A successful AUD$67 million capital raise by US-based consumer finance marketplace Credible on the Australian Securities Exchange (ASX) illustrates the strong and growing appetite for exposure to fintech by Australian investors.
Credible was founded as a student loan refinancing marketplace in San Francisco in 2012 by Australian-born entrepreneur Stephen Dash.
On Friday, 8 December, Mr Dash returned to his home country to celebrate his company’s successful initial public offering (IPO) on the ASX.
The ASX says this represents the largest tech IPO in Australia this year and the second-largest ever by an overseas tech company.
One of the key backers of the Credible fund raise was FinTech Australia member Carthona Capital.
Carthona Capital principal and partner Dean Dorrell said the successful capital raise illustrated the deep understanding of, and enthusiasm for, the fintech industry among Australian investors.
“When we did our international investment roadshow for Credible, Australian investors quickly emerged as the most knowledgeable when it came to understanding and experience with marketplace businesses,” Mr Dorrell said.
“Here the investors understood what we were trying to achieve and the great potential of Credible, fintech in general and marketplaces specifically.
“This fund raise is a good example of what you can do when it comes to fintech investment here in Australia. It gives additional validity to the industry.”
Credible’s chairman is Ron Suber, former president of major US lender Prosper Marketplace and colloquially known as the ‘godfather of fintech’ in the US.
Mr Suber is also a good friend of the Australian fintech ecosystem. He was one of the headline speakers at FinTech Australia’s Intersekt Festival this year, where he spoke about the emerging “golden age” for the world fintech industry.
“I visited Australia twice in 2017 given the investment opportunities, numerous entrepreneurs and emerging FinTech companies,” Mr Suber said. “I found a very engaged and vibrant fintech industry in the country”.
The Credible fund raise follows the publication on 1 December of StartupAus’ 2017 Crossroads report, which concluded that the Australian startup capital raising market was improving, although still short of its full potential.
The Crossroads report concludes that “startups in Australia increasingly have access to abundant capital” and that “this proliferation of capital has helped Australian startups raise more funds locally.”
In support of this conclusion, it found that $1 billion was raised for new venture capital funds in 2016-17, up from $568m in 2015-16.
The Credible fund raise also follows a successful $264 million initial public offering by financial services technology platform Netwealth in November.
Credible will continue to operate in the United States – where the need for education-related lending is most pressing – however has indicated it is keen to attract Australian talent to its overseas operation.
In a blog post explaining the decision to list on the ASX, Mr Dash said: “A growing number of growth-stage tech startups are listing on the ASX and tapping public investment capital in Australia and Asia.
“The ASX is the ninth-largest stock exchange in the world, right behind Tokyo.
“There were almost three dozen tech IPOs on the ASX last year, and the exchange attracts companies from around the world, including the U.S., Israel, Ireland, Singapore, Malaysia, and New Zealand.