Featured in Capital #82. Subscribe to get the real thing here.
One company is making spreadsheets sexy.
When Hnry co-founders James and Claire Fuller moved from the UK to New Zealand a decade ago, creating an award-winning, multi-million-dollar fintech company was not part of the game plan. The couple and their young daughter, Isabelle, swapped London for Wellington to be closer to Claire’s family, and they were enjoying freelance contracting in the capital.
Claire, who has a background in finance, compliance, and legal and data analysis, was working as a consultant for EQC and MPI. English-born James trained as a developer before going into management consultancy in the technology sphere. He took up senior consultancy roles for Deloitte, Davanti, and Westpac before also going to work as a contractor, for Wellington start-up incubator Creative HQ.
They loved the flexibility of self-employment but the downside was the endless load of financial admin: the hassle of income tax, invoicing, expenses, GST and ACC. An “old-school” accountant made them put away 33% of their income against tax when their real tax rate was closer to 25%.
Sitting in their boardroom in their airy, modern Brandon Street offices, the couple explain how Hnry, their app-based accountancy service for self-employed people, was born out of these frustrations. To understand how much tax they actually needed to pay, James created a couple of spreadsheets. “Hnry really started as us taking a bit more control.” Their intention was not to start a business; it was simply to spend far less time thinking about tax. “It was to find out: how do you cope with this thing, so you can actually get on with your life and not think about taxes the whole time?”
Claire loved contracting “so much” she was forever convincing friends to go freelancing. Inevitably, the question of how to manage their taxes would arise. “Then I’d helpfully offer James’s time!”
At that point, he says, “we were just people going through some spreadsheets, helping some friends out, we didn’t think ‘Oh, this could be a business’.” But then those friends would tell their friends about “the guy who had these spreadsheets” and word spread. By now James was working in the start-up community at Creative HQ and he could see the business potential in people motivated by “the endless possibilities of starting something from nothing.”
The couple assembled some calculations about how much money a self-employed person needs to put aside relative to earnings, and James wrote some code for an algorithm to automatically calculate, deduct, and pay the right amount in taxes.
In early 2017 the pair created a “basic” one-page website and advertised their services on Twitter. “To our surprise people signed up,” says James. Amazingly, says Claire, people were so desperate to sort their tax out that they were happy to hand over their money to an unknown online venture. “It shows the pain points. They needed the service so badly, they were like, ‘Oh please just take the money’, and they were so hopeful that it would work out.”
The Fullers spent evenings and weekends on their business, although, says James, “it still felt more like a hobby business”. But by 2018 their side hustle had grown into something significant enough for James to go unpaid to work on it fulltime. Hnry raised nearly a million dollars from local angel investors, and the pair started to hire a small team. In March 2020, Hnry was launched in Australia.
Since then Hnry has mushroomed. It is New Zealand’s largest specialist accountancy, with “tens of thousands” of Kiwi customers. It has a customer base in Australia “in the early thousands” that is growing by 25 to 30 per cent per month. There are 40 staff (30 in Wellington and 10 in Sydney) and the company plans to double that this year. Hnry is a two-time winner in the Wellington Gold Awards: in 2019, as Emerging Service of the Year, and in the Supporting Gold category in 2020.
In February Hnry was valued at $100 million and secured a $16 million investment from a US growth equity firm, Left Lane Capital. Some of that money will go towards further expansion offshore. Hnry is looking at several other markets, says James. He won’t say where, but finds it exciting that “we may be in a third country very soon.”
The Fullers, who each have a 16.21 per cent stake in the company, say that Hnry’s “one-stop-shop” offering is a world-first. The pay-as-you-go service charges $1 for every $100 earned, with a cap of $1,500 on fees annually. Hnry’s software automates your taxes, generates invoices and tracks expenses. Customers get a Hnry bank account into which their self-employed income is paid, and a payslip so they can see where their money is going. There’s also expert support via email and an online chat service.
Hnry grew 500 per cent in the 18 months since June 2020, says James, who is the chief executive. The rise is partly due to the number of people going into self-employment in response to the pandemic. But people were already moving into contracting or the “gig economy” before covid hit. Some couldn’t access their accountant in lockdown, and they turned to Hnry. Others have side hustles: Hnry’s customers include real estate agents who do Uber driving, and couriers who work for scooter companies. Meanwhile a lot of Hnry’s new customers have been in self employment for some time and are simply “tired” of handling the financial admin themselves. A third of people who join Hnry, he says, have an accountant but still have unfiled accounts or unpaid taxes. “Some people have a six-figure tax debt. We’ll help them get back on track.”
The name Hnry was “crowd-sourced” via the start-up community. Claire and James liked the idea of a service with a name, suggesting a person who was “friendly, approachable, smart and fun, trustworthy, who invokes that feeling of efficiency”, says James. Two people suggested Henry, and it stuck, minus the “e.” Most traditional spellings for domain names are unavailable. It’s a “cult joke” among start-ups, says Claire, that you remove a vowel to get the domain name you want. The only downside is some “delightful misspellings. So we also own Horny.com and Horny.com.au, just in case.”
“But we love the name,” adds James, who is wearing a Hnry-branded top. It’s personable, and customers relate to it. “Imagine if we’d called ourselves Auto Tax App.”
James says he and Claire are “best friends who went into business together”. The couple met in London while working at global data company Experian. Claire was in the finance team and James was in tech support. The app he was responsible for kept breaking. It was “clunky”, he admits. “Claire frequently had to call for tech support.” It was Claire’s workmate, she insists, who needed more help. “If my colleague phoned, you did it remotely. But if I phoned you popped up the stairs!”
The pair married in Britain in 2010 and Isabelle was born in 2011. “London and children were not a winning combination” says Claire, who convinced James they should move to Aotearoa when Isabelle was 14 months old. Colleagues at Deloitte London said to move to New Zealand would be “career suicide”. But James, who grew up in south-east England, agreed to try Wellington for a couple of years.
Within six months, he’d decided to stay. “This was home now. I couldn’t go back to the UK, things here were so nice. Particularly for raising children, and all the great stuff that comes with living here – it was so superior to living in London.”
Now in Khandallah, they’ve swapped a three-hour daily commute for a quick trip into Wellington’s CBD. Daughter Emilie, 6, was born in 2015. Weekends are spent visiting Claire’s parents in Paraparaumu, trips to Martinborough and BBQs with friends. “Weekends are a chance to connect. Otherwise the days just fly off the calendar and you don’t see anybody,” she says.
Claire, who is chief operating officer, jokes that she and James started Hnry “so we didn’t need to think about our tax, and now literally all we think about is other people’s tax”.
But they don’t mind, says James, as long as their customers don’t have to think about it. The pair spend a lot of time trying to raise awareness about tax in self-employment. “The nature of work itself has changed so much” he says, “government and the banks haven’t really changed with the times. When they imagine small business, they imagine a plumber with three employees.” But in fact the vast majority of small businesses are actually “sole, independent operators.”
Hnry may be a modern way of doing tax in the 21st century but Claire says 40% of Hnry customers still come via referrals. “Basically it’s the advocacy of our customers that has built this business.”