Australian FinTech has hit another milestone, with short term lending startup MoneyMe announcing a $30 million capital raise, comprised of both debt and equity funding, from “a high net worth Australian family office” looking for alternatives to property investments. The startup last raised $1 million upon launch in 2013.
As well as helping the startup up the value of its loans from $2000, MoneyMe CEO Clayton Howes said the funding will go towards the launch of a series of niche financial products that the startup will be marketing to millennials throughout 2016, with this market a core focus.
“The millennial market is a particularly important one for financial organisations, as it is a market with a demonstrated propensity to spend big on lifestyle and convenience, and pay a premium for the opportunity to do so. But it’s also a market that’s growing tired of being peddled financial products that are delivered en-masse and by traditional means, as if each consumer has the same risk profile, lifestyle needs, and capacity to repay,” Howes said.
“For this reason, fintechs with the ability to create niche products that are delivered in a tailored way that suits the unique needs of the millennial market will immediately find themselves at an advantage over slower-moving, more traditional finance providers who seem incapable of adapting fast enough to meet the changing demands of this market.”
Despite Westpac pulling out of a financing deal with fellow payday lenders Cash Converters and Money3 last year, Howes said the funding, and the investors behind it, also highlights the growth of trust in the Australian fintech sector among investors.
“Valuations in the fintech sector have largely been based on forward-looking growth projections until quite recently, rendering it a somewhat risky and mostly untested investment class for many high net worth Australian investors,” he said.
“Now that the fintech movement in Australia is reaching the two year mark, however, a number of investors who were previously sitting on the fence when it came to investing in fast-growing, tech-based startups are now finding the confidence to put their money behind those firms who have now demonstrated an ability to generate real returns.”
The funding comes a few weeks after Spotcap, the Rocket Internet-backed small business lender, raised almost $50 million in its third funding round to help grow its international operations, with growth in Australia key.
Meanwhile, Melbourne-based peer-to-peer lending startup MoneyPlace entered into a partnership with Auswide Bank in December, with the bank taking a 20 percent stake in the startup in exchange for $60 million in funding over five years.
Image: Clayton Howes. Source: Supplied.