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OnDeck Announces Progress on International Pursuits

OnDeck's Canadian and Australian businesses have secured credit facilities that will allow for further expansion in the regions.

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OnDeck has been one of the leaders in online small business lending for many years. What many people may not realize is that besides the US, OnDeck has operations in both Canada and Australia. Both regions were launched in 2015 and today OnDeck announced that they had secured credit facilities in both countries.

OnDeck secured an AUD75 million (~$55 million) asset-backed revolving credit facility with Credit Suisse for their Australian business and a CAD50 million (~$38 million) asset-backed revolving credit facility with Crédit Agricole.

The new Credit Suisse facility will allow OnDeck to refinance their current loan book at lower cost in addition to funding new originations. The facility in Canada is their first which is split into two parts, 25 million in committed capacity with the additional 25 million available at the discretion of the lenders. These facilities have a floating rate with an initial weighted average interest rate of approximately 5.6%.

As part of the press release, they also shared just how the businesses are structured with the credit facilities:

Under the respective facilities, loans will be made to a wholly-owned subsidiary of OnDeck Australia or OnDeck Canada, which will purchase small business loans from OnDeck Australia and OnDeck Canada, respectively. Each of the two separate revolving pools of small business loans will serve as collateral under its respective facility. OnDeck Australia and OnDeck Canada will act as the servicer for its respective loans.

Conclusion

As OnDeck has shifted their business to being less of a marketplace for investors it has become even more important to control their funding costs which we discussed in our OnDeck Q1 2018 earnings review. They must continuously be shopping for the best deal as a balance sheet lender which is demonstrated by their ability to refinance their loan book in Australia.

The other big take away from this news is that OnDeck is getting traction internationally. Many online lenders speak about the potential to expand globally, but few have taken the leap. OnDeck has already been in these markets for around 3 years and it will be interesting to follow how these businesses develop over the next few years.

Credible Raises US$50 Million in an IPO in Australia

The San Francisco based online marketplace for consumer loans has gone public down under in the biggest tech IPO of the year on the Australian Exchange

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Stephen Dash likes to go down the road less traveled. As an Australian investment banker turned entrepreneur he saw a market opportunity in the USA and he jumped on it despite never having lived or worked in this country. He founded Credible in 2012 as an online marketplace for student loans. You can read a more complete version of this founding story in my podcast with Stephen from about a year ago.

He has built Credible into one of the leading online marketplaces for consumer finance in the USA. Before this IPO, which raised US$50 million, they had raised $23 million in two funding rounds from the likes of some leading Australian and Hong Kong based investors. Ron Suber, the mayor or godfather of fintech, is Chairman of Credible and joined Stephen on their recent investment road show through South-East Asia.

Now, the Credible story is going full circle. Today, on the Australian Securities Exchange (ASX) Credible is going public, raising US$50 million at a US$240M valuation in what will be the largest tech IPO in Australia this year. I caught up with Stephen Dash earlier this week to talk about this exciting development for Credible.

Australia is Looking to Attract Growth-Stage Tech Companies

The first question I asked him was why? Why go public now and why do it in Australia? He said for both questions there were many good reasons. He had decided to do another funding round and started exploring the private markets as the logical option. The reality is that when raising money privately the investment often comes with a lot of restrictions. And once you are a public company you can raise new capital quite quickly sometimes even within a week.

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Marketplace Lending is Starting to Boom Down Under

I report on the first ever P2P lending conference in Australia, AltFi Australasia

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Sydney skyline

Earlier this week I was down in Sydney Australia for the first ever AltFi Australasia conference. When organizer Glenn Hodgeman emailed me about this conference several months ago and asked me to speak I couldn’t resist doing a quick visit to my hometown and being a part of the first ever P2P lending conference in Australia.

The setting was a beautiful conference center right on Sydney Harbour and it was standing room only when Noah Breslow, CEO of OnDeck, gave the opening keynote. He talked about how in Australia, just like in the United States, small business lending actually looks a lot like consumer lending. It is very much focused on the credit of the small business owner. OnDeck believes they have discovered a much better way to analyze the credit risk of a business with their OnDeck Score. Noah said that there is $2.4 trillion in unmet small business lending demand globally and OnDeck is aiming to help reduce that number.

In a fireside chat session, I sat down with former Lending Club executive Mitchel Harad who is now the CMO of leading Australian P2P lender, SocietyOne. We talked about the many differences between Australia and the United States. Mitchel is one of the few people who has deep experience in both markets when it comes to P2P lending. Mitchel explained how in many ways the opportunity for this industry in Australia is far greater even than that in the of the US with banks enjoying such high margins down under.

One of my favorite sessions of the day was an entertaining presentation by Paul Clitheroe, Chairman of the Australian Government Financial Literacy Board. He talked about the efforts being made by Australia when it comes to financial literacy and that Australia is now ranked fourth in the world for money skills based on a recent test of 14-year-olds. He also talked about how the finance industry uses too many buzzwords and jargon and that alienates the average consumer. We need to truly keep it simple if we want mainstream acceptance.

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Lending Club Executive Moves Down Under to Join SocietyOne

The former VP of Marketing at Lending Club, Mitchel Harad, has moved to Sydney to become the Chief Marketing Officer of SocietyOne.

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Sydney skyline

Mitchel Harad has been the Vice President of Marketing at Lending Club since 2011. But my history with Mitchel goes beyond that. In fact, he is the first person I ever met in this industry.

Long time readers will remember the pre-cursor to Lend Academy called SocialLending.net. I did not actually start this website, it was started by Mitchel Harad back in 2008. In 2010 when I decided I wanted to get into this business I bought SocialLending.net from Mitchel. Back then the website had about 25 articles and some affiliate income coming in from Lending Club and Prosper.

I rebranded to Lend Academy in 2012 and the rest is history. But the fact is, if it wasn’t for Mitchel I may never have got my start in this business. He went on to get a job at Lending Club in 2011 and was instrumental in building out their borrower acquisition strategy over the past few years. So, I have kept in touch with him pretty regularly.

Like many Americans, Mitchel loves Australia and we often talked about it when we chatted. But Mitchel was different in that he had already been to Australia and really wanted to go back there to live some day. So, at LendIt last year in San Francisco I introduced him to some of the Australian platforms including the market leader SocietyOne.

I had no idea anything came of this until I was visiting Lending Club a couple of months ago when I ran into Mitchel and he told me the news. He was leaving Lending Club and going to work at SocietyOne in Australia.

I caught up with Mitchel and Matt Symons, the CEO of SocietyOne, on the phone from Sydney yesterday to get the scoop. Mitchel had just been appointed the new Chief Marketing Officer for SocietyOne and he had been in Sydney for only two weeks.

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Overview of the Australian Marketplace Lending Industry

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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.

Ratesetter Australia

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.

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ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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