Auswide Bank has entered into a partnership with peer-to-peer lending startup MoneyPlace that will see them take a 20 percent equity stake in the company and provide $60 million in funding over five years. This deal is the first time an Australian bank has invested directly into a homegrown fintech, highlighting the enormous growth of the sector over the last year.
MoneyPlace will use this funding to grow its consumer lending, while Auswide Bank will benefit by diversifying its financing activities nationally. MoneyPlace CEO Stuart Stoyan said that the relationship is a critical milestone in P2P lending globally and demonstrates how banks can work with these lenders to provide a fairer and better rates for all customers.
“This is an exciting development for both companies and is an example of the type of collaboration we believe enables traditional lenders to tap into the innovative business models that alternative lenders like MoneyPlace bring to the market,” said Stoyan.
MoneyPlace was launched in October this year as the second P2P money lender to attain a full retail and wholesale financial service licence. The fintech startup provides unsecured consumer loans from $5,000 through to $35,000 with rates starting at 8.9 percent. The $60 million relationship has ensured that MoneyPlace is sufficiently funded to support increased demand from consumers.
Auswide Bank’s managing director Martin Barrett said that the partnership shows the bank is keen to assist the P2P space in Australia. This is a big opportunity for the bank to help grow the consumer finance market and improve upon the competition between emerging fintech startups and the four big banks.
“We’ve been impressed with the platform, skills and capability of MoneyPlace and are excited by the opportunities that will flow from this relationship. By taking a 20 per cent equity stake, as well as using the MoneyPlace platform to invest funds for consumer finance, both organisations benefit and most importantly those customers requiring consumer finance benefit,” said Barrett.
“We believe we are the first bank in Australia to take this dual equity and funding position. This is a wonderful opportunity for both organisations to grow and be at the forefront of the P2P opportunity in Australia,” he said.
He added that the funding deal “represents the ability for us to accelerate our consumer finance ambitions nationally. Technology is changing the market and we, through the right innovative partners, are keen to take advantage of the opportunities for growth it presents.”
The funding and equity deal will help Auswide to accelerate consumer finance ambitions nationally through the development of technology and partnership with key innovators. The fintech market in Australia is on the rise with startups creating online platforms that remove the cost of and complexity of traditional lending.
Directly in competition with MoneyPlace is Australia’s leading P2P lending platform, SocietyOne, who were listed in the Fintech 100 report. The company was announced last week as one of two Australian fintech companies to make the list of the top 50 established innovators, while seven Australian startups were named on the list of 50 emerging stars, showing how Aussie fintechs are dominating the marketplace, particularly in Asia.
Image: Stuart Stoyan, Paul Abbey, Martin Barrett, Craig Lonergan. Source: Supplied