Blossom: The Aussie twins behind a popular investing app

Ali and Gaby Rosenberg know just how special bonds can be.

After all, as co-founders of the fixed-income investment platform Blossom, they are literally in the business of bonds.

The two also share a bond that most people don't.

The twin thing

They're sisters and they're also both twins - though not with each other. Ali, who is the oldest of the four Rosenberg siblings, has a twin sister.

As does Gaby, who is the youngest of the four sisters.

"For a long time, we didn't know of any other family who had two sets of twins except Roger Federer," says Gaby.

"But he has one set of girls and one set of boys, and we're all girls.

"Since then, I've actually met a couple of families that also have two sets of twin girls, which is exciting."

Despite the rarity of their dynamic, both say that life growing up in Sydney in a family with two twins was pretty normal. It was all they knew. There were one or two quirks, though.

"For simplicity, our parents used to be like, number one daughter, number two daughter, number three daughter, number four daughter," recalls Ali.

So, what made two sisters - who, at the time, were both in their twenties - want to start an investment platform focused on fixed income? An asset class that is, perhaps unfairly, stereotyped as being a bit... boring.

Family finances

To rewind, Ali and Gaby grew up in a family that was heavily involved in the finance industry.

That's not to say that they were avidly discussing bonds as teenagers, though. Far from it.

"We come from a long line of finance professionals. So, our dad, cousins, uncles, grandparents - everyone was in finance. Still, we weren't so interested until university," says Gaby.

Ali studied finance, while Gaby studied commerce. From there, Ali started forging a career in venture capital and fintechs, while Gaby was involved in start-ups.

Then came COVID. As the pandemic began to take hold, Ali and Gaby found themselves living under the same roof again.

But rather than fixating on sourdough starters or cocktail classes, Gaby remembers being absorbed by what was going on in the sharemarket and how the big end of town was reacting.

"The market had crashed, and the crypto bubble had burst. So, we were just watching what all the institutional and high-net-worth investors were doing with their money. They were basically liquidating all their risky stuff and moving it into fixed income.

"We were looking to do some fixed-income investing ourselves, just to try to get on top of our finances. But we couldn't gain access to anything. All the retail guys were left behind because the fees were so high and there were these huge barriers to entry."

Democratising investing

That's where the idea of Blossom came from - the idea of providing regular Australian investors the same access to fixed income as institutions or the super wealthy.

"All these other beautiful asset classes had already been democratised through technology or app-based investing. Through the Stakes and Coinbases," says Gaby.

"We thought, maybe we can take that idea and use it to democratise fixed income, so that it can become an important part of retail investor portfolios."

Coming up with the idea was one thing. Bringing Blossom to life was where the   real challenge lay. As Gaby recalls, the journey started with an extremely long to-do list.

"Financial services in Australia are obviously extremely regulated, so we had to make sure that we were getting the foundations and the structure of the products correct before we started moving on anything.

"So, one, was incepting the business. Two was working out who's going to run the fund and manage the money. Then it was what licensing do we require? Who's going to build the app and our back end? Who's going to do all the legal and compliance? And on and on and on."

As the pandemic rumbled on, Gaby jumped in full time to get Blossom off the ground, while Ali pitched in at night and on weekends, designing product screens and putting together their strategy.

Just under a year after having the idea, Ali and Gaby launched Blossom in June of 2021. Three months later they had already reached $10 million in funds under management.

Those early days weren't a cakewalk, though. Looking back, Gaby says there were two major challenges: earning trust and explaining fixed income.

"It was hard to go into meetings with $5000 under management as two young women who didn't have a long track record. The trust anchors aren't really there. So, you just have to chip away until you're like, 'Oh, we're actually at $10 million now. And now we're at $50 million.'

"The second one is that fixed income is just a less popular asset class in Australia. So, trying to educate people on fixed income and then sell the product was - and is - challenging."

How Blossom works

It's fair to say that a lot of the focus in the investment world is on the likes of tech stocks and crypto. That fixed income doesn't get much limelight. Gaby is a big believer in the role that bonds and fixed income can play, though, especially in times of turbulence for other asset classes.

"As we can see, there's extreme volatility in the market at the moment. But markets are always volatile because there's always something else happening.

"Equities will be volatile for certain reasons and then fixed income will be volatile for totally different reasons. So, diversity just means that if you have a little bit of everything in your portfolio you can manage risk a bit better."

For everyday investors looking to add fixed income to their portfolio, Blossom's pitch is pretty simple. Individuals can pick between two investment products: Blossom Save (which currently targets a 5.70% return) and Blossom Plus (which targets 6.75%).

The underlying Blossom Fund, which is managed by Fortlake Asset Management, includes a diverse range of fixed-income investments, such as corporate and government bonds.

"We're trying to democratise fixed income," says Gaby. "So, what we've done is create the Blossom App which provides access to our bespoke fixed income fund called the Blossom Fund.

"Our whole mission is to try and remove as many barriers to entry as possible. So, $5 minimums in Blossom Save. No sign-up, transfer or withdrawal fees across both products. And we post earnings to your account every single day."

If the fund makes more than the target return - which is paid out to investors - and there's any money left over after paying fees, that's when the business makes money.

Blossom isn't just for retail investors, though.

Both sisters collaborate on managing the Blossom team and high-level strategy, but Gaby looks after the consumer side of the business, while Ali focuses on self-managed super funds, trusts and businesses - even charities.

"One area which has become a really interesting focus for us is the not-for-profit space. You've got charities that need to de-risk their portfolios because of the volatility in the market," explains Ali.

"They need that stability and that consistent return to know that they are going to be able to fund their programs in the future and have confidence in the money that they've already received."

A family business

There's an idea that you shouldn't go into business with family or friends. And for many, that's sage advice. Not for Ali and Gaby, though.

Nearly four years from launch, Blossom has 25,000 customers and more than $109 million in funds under management.

"When people talk about having to find a co-founder or starting a business with a co-founder, they have to go through this dating-like period to understand if they're going to work well together and to make sure that trust is there," says Ali.

"We didn't need to do any of that. We just knew that the trust element was there and that our interests were aligned."

On top of that, Ali says that as the oldest and youngest siblings, there's a dynamic at play between her and Gaby that drives them.

"I'm number one and Gaby is number four. I'm the oldest, so I think, deep down, I inherently want to make my younger sister proud. She's the youngest, so she wants to make her older sister proud.

"I think that just gives us this little drive to make sure that we're delivering something awesome - something we want to feel great about it."

That's not to say that there aren't challenges that come with working together. But those are more for the rest of the family, rather than Ali and Gaby themselves.

"The challenge is probably just talking about work too much when it should be family and personal time. So, we get in trouble from our mum and sisters who aren't involved in the business. But they just roll their eyes and move on to have their conversation at the corner of the table."

How Blossom got its name

As co-founders and leaders, Ali and Gaby are clearly the driving force behind the business. But in many ways, Blossom is a family affair. Even down to the name.

"Our late grandfather Bert's nickname from his mum was Blossom," says Gaby.

"He passed away from pancreatic cancer in April 2020, which is right before we started. And now through our referral program we donate money to the Garvan Institute for pancreatic cancer research.

"He was a huge family guy, and I think a lot of his personality flows through the business.

"So, Blossom really brings all our family together, which is beautiful. Everyone contributes wherever they can."

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