Australian SME lender Prospa raises $41m
Prospa, an online platform that focuses on lending to Australian small and medium-sized enterprises (SMEs) has raised A$60 million ($41 million) in a funding from a string of private equity firms.
The Carlyle Group, Ironbridge Capital, Airtree Ventures and Entrée Capital - which provided the company's seed and Series A rounds - were among the participants, according to a release. The proceeds will support Prospa's expansion plans by providing loans to more SMEs.
It is said to be the largest capital-raising activity by an Australian online lender. The Sydney Morning Herald - in an article linked to from Prospa's website - described the transaction as the first securitization deal in Australian involving unsecured, online business loans. The securitization accounts for A$50 million of the total raised.
SMEs are responsible for approximately 70% of Australia's workforce and about half the value of the economy. Prospa, which was set up in 2011 and has lent more than A$70 million to date, estimates the country's emerging business finance market is worth A$10 billion.
"We have looked at many fintech businesses but Prospa stood out from the crowd as the market leader," Greg Ruddock, joint CEO of Ironbridge, said in a statement.
Financial technology is gaining traction in Australia with several banks establishing VC units as a means of identifying technology - both at home and overseas - that can enhance their product offerings. Earlier this year, National Australia Bank (NAB) set up a A$50 million fund to invest in fintech start-ups, while Westpac and AMP have similar captive units.
Sydney has also launched a hub for fintech start-ups, supported by initial funding of A$2 million from a string of Australian banks, property and technology firms in collaboration with the New South Wales government.
Carlyle previously invested in OzForex Group, an Australian online foreign exchange services provider. The company went public in late 2013, raising A$440 million.
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