After LendIt USA 2015 I took a two-week trip back to my home town of Sydney, Australia. This was primarily a vacation but I did take one day and had meetings with many of the Sydney-based platforms. I took this photo above on my ferry ride into downtown Sydney on my way to this day of meetings. This post will provide a summary of those meetings and some thoughts on the Australian marketplace lending industry.
I visited the Ratesetter Australia offices in the heart of downtown Sydney and I sat down for coffee with Daniel Foggo who is the CEO and Founder. He has a very interesting story. Daniel became fascinated with P2P lending back in 2012 while working at Barclays Capital. He became so enamored he quit his job and decided to start his own P2P lending operation. But he didn’t want to do this alone.
Realizing that there are many successful platforms who may be interested in expanding to Australia he jumped on a plane to Europe and met with various P2P lending leaders. He hit it off immediately with Peter Behrens and Rhydian Lewis at Ratesetter and they signed a partnership agreement in November 2012, with Ratesetter UK taking a minority stake in Ratesetter Australia.
At that time SocietyOne, Australia’s first P2P lender, had recently launched targeting sophisticated investors but Daniel decided he wanted Ratesetter open to all investors like it is in the UK. This meant going through an arduous registration process with ASIC (Australian Securities and Investments Commission) Australia’s equivalent of the SEC.
This process took longer than expected but Ratesetter launched in November 2014. In less than five months they have issued $3 million in new loans and are on a run rate of $1 million a month now. Interest rates on loans range from 7.5% to 16% with loan terms of six months to five years. One of the primary uses of funds is to buy a car and this will become more so at Ratesetter after their recent deal with Carsales.com.au, the leading online car marketplace in Australia.
Like Ratesetter in the UK, Ratesetter Australia has a provision fund to protect investors. Interestingly, Daniel said they have done no marketing to attract investors to date; they are reaching many interested people through some publicity and word of mouth. I still have an Australian bank account so while I was there I opened up my own account at Ratesetter Australia and have begun lending money to Australian borrowers.
The first and leading P2P lending marketplace in Australia is SocietyOne. They are located right across the street from Ratesetter and I sat down with the two co-founders, Matt Symons and Greg Symons (they are not related), in their offices.
I am not going to cover them much in this post because I recorded an in-depth interview with CEO Matt Symons that you can read and listen to here.
One point I will say about SocietyOne. They are an innovative company and the two co-founders have built their business deliberately. They are only open to sophisticated investors (Australia’s version of accredited investors) today but are very close to launching for all investors. I expect we will see some big things from SocietyOne in the coming months.
A Vibrant Market
There are many platforms either looking to launch or those that have recently done so. I met with Sunil Aranha and Harsha Nair of Thincats Australia, another example of a UK company opening a presence in Australia. They are Australia’s first peer to business lending platform and have been in operation since December 2014.
I had an interesting lunch with Glenn Hodgeman of Ozp2plending.com. He has become something of an expert on the Australian market and it was great to hear his perspective on all the companies down under.
I also had coffee with someone at a large Australian bank who is investigating the space. The large US banks have been, for the most part, only observing marketplace lending but in Australia we might see the big banks take a more proactive approach. I will be following developments here with interest.
I ended the day at a very interesting company called MoneyMe. Their tagline is “Small loans your way” and they are disrupting what was known as the payday lending space. They remind me a lot of LendUp in the US in that they are bringing an innovative, automated approach to small dollar loans that is very data driven. They are a balance sheet lender today but they are certainly a company I will be keeping my eye on.
Now, I realize there are many more companies in the vibrant Australian market but I didn’t get time to see everyone. And there is also a lot happening outside of Sydney.
I see MoneyPlace in the press regularly, they are based in Melbourne and are launching a consumer platform for retail p2p investors shortly. DirectMoney is an interesting company that is about to launch a retail fund and is going public next month on the Australian Stock Exchange. Lend2Fund is focused on secured lending on commercial property; Kikka Capital just recently did a deal with Kabbage; LendEx is launching soon and will be lending to both SMEs and consumers; Harmoney (based in New Zealand) have also indicated they will be opening in Australia soon.
This does not even come close to all the companies interested in launching in the marketplace lending space. There is something of a gold rush going on down under right now with a lot of entrepreneurial activity. I will be watching the industry develop there with great interest.