Disruption Guaranteed: Cedric Fuchs and Shaun Sergay

Nearly all of Australia and New Zealand’s commercial properties are secured by bank guarantees. However, eGuarantee is set to change that. The brainchild of Shaun Sergay and Cedric Fuchs, co-founder of Charter Hall (today a property company with over A$55 billion in assets under management), eGuarantee digitises bank guarantees and distributes non-collateral lease bonds for commercial property leases, providing landlords with a single online registry and reducing administration hassle.

A popular practice overseas, it hasn’t taken off in Australia until now. "There is nothing else like eGuarantee in the market here," says Shaun, the company’s CEO.

"It facilitates an electronic, non-collateral guarantee – the lease bond – for commercial lease security, and it also digitises existing paper bank guarantees as well as acts as an electronic repository for documents, messages and so on, agnostic of provider."

While being the first of its kind in the country is quite an achievement, Cedric, a seasoned real estate and insurance industry veteran, and the company’s Executive Chair, admits it doesn’t come without challenge.

"We are working to overcome the misconception that this lease bond is not as good as a bank guarantee because it is – exclusively underwritten by Assetinsure, the largest construction and lease bond insurer, and backed by some of the biggest reinsurers in the world. The inertia that exists within the market, that’s our real competition."

"There are absolutely no downsides for tenants, landlords and intermediaries like commercial leasing agents, tenant representatives or brokers in using eGuarantee," Shaun adds. Even more, eGuarantee was built exclusively for lease security purposes; the same can’t be said for bank guarantees.

"What’s interesting is the bank guarantee is just a generic guarantee product," he points out. "It was never designed for lease security specifically, and it falls short in a number of areas." Where bank guarantees require up-front cash or collateral, the company’s lease bond doesn’t. A bank guarantee can take weeks; eGuarantee’s tenant approvals process takes on average 48 hours.

And since the landlord claims process is applied for on the digital platform, they receive their money within 24 hours, unconditionally and on demand. The platform’s ease of use is one of many selling points. Inspired by Apple’s design principles, Shaun and Cedric worked with developers on an intuitive interface that offers seamless navigation. "Our premise is keep things simple," Shaun says.

"It often costs more to build simplicity because so much goes into making it easy to use, but the uptick is we didn’t have to educate users on how to run through the system." That said, the company still offers a dedicated team of service professionals to help with customer queries.

"They’re there to assist whenever necessary," he confirms. "As much as we are a self-service electronic business, you can never stray too far from human interaction; nor should you ever want to." In February 2021, eGuarantee opened its proverbial doors for business and has maintained a steady growth since.

"There are a lot of users on the platform, and we’ve issued many bonds already," Shaun says. "In fact, we get a number of new applications every day and have already digitised many landlord portfolios of bank guarantees." And he and Cedric are certain it’s only going to get better.

"Cedric and I have struck a generational collaboration that delivers an all-encompassing solution to the market. Our opportunity is that the market is well over A$6.5 billion. It’s a stimulus that can be put back into the Australian economy. It’s huge, and that’s why we’re focusing here for now," Shaun shares.

The eGuarantee ethos of ‘if you want to go far, go together’ is exemplified by the team’s calibre. "We have the likes of Stephen Ellis (ex-CEO of Knight Frank and CBRE Australia and New Zealand), Michael Greer (ex-CTO Zip Co Ltd), Joe Wongchanglor and many more, not to mention our fantastic shareholders who’ve supported us from day one," Shaun says.

"For me to support this, it was vital that eGuarantee would be able to tick all of the boxes for the landlord, tenants and intermediaries, and it does," adds Cedric. As for the future, Shaun and Cedric have their sights set on possibility. Once eGuarantee has garnered the trust of the masses and becomes ingrained in Australia’s property market, they believe lease bonds are only the beginning.

"Our primary aim is to make this work for the property industry first of all and then bolt on other use cases because we see there are lots of other possibilities," Shaun shares.

"While in time, I’m sure this will morph into other areas as well, right now, we believe it’s important to focus on the objective first – reach it, keep the momentum going and hit the target, making sure it becomes successful before moving on to other things. And I’m a great believer that we’ll get there because the product is good."

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