial super fund Spaceship has been in secret talks with banking regulator for its own licence.
- Investors have backed the licensing application with a $50 million capital raising round.
- One new investor, a US venture capital firm, has former Australian prime minister Julia Gillard on the board.
Millennial online superannuation fund Spaceship has completed a $50 million capital raising round, while waiting for a rare Australian Prudential Regulation Authority (APRA) licence.
Spaceship and other startup pension funds, like Grow Super, Zuper and Mobi Super, typically pay to use the licence of a traditional company to operate. Spaceship itself changed its parent licence holder over the winter, switching from Grosvenor Pirrie Management to Enva Australia.
Business Insider can reveal Spaceship, which has been criticised for its high fees since its launch a year ago, has been speaking with APRA since July about a direct licence to run a super fund.
A source said that the registrable superannuation entity (RSE) licence application was then submitted on August 25, and the licence would be issued "very soon", allowing Spaceship "full control" of its products, including cutting fees.
APRA only has about 200 licences active, according to the source, and a new "greenfield" licence has not been granted for "years".
Business Insider has contacted APRA for comment.
Julia Gillard jumps on to new $50 million capital raising round
Spaceship has also closed a new $50 million capital raising round, which was oversubscribed to the point of $66.5 million in investor commitments. This adds to the $19.5 million raised in June, taking the combined $69.5 million past PEXA's $64.7 million to make it the highest capital raise in Australian tech this year.
The new cash, which takes the valuation of the startup to $170 million, would provide "full resilience to the Spaceship balance sheet" ahead of the new direct superannuation licence, according to the source.
While most of the new round was supported up by existing backers, the AFR reported $8 million came from its only new investor, Amplo. The US venture capital firm lists former Australian prime minister Julia Gillard as a "board partner".
$150 million under management
Spaceship's funds under management has grown to $150 million, up from the $100 million claimed six months ago. Business Insider understands that pot is growing at a rate of $1 million per day.
Spaceship first hit the headlines in September last year after Atlassian boss Mike Cannon-Brookes declared he would put his own retirement savings into it, calling it a "game changer". His investment vehicle Grok Ventures had contributed to the startup’s $1.6 million seed round.
In response to criticisms about high fees, last month the startup revamped its catalogue to slash the fee from 1.6% to 0.99% and increase its technology component from 30% to 50%. A new lower cost index fund was also launched, which charges just 0.65% and tracks the MSCI global index.
Spaceship chief executive Paul Bennetts told Business Insider at the time that cutting fees was a difficult task.
"Within superannuation there’s a thing called ORFR [operational risk financial requirement levy], which is a regulatory piece of capital you need – 25 basis points," he said.
"The discretionary wealth players, the Stockspots of the world… Those guys are charging 95 to 100 basis points for effectively a very similar product to our 65 basis-point product."
Bennetts took over as chief late last year from co-founder Andrew Sellen, who is no longer involved with the company. The other co-founder, Dave Kuhn, departed in February.