Justin Short of Nous Global Markets
For today’s profile I am joined by Justin Short of Nous Global Markets.
Nous Global Markets is a London Fintech/Education/Gaming startup. The popular virtual-trading app “SparkProfit”, released in 2014, has attracted over 370,000 users in 200 countries at an extremely low cost of acquisition. They have just received their first license approval and are looking to launch their second app in Q2 2016.
Our questions are in bold.
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Who are you and what’s your background?
My name is Justin Short, and my passions are both technology and capital markets. Founding Nous felt like the natural next step towards fulfilling my personal belief that financial tools should be accessible and affordable for everyone. Nous’ motto is Free the Markets for that reason.
It’s probably no surprise but I’ve always been a bit of a major geek when it comes to computing. In 1987, when I was 13, I wrote a version of Tetris for my little sister after I saw it in the arcades. I fell in love with coding, so it was only natural to go to Imperial and study Joint Maths with Computer Science, where I learned my craft alongside some of the best in the world today.
Banking has evolved a lot in the twenty years since Imperial and I’ve been lucky enough to be part of that journey working in a number of large international banks. Before taking the plunge with Nous, I headed a team in Japan building some of the world’s best algorithmic trading engines as Director of Asia Equities Electronic Trading Strategy at Bank of America Merrill Lynch. Also in Tokyo, I spent a number of years at Deutsche Bank as VP Equities Electronic Trading and at UBS in FX Derivatives & Exotic Options. These positions gave me a great opportunity to really understand the working of the international markets and intra-day trading in particular.
As well as lots of fintech experience, I also have telecoms experience from working at Metapath Systems International, and as a music software developer and composer.
What is your job title and what are your general responsibilities?
I am the CEO and Founder of Nous Global Markets. My high level responsibilities include determining the strategic direction of the company and efficient execution of this strategy, from hiring to regulations to user experience. Getting into the code these days is a rare treat!
Can you give us an overview of your business?
Nous Global Markets positions itself at the intersection of FinTech and Gaming. One of our strengths is our ability to reach beyond the traditional customer base with innovative technology and experiences. Our popular virtual-trading app, “SparkProfit”, a free to play mobile financial trading game, was launched in early 2014. That tapped into a hugely under-served market that wants financial market access — but not from existing apps which are no fun, too confusing or too expensive.
Our products are simple, engaging and low cost – SparkProfit is completely free: a zero-risk way to learn about playing the markets with the added bonus of cash rewards.
We have seen 400,000 people sign up from 200 countries, at an extremely low cost of acquisition. Incredibly 33% of regular players had no interest in trading before Spark Profit and 75% had no experience of financial markets – yet 95% say they now want to trade in a for-money version of our app. They find our approach appealing and entertaining.
Next Steps: Capitalising on Discovered Demand
We now hold an Isle of Man Gambling Supervision Commission OGRA licence for a real-money version of SparkProfit and plan to roll it out globally over the next year or so. The pro version of Spark Profit provides a visual, fast and safe financial market exposure to an overlooked customer segment. It lets customers start and stop trading with zero commissions and zero spreads – there is nothing else on the market that offers a service like ours.
The secret of our success is that we’ll do well when our customers do well so our interests are perfectly aligned with theirs. We only want them to invest what they can afford – we’re not involved in leverage or spread betting. Putting it simply, they will tell us how much they want to bet – it could be as low as 10pence – and if they make multiples on it, we make our fee but if they lose, we charge nothing so they only lose what they put in.
By accepting low deposits, micro-trades, transparent fees and strong capital guarantees, we will provide a uniquely protected environment for our customers to test ideas and quickly build confidence.
This is a perfect evolution of a successful product.
Tell us how you are funded.
Nous bootstrapped for the first two years. Then in September 2014, we raised £400,000 in our first seed round at a £2.94 million post money valuation. This was raised primarily from a mixture of ex-colleagues and contacts from the Investment Banking and Tech industry.
We followed this up with a second funding round of £500K in Dec 2015 at a £3.84million post money valuation. This funding was from a combination of angel investors and Syndicate Room (an equity crowd funding site) investors.
Why did you start the company? To solve what problems?
With my background, quantitative trading made sense – there’s maths and logic underpinning it. But looking across the office at the qualitative traders I used to wonder what made them good at what they do. I got to thinking about the idea of talent and grew to realise that there must be talented traders out there who have just never had the opportunity to realise their skill. People whose circumstance lay between them and the shining careers of my colleagues. But what if I could find these people and develop their talent? Where would I need to look? How could they be encouraged to try it and how could I avoid them being put off by unnecessary jargon, over complicated products and, frankly, some of the exploitative practices that lurk out there?
From these thoughts grew the idea of Nous. Nous is a quirky English expression. If you’ve got the nous for something, you’ve got the brain power and the know how. You can work it out for yourself – a natural kind of smart. And it felt right as the name for my company as that is the talent I’m looking for and nurturing in our customers. And our ethos – that we only win when our customers do – also felt right. We think they should know we are rooting for them and we are in it with them. No one else is doing that either.
Who are your target customers? What’s your revenue model?
Our app, Spark Profit, unearthed a hugely underserved population of people who wanted access to financial markets, but were put off by existing apps or could not afford to risk what existing apps require even in their smallest accounts. These people have discretionary income but no way to use it.
We will provide an entirely new way for people to profit from financial markets at very low personal risk. Our revenues will come from profitable trades because our incentives are strongly aligned with our customers’.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
Regulation, and particularly AML requirements, are essential for a healthy and consumer-friendly marketplace. However they can also be a bottleneck for early stage start ups, especially those working on financial inclusivity. Basically one-size no longer fits all. A nuanced risk-based approach to regulation and AML would spur considerable innovation in the provision of new services.
What is your message for the larger players in the Finance industry?
David and Goliath feels highly relevant to today’s finance industry. The Goliath’s are struggling to be as nimble or agile as their smaller, newer fintech competitors especially with declining margins and increasing regulatory capital requirements. I see a real shake-up coming in every segment of the traditional banking model from retail banking, lending and financing, payments and transfers, wealth and asset management. Some visionary leadership is going to be required.
What phone are you carrying and why?
Android Nexus 5 – I bought it because it was one of the few sim-unlocked phones you could buy in Japan (where I was living). Now I won’t go back to Apple until they add a “back” button to their phones.
Where do you get your industry news from?
95% from Twitter. Outside of that, the Fintech weekly and daily emails from Tech Crunch and techcity news.
What’s the best FinTech product or service you’ve seen recently?
My answer would be LendInvest – awesome platform and meaningful returns in this negative interest rate environment on secured short dated property lending.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
Three major trends spring to mind.
Mobile apps will increasingly lead consumer commercial interaction replacing the way we interact with companies in high street branch transactions from banking to restaurants to retail. This will come from innovative partnerships between traditional big players and nimble startups who can integrate agile workflows into existing structures liberating organisations. We’ll be scanning our BLT and paying for it from our phones; little things, too, like vending machines will start being cash free as we scan to pay, and in the banking sector we’ll all be managing our wealth assets on an app.
One current stumbling block is the legacy systems many large banks suffer from but newer agile ways of working through cloud-based solutions are enabling even the big players to embrace technology without the disruption of the past, though they’ll need to bring in the expertise of the fintech. But I’m seeing this happen in a collaborative way, which is really exciting.
And of course, blockchain technology is exploding as new uses for it are developed both in and outside the banking sector. This is going to be the most revolutionary development for the fintech sector in the next few years.
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Thanks to Justin for his answers today. You can find out more about Nous Global Markets on their website and twitter.
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