Afterpay co-founder and Australia’s youngest self-made billionaire, Nick Molnar, is busy tipping some of his estimated $2.2 billion personal fortune into Australian startups, including online checkout platform Fast, social media startup Linktree and trading app Superhero.
Company searches show the co-founder of the ASX-listed buy now pay later (BNPL) juggernaut and his wife Gabrielle Molnar, after coughing up around $45 million for their home and an adjacent block of flats in Bondi, have turned their attention to fast growing local startups.
The majority of the couple’s wealth is held in Afterpay stock, which has dropped more than 20 per cent this year to $91.89 a share. The latest round of investments has been made directly by Mr Molnar rather than through Afterpay’s venture arm Afterpay Ventures.
Wayne Baskin, co-founder of share trading platform Superhero, which raised $25 million from investors including Mr Molnar in April, said the Afterpay co-founder’s involvement has delivered a significant boost to Superhero.
“It’s great to see the support coming from guys that have had success,” Mr Baskin said. “It’s good to see Australians supporting Australians and guys that have been there before saying ‘Yes we believe in you as well’.”
The extent to which Afterpay and other BNPL providers will be subject to regulation is a looming issue for the sector and Mr Baskin said Mr Molnar had encouraged Superhero to focus on compliance from the start and not wait until it was ready to enter the market.
“He definitely does bring the name that people want to talk about and he does bring ideas,” Mr Baskin said.
“A lot of what we’re doing with regulation and really getting on the front foot and having a good compliance team has come from the discussions that I’ve had with Nick.”
Social media startup Linktree has also tapped into Mr Molnar’s expertise, as it expands its offering into ecommerce, after the billionaire invested as part of a $US45 million ($58 million) round in March.
Linktree co-founder and chief executive, Alex Zaccaria, said Mr Molnar’s experience in scaling a company with global impact from Australia stood out as a key asset.
“We were looking for business people that have been there, done that to help us through the scaling issues,” Mr Zaccaria said. “Also from a product perspective, he is so across fintech and [given that] we are really investing heavily in being the future of social commerce, we are definitely excited to work with Nick.”
Mr Molnar also stands to benefit from his startup investments beyond the potential financial returns.
Domm Holland, co-founder of Fast, which Mr Molnar was an initial angel investor in, said there were three identifiable drivers for Mr Molnar’s startup investments.
“One is purely financial if you have the capital and you don’t need immediate liquidity on that capital, then startups can be a great investment and provide really good returns,” he said. “He would get great deal flow and a great position on cap tables and any cap table he wants.”
Secondly, Mr Holland said investing in startups gave entrepreneurs like Mr Molnar a way to give back to the startup ecosystem.
“It’s a great thing for founders to be giving back and helping entrepreneurs both in terms of giving them that cheque and that his name behind the cheque will help them as well as any sort of mentorship.”
Mr Holland added the investments gave Mr Molnar “optionality” and additional insight into any startup Afterpay may be keen to invest in.
“Any business which is remotely interesting to Afterpay in the future, I presume it’s going to give them a closer look,” he said.
Mr Holland said in the United States, where he is now based, there are “tens of thousands” of angel investors who have made money out of technology and who invest that money back into startups, a phenomenon which is still in its early days in Australia.
“The Nick Molnar effect is is amazing but sadly it’s one of few examples of that, we need lots and lots more of these angel investors,” he said.
Mr Molnar declined to comment.