A few months after launch, Sydney fintech startup Uno has announced it has raised $16.5 million in funding from strategic investor Westpac.
Having been involved with the startup since its initial concept stage, the investment represents the cumulative amount Westpac has poured into the startup since development began late last year, with the bank’s chief strategy officer Gary Thursby saying Westpac was pleased to now be furthering its involvement with the startup.
“Uno’s success has been impressive and we’re seeing its potential to become a serious player in the home loan market,” he said.
Uno launched into the busy mortgage market it May to help Australian homeowners and aspiring home owners find and broker the right mortgage themselves. It allows users to search, compare, and settle a home loan through the one digital platform.
The startup reports that thousands of consumers have come through and actively engaged with the platform since launch, with active engagement classed as creating an account, putting in their details, running some comparisons, and putting together a shortlist or too. These users have looked at loans worth $400 million, with loans in the various stages of actually going through to settlement worth $40 million.
As it looks to grow this further, Uno founder and CEO Vincent Turner said Westpac is playing two roles with the startup. The first is as a lender like any other on the platform, while as a strategic investor its aim is to work, like it does with the companies it invests in through its VC arm Reinventure, to help innovate a sector within the financial services space.
“As a strategic investor they’re interested in helping us build a great business, which means building something of value in the future. In the same way they work with Reinventure companies, they tend to look towards what the bank bring to the table to bring to the business, which might be through leadership or access to insights or whatever that helps bring the business forward,” Turner explained.
Turner said the relationship with the bank began organically several years ago, rather than coming up with the idea for Uno and pitching it to different banks. Previously based in San Francisco running fintech startup PlanWise and the local fintech networking group, he often helped introduce to local startups Australians who were visiting Silicon Valley.
It was in this role that he met both Reinventure’s Simon Cant and Danny Gilligan, and a couple of Westpac personnel. When PlanWise considered making the shift from being a tech-focused company to one centered on financial services, he began thinking about his earlier career in the mortgage space and how he could work in this field again within a financial services company.
“Some angel investors said, if you’re going to go into financial services and into mortgages, why wouldn’t you do that in Australia? I thought that was a great question,” Turner said.
“When I decided to make the move back to Australia I restarted the dialogue with some people, talking about what was possible and where we thought the space was going to go in terms of innovation within third party. Because of that shared vision and intention it got to an alignment that this can actually work, doing this together instead of going down the traditional VC path.”
For the last few months Turner said the startup has been focused on educating the market around the product and building trust – which having a big four bank on as a partner has helped with.
Uno has also focused on building the entire experience, from searching and comparing mortgages through to settlement, within its own four walls as opposed to other mortgage comparison platforms that ultimately send users off to another platform.
“For us we think there’s a much bigger opportunity to build a fully vertically integrated business where you actually control the entire customer experience, taking them from the minute they consider the transaction to settlement and beyond. When you build technology you build it to solve their experience and outcome challenges resulting from that,” Turner said.
Further to this, Turner said the startup has seen the need to create a strong platform that works completely online, able to work with as little face to face or phone contact as possible for consumers who prefer it that way – and despite what the stereotype may be, it’s not necessarily millennials, but rather people in their 30s or 40s who don’t want to take time off to see their broker or have them come by for a home visit while they are cooking dinner for their kids in the evening.
“That doesn’t line up to what their idea of good service is, so this customer, which we expect is about 40 percent of the market, is looking for service but for a high-touch digital service model, not face to face,” Turner explained.
Uno is working in what’s becoming an increasingly competitive market, with a number of startups also looking to change the way Australians go about finding a mortgage.
Fellow Sydney fintech LoanDolphin, which has consumers detail their loan requirements and then have bankers and brokers bid for it through an online auction, announced last month it had reached $100 million in loans negotiated through its platform. Also reaching a significant milestone recently was HashChing, which looks to offer borrowers pre-negotiated home loan deals at rates better than the big banks.
Confident in the Uno product, Turner said the startup is now looking to build upon the digital experience through partnerships with companies servicing audiences “that have an adjacent need”, such as people who might be on a site reading about property or looking to find a builder to help them renovate – OpenAgent, which recently received funding from Reinventure, could make for the perfect first partnership.
The potential Turner sees is endless, significantly greater than that he saw running a fintech startup in Silicon Valley.
“It’s chalk and cheese between Australia and the US in terms of industry and government support behind innovating in fintech. It’s far easier to start and progress a fintech co in Oz than the US, primarily for regulatory reasons, and it’s really important for people doing fintech innovation in Australia to realise that this is a pretty good place to be starting a fintech company.”
Image: Gary Thursby and Vincent Turner. Source: Supplied.