Online small business lender Prospa has announced that it has raised $60 million – the largest capital raising to date by an Australian online lender – from a consortium of investors including The Carlyle Group and Ironbridge Capital. Prospa’s seed and Series A investor, Entrée Capital also contributed to this round, as well as Airtree Ventures and high profile private investor David Fite.
Like its successors Moula and Spotcap, Prospa emerged as a response to the demand for faster financing solutions amongst small business owners who were filling out pages of complex paperwork and waiting long periods of time for an outcome that could still be ‘no’. In fact, 2011 RFI Intelligence Survey found almost 50 percent of small to medium-sized businesses that apply for traditional credit loans are rejected.
Prospa’s fast online application process, coupled with its proprietary technology platform, allows small businesses access to short-term capital in times of urgency. Prospa can approve loans within 24 hours by processing the applicant’s data and has a 90 percent approval rate. Since its inception in 2011, Prospa has lent over $70 million to small businesses.
The fintech company was co-founded by Beau Bertoli, who carries more than 10 years of experience in the B2C and B2B financial services space, and Greg Moshal, who specialises in new market entrances and strategic partnerships. Bertoli and Moshal are co-CEOs in the company.
“With an estimated $10 billion small business finance market emerging in Australia, we are pleased to be able to service that market by providing small business owners with the funds they need, when they need it, in order to grow their business,” said Bertoli.
The new capital will be used to help fund additional Australian small businesses and support Prospa’s expansion in the local market.
“The $60 million capital raising is a great step forward for Prospa. This strategic raising included one of the largest funds and some of the most established technology-focused investors in the world,” Bertoli said.
Greg Ruddock, joint CEO of Ironbridge Capital said the firm has looked at a number of fintech businesses in Australia and that Prospa “stood out from the crowd as the market leader”.
“We are very excited about investing in Prospa to enable them to continue their rapid expansion as well as help the Australian small business economy thrive. Leveraging technology is key to their growth and we are proud to be the lead investor of this financing round,” he added.
In June this year, to manage high demand, competitor Moula raised $30 million – the second largest amount raised by an online lender in Australia. The round was led by Liberty Financial, which took a stake in the company as a major investment partner, as well as NCN Investments and a group of private investors.
While Prospa has been in the game longer, it seems both companies are equally-equipped to be market leaders.