With CBA finally paying commissions, Mozo founder claims he’s on way to being ‘SEEK of financial services’

Michael Bailey Deputy editor

With CBA finally paying commissions, Mozo founder claims he’s on way to being ‘SEEK of financial services’

Published 26 November 2013 16:02, Updated 27 November 2013 16:39

Looking for that elusive network effect: Mozo founder and unabashed SEEK fan, Rohan Gamble.Photo: Louise Kennerley

The founder of financial services comparison site Mozo, Rohan Gamble, makes no secret of his wish to emulate SEEK – he even tapped Andrew Bassat as an early investor – and is undertaking his first above-the-line marketing campaign to try and triple visitors to more than 1 million per month.Mozo became profitable in 2011, three years after its launch, and its $5 million in annual revenues currently comes mostly from the banks, for which it is a cheap lead generation source on home loans, credit cards, savings accounts and term deposits.

Mozo maintains a database of the latest interest rates from all the major banks and non-banks, but until this year Commonwealth Bank had not agreed to a link-through from mozo.com.au, on which it would pay the comparator a commission for referrals that turned into new business.

Disruptive pedigree

“It makes sense they would be the last major to work with us. They’re the incumbent, they’ve potentially got the most to lose from a disruptor,” says Gamble, whose disruptive pedigree includes a 2003-6 stint running Virgin Money.

He sees opportunity in the fact that Australia lags countries like the UK in penetration of financial services comparison sites.

“[The UK’s] Moneysupermarket.com is the granddaddy of what Mozo does. Like SEEK, it’s one of those businesses that just kept investing through the crisis and is now enjoying the network effect,” he says.

“It’s a hard thing to achieve – there is no SEEK equivalent in the UK,” he says.

Gamble says it’s taken a relentless five years of relationship-building with the banks, scaling up through white-labelling relationships with the likes of Fairfax’s Domain, and healthy competition with InfoChoice (now owned by iSelect) for his concept to gain sufficient market power for CBA to take notice.

Something from literally nothing

After spending $1 million on the pre-launch of Mozo during the height of the lending boom in 2007, Gamble lost everything when 2008’s financial crisis wiped out his heavily leveraged equity portfolio.

He had to raise venture capital much earlier than expected – $3 million over the next couple of years including from Bassat – but has retained majority ownership, “although I admit I sometimes wonder how”.

The lean model which the GFC forced him to adopt has probably helped. Mozo still only employs a handful of people, and pays virtually nothing for its technology which includes ‘change detect’ software that tracks rate or price changes at more than 180 vendors.

“It’s all open-source software, and with servers the lot is probably $5000 a month. Our rent costs more,” he says. “It’s the tech people who put it all together that’s the expensive bit.”

SEEKing the network effect

Mozo has been “plodding along”, Gamble says, even though it’s achieved a 50 per cent compound annual growth rate over the last three years.

However, the banks have become more willing to lend this year, Gamble says. His latest 12-months contracts with the major are “uncapped” in terms of the amount of new business Mozo can bring them.

Gamble will use the uptick in sentiment to try and grab some SEEK-esque network effect – even if that’s not possible to the same extent in the financial services market, where all the buyers don’t need to be in the same place.

Gamble has just moved Mozo into comparison of car insurance and travel insurance, the latter backed by an advertising campaign on baby boomer radio station, 2GB.

“The Gen Ys don’t seem to be interested in travel insurance but their parents still are,” he observes.

He is planning more advertising in a bid to scale up to 1 million unique browsers a month for mozo.com.au, up from 350,000 currently.