Online mortgage lender Athena raises $70 million in Series C

Fintech startup Athena has closed a $70 million Series C round as it looks to push into mortgage origination.

The country’s largest industry fund, AustralianSuper, joined the raise alongside long-term backers Square Peg Capital, AirTree Ventures and Hostplus, as well as Salesforce Ventures and NAB Ventures.

Square Peg’s Paul Bassat joined the Athena board last year when the company raised $15 million in a Series A. Six months later, in November 2018, it raised $25 million in a Series B. The latest cash injection values the company at $230 million.

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The cloud-based fintech, founded in 2017 by ex-NAB bankers Nathan Walsh and Michael Starkey, also counts Macquarie Bank, Rice Warner, Apex Capital, and RESIMAC Group among its investors and from the outset targeted super funds as lending partners.

To date, Athena has written around $500 million in loans since its launch in February, with a goal of writing $1 billion in business within 12 months, but has focused on refinancing. It was among the first to respond to recent RBA rate cuts, passing on the full 25 basis points to offer a 2.84% p.a variable rate for owner-occupiers and 3.24% for investors.

The cash injection will have the business eyeing off a market worth around $380 billion annually, with around 80% of that figure new mortgages.

Source. Startup Daily, Simon Thomsen, October 21, 2019

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Summer wants to vanquish student loans for borrowers, and now has $10M to do it

$1.5 trillion. That’s the amount of outstanding student loan debt held by American citizens according to the New York Fed. It is an astronomical sum, and has led to much hand-wringing about whether there is a coming bubble in U.S. higher education.

What’s even worse than the scale of the debt load though is the fact that for millions of borrowers, they literally don’t have to pay some of those dollars. Thanks to the complexity of the loan system in the U.S., borrowers often qualify for repayment programs that can lead to loan forgiveness, that is, if they can figure out the terms, apply correctly, and actively follow the rules to net the write-off.

Enter Summer. The public benefit corporation is on a mission to act as a “trusted advisor” to student loan borrowers. Through its platform, borrowers can get a full 360-degree view of their current student loan situation, and begin exploring options for how to repay it in the most financially efficient way possible.

The company’s early traction has brought it a new round of venture capital. The company announced this morning that QED Investors, one of the leading early-stage fintech investors out there, led a $10 million series A round in the company. Partner Matt Risley led the deal, who joined QED about two year ago from European fintech giant Klarna, where he was CFO.

Co-founder and CEO Will Sealy analogized Summer to how tax accountants help filers handle the complexities of doing their taxes. “We’re trying to create the software that democratizes [student loan] expertise, that gets the expertise into the hands of the end consumer, who might not be able to afford an accountant that doesn’t even unfortunately exist in the student loan space at this current moment,” he said.

He noted that the company is building out support for 120 loan forgiveness programs and their complicated rules, and has its eyes on more than a hundred other student loan proposals that are sitting in state legislatures across the country.

The company was started at Yale by Sealy and co-founders Paul Joo and Vincent Tran, and the trio eventually migrated to New York City while building the team to 13 according to its staffing page. Sealy previously worked at the Consumer Financial Protection Bureau in DC in the Office of Students, where he worked on precisely the challenges of getting students better access to quality information around student loan programs.

So far, Summer, which launched in 2017, has helped 10,000 borrowers to date, and “just in this year, we have helped borrowers save $8 million,” Sealy said. “A critical metric is not just how many people we are engaging, but how much money we’re saving them.”

Summer does not charge end users to use its product. Instead, it sells through enterprises and other types of organizations to offer the product as a benefit to employees. Sealy gave the example of medical associations, who could offer Summer to recent medical school graduates, or companies who want to entice recent grads with a simple tool that can improve their financial lives.

Summer currently works retrospectively, in that it targets users who are post-grads. I asked why Summer didn’t focus prospectively on helping borrowers think through their student loan products before they take them on. Sealy replied that “In many ways, it feels like the house is on fire. So before we would ever go about trying to create a better smoke detector and build a new home, we want to save the people who are currently struggling.”

Risley of QED explained his rationale for leading the round. “QED, like the rest of the investors like General Catalyst and Story Ventures, we put a pretty big round into this company on the belief that there’s an urgent problem facing these student loan borrowers and we’re working hard to … scale to meet the needs of tens of millions of student borrowers.” With 10,000 users and $8 million saved, you can start to project out the potential impact Summer could have for many borrowers.

In addition to QED, the round had participation from General Catalyst, Greycroft, NextView Ventures, and Story Ventures.

Update: Changed the lead partner’s name from Matt Burton to Matt Risley at QED.

Source. TechCrunch, Danny Crichton, September 26, 2019

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Funding Circle Completes $198M Securitization

Funding Circle, a San Francisco, CA-based small business loans platform, closed its first $198m asset-backed securitization (ABS) of US small business loans originated through its system.

The deal marks the debut of Funding Circle’s US securitization sponsorship capability, and is the fifth securitization of Funding Circle business loans globally.

The transaction is rated by two ratings agencies, with its senior tranche earning an A- (sf) rating from Kroll Bond Rating Agency and an A3 (sf) rating from Moody’s Investors Service.

The deal saw demand from 18 institutional investors, ranging from asset managers and private credit funds to insurance companies and sovereign wealth funds.

Launched in 2010, Funding Circle is a global small business loans platform, connecting businesses who want to borrow with investors who want to lend in the UK, US, Germany, and the Netherlands.

So far, investors across Funding Circle’s geographies — including more than 90,000 retail investors, banks, asset management companies, insurance companies, government-backed entities, and funds — have lent $10.2 billion to 72,000 businesses globally.

In the USA, where the company is led by Managing Director Bernardo Martinez, Funding Circle has originated loans to more than 14,000 US businesses, with US borrowers currently averaging 11 years in business and $1.4 million in annual sales. In the country, it recently marked $2 billion of cumulative loan originations and $1 billion of loans under management.

Source. FinSMEs, August 28, 2019

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Working Capital Financing: Greensill Raises $800M in Funding from SoftBank Vision Fund

Greensill, a London, United Kingdom–based non-bank provider of working capital finance for companies globally, received an $800m in funding.

The SoftBank Vision Fund made the investment.

The company intends to use the funds to:

– accelerate development of new technology to further improve access to capital for companies globally,

– enhance its ability to support the development of a broad, liquid capital market for working capital finance assets, and

– accelerate its recent entry into Brazil and enter multiple global markets including China and India.

Led by Founder and Chief Executive Officer Lex Greensill, Greensill is a provider of working capital finance for companies globally. The company provides businesses with alternative sources of funding, allowing them to provide suppliers with the opportunity for faster payment, while at the same time preserving their own capital position.

Greensill provides Working Capital Finance facilities to customers across Europe, North America, Latin America, Africa, and Asia.

The company owns Greensill Bank, which, founded in Bremen, Germany in 1927, has a suite of proprietary Supply Chain Finance Funds run by world leading fund management organizations, and works with more than 100 institutional investors that together provide stable funding. Greensill has extended more than $60 billion of financing to more than 8 million customers across 60 countries since inception.

The company is headquartered in London with offices in New York, Frankfurt, Chicago, Miami, Singapore, Sao Paulo, Mexico City, Johannesburg, Sydney, Warrington and Bundaberg.

With the Vision Fund, Greensill will build on its partnership with General Atlantic to continue developing its global network, further grow its established origination and distribution strategy, and explore new opportunities for collaboration.

Source. FinSMEs, Staff, May 13, 2019

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Aspire raises $32.5M to help SMEs secure fast finance in Southeast Asia

Aspire, a Singapore-based startup that helps SMEs secure working capital, has raised $32.5 million in a new financing round to expand its presence in several Southeast Asian markets.

The Series A round for the one-and-a-half-year-old startup was funded by MassMutual Ventures Southeast Asia. Arc Labs and existing investors Y Combinator — Aspire graduated from YC last year — Hummingbird and Picus Capital also participated in the round. Aspire has raised about $41.5 million to date.

Aspire operates a neo-banking-like platform to help small and medium-sized enterprises (SMEs) quickly and easily secure working capital of up to about $70,000. AspireAccount, the startup’s flagship product, provides merchants and startups with instant credit limit for daily business expenses, as well as a business-to-business acceptance and other tools to help them manage their cash flow.

Co-founder and CEO Andrea Baronchelli tells TechCrunch that about 1,000 business accounts are opened each month on Aspire and that the company plans to continue focusing on Southeast Asia, where he says there are about 78 million small businesses, leaving plenty of room to scale (applications can be made through Aspire’s mobile app and are reviewed using a proprietary risk assessment engine before getting final approval from a human). Aspire claims it has seen 30% month-over-month growth since it was founded in January 2018 and expects to open more than 100,000 business accounts by next year.

Baronchelli, who served as a CMO for Alibaba’s Lazada platform for four years, says Aspire launched to close the gap left by the traditional banking industry’s focus on consumer services or businesses that make more than $10 million in revenue a year. As a result, smaller businesses in Southeast Asia, including online vendors and startups, often lack access to credit lines, accounts and other financial services tailored to their needs.

Aspire currently operates in Thailand, Indonesia, Singapore and Vietnam. The startup said it will use the fresh capital to scale its footprints in those markets. Additionally, Aspire is building a scalable marketplace banking infrastructure that will use third-party financial service providers to “create a unique digital banking experience for its SME customers.”

Baronchelli adds that “the bank of the future will probably be a marketplace,” so Aspire’s goal is to provide a place where SMEs can not only open accounts and credit cards, but also pick from different services like point of sale systems. It is currently in talks with potential partners. The startup is also working on a business credit card that will be linked to each business account by as early as this year.

Southeast Asia’s digital economy is slated to grow more than six-fold to reach more than $200 billion per year, according to a report co-authored by Google. But for many emerging startups and businesses, getting financial services from a bank and securing working capital have become major pain points.

A growing number of startups are beginning to address these SMEs’ needs. In India, for instance, NiYo Bank and Open have amassed millions of businesses through their neo-banking platforms. Both of these startups have raised tens of millions of dollars in recent months. Drip Capital, which helps businesses in developing markets secure working capital, raised $25 million last week.

Source. TechCrunch, Manish Singh, Catherine Shu, July 31, 2019

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U.S. smartphone financing tech startup PayJoy raises $20 million

By Anna Irrera,

PayJoy, a startup that has developed smartphone technology to facilitate access to credit in emerging markets, has raised $20 million from venture capital firm Greylock Partners, the company said on Thursday.

Union Square Ventures, EchoVC and Core Innovation Capital also participated in the round, PayJoy said. The San Francisco-based startup said it will use the funding to expand, secure more partners and develop new technologies.

PayJoy enables consumers with no bank accounts or formal credit history to purchase smartphones on installment payments and get cash loans. It does so by turning the smartphone into collateral through software that locks the phone when payments have not been made.

It believes that making smartphones more affordable can be a stepping stone toward increasing financial inclusion since more financial services are now being provided digitally.

“We’re building technology to help people carve a path into the financial system,” Mark Heynen, the company’s co-founder and chief business officer, said in an interview.

Globally, 1.7 billion adults do not have a bank account, but two-thirds of them own a mobile phone which could help them access financial services, the World Bank said in a 2018 report.

It is launching in six more countries through new partnerships with local companies, Heynen said. These include Mutual in Brazil, Waynimovil in Argentina, MyBucks in South Africa, Panacredito in the Dominican Republic, Omnipagos in Honduras and COINFIN in Colombia.

PayJoy’s technology does not make underwriting reliant on traditional credit scores, but seeks to increase consumers’ willingness to pay by taking advantage of their desire to access the phone, which in turn can help keep default rates in check, Heynen said. He declined to disclose default rates.

“Customers like it because it makes the phone pay-as-you-go,” Heynen said. “In some cases, if they decide they can’t pay, they can send in the phone and have their contract canceled.” 

Source. Reuters, Anna Irrera, May 18, 2019

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Reali Raises Additional $9M in Series B2 Funding

Reali, a San Mateo, CA-based real estate technology company focused on home-buying and selling, raised a Series B2 round of $9m.

The round, which added to the initial round of $20m first announced in July 2018, was led by Group 11 (f.k.a SGVC) with participation from existing investors Zeev Ventures and Signia Ventures.

The company intends to use the funds to add services such as escrow and title, home warranties and insurance, etc., and continue to recruit key hires across the product, engineering, real estate and marketing teams in the United States and Israel and is expanding its certified agent headcount.

Led by Amit Haller, co-founder and CEO, Reali is a full-service brokerage which leverages a team of local licensed real estate agents, an app, and technology-driven tools to offer cash back to buyers instead of commission, and cash savings to sellers thanks to flat seller fees.

This latest financing follows a rapid growth year for the company where it has more than tripled its transaction volume and has grown its headcount by nearly 40%. Further accelerating its full stack solution on top of new lending capabilities, Reali launched Reali Loans with the acquisition of online mortgage platform Lenda in April 2019.

Source. FinSMEs, Staff, May 9, 2019

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