Melbourne property developer Capital Alliance has diversified into the technology industry, investing $400,000 in online start-up Dutch auction marketplace, Akagu.
Founded in 2015, Akagu is an online auction marketpace valued at $2 million, which aims to disrupt the pricing of goods in Australia by letting customers decide what they want to pay for items.
Currently focused on the fashion industry, Akagu has already attracted big name brands including retailers for Karen Walker, LIFE with BIRD and Camilla and Marc to use its Dutch auction system.
Brands such as Karen Walker will be available via participating retail partners such as Jaz & Alex.
A Dutch auction starts at the uppermost price, the recommended retail price, which decreases periodically until the auction ends.
Usually customers jump in to secure what they see as a fair price before someone else does or the sale finishes.
Capital Alliance founder and managing director Mohan Du said he saw great potential in Akagu transforming sales across diverse industries.
“The concept is game changing for many brands and industries,” he said.
“Hotel providers would be able to sell off excess stock without damaging their brand perception – same with airlines.
"This is a new way of selling.
"Diversification is obviously a business strategy but it’s also more personal than that.
"I’m a young entrepreneur operating in the city I grew up in and I want to give that opportunity to others,” he said.
“Our entrepreneurs need private sector funding so they don’t take their ideas elsewhere.
"Why does Silicon Valley or New York City have to be the hot bed of start-up culture? Why can’t Melbourne be?."
Akagu is the brainchild of Melbourne entrepreneur Jimmy Zhong.
“Fashion has experienced immense change recently, with a general trend towards cheaper and faster, pushing talented designers out of business," Zhong said.
"This is unsustainable and, to complicate matters, consumers are beginning to favour higher quality products, but not necessarily with the price tag,”
Zhong said the Dutch auction provides designers and retailers with an alternative to heavy discounting which damages brand values.
“Often brands miss out on a sale because a customer might consider an item too expensive, or a customer pays a premium through another avenue if they miss out on a product through the store – either scenario is a missed opportunity for both customer and brand.
“Ultimately we want Akagu to enable a deeper shopping experience where customers are empowered by choice and brands have the opportunity to connect with customers that truly value their products or services.
“While we’re still in the launch phase of Akagu, we’ve already found customers feel better buying at prices they decide, whilst enabling brands to engage customers on a deeper level,” he said.
Zhong said he is excited by the opportunity that the Capital Alliance presents in providing funding.
“Over the past five years, the start-up community has really picked up in Melbourne but I believe that private sector investment is still uncommon so it’s fantastic that Capital Alliance is leading the way.”
Akagu’s first sale went live in December 2015, with more than 500 subscribers.
The start-up will officially launch in January 2017, with plans to expand their platform to other industries in 2017.