The COO of digital mortgage marketplace HashChing has revealed the company is repeating last year’s fundraising exercise after failing to achieve its $5m target.
Last May, HashChing attempted to use equity crowdfunding space Equitise to raise $5m in a month and a half. Interested investors could back the fintech for as little as $250.
However, according to COO and board advisor Siobhan Hayden, the funding round was not successful.
“We believe it was a demographic issue,” she said, explaining that the younger crowds that inhabit online crowdfunding spaces are drawn to more glamorous investing opportunities than those in the mortgage industry.
The funds were intended to be used for new technology to help scale the business and enhance the size and knowledge of the team. HashChing did receive a $700,000 loan from Jobs for NSW at the end of May, reportedly to help fund 46 new hires over five years.
CEO Mandeep Sodhi dubbed the fundraising “an opportunity for the HashChing community to officially partner with us.”
Despite the crowdfunding letdown, Hayden said that HashChing has been attempting to raise funds in more traditional avenues.
“We have a lot planned for 2019,” she told Australian Broker.
While the company is not yet prepared to release details, the COO did speak of a “technology push” over the next three months with an emphasis on “improving conveyance and interface for customers and brokers.”
Despite the funding hurdles, brokers are standing by the company.
Domarina Pireh, broker and MD at The Lending Circle in Sydney, signed up nearly two years ago to generate more leads.
“When I joined, I was getting leads and I was talking to people, but I didn’t really convert anyone for the first two months. Now I’m converting between 23% to 28% of the leads I get,” she said.
“Sometimes it’s quiet. I think it’s a cycle. But without even asking for it, [HashChing] refunded a month for me once when it was super quiet.”
Among the benefits of the service, Pireh listed getting her name out on another platform, the brand’s marketing to a variety of audiences, and the reviews of her service that she is able to post on other platforms, such as Facebook.
The digital mortgage marketplace sorts brokers into three categories based on their lead to loan settlement conversion rates: Verified, Premium, and Gold.
According to Pireh “it’s not so hard” to get into Premium, but things are a bit trickier from there.
“You need a couple of loans that are all going to settle quite closely to get into the Gold. But you also need some in the pipeline because once you get to Gold, you get more leads which then reduces your conversion rate so you end up back in Premier.”
The broker spoke of a time when she was stuck bouncing back and forth between Premier and Gold.
“It was driving me crazy. But then I had a couple of settlements that ended up pushing me into the Gold and keeping me there.”
That said, Pireh has concluded that while “it can get frustrating, on a financial level, I think HashChing is worth it.”
“It’s another area that you’re able to get leads from that isn’t super expensive in comparison to paying for marketing or paying a referral source,” she concluded.