P2P to be "key player" in mortgage market

by Madison Utley11 Dec 2019

Peer-to-peer lender Funding.com.au has raised $3.7m in a Series A funding round from local venture capital fund Equity Venture Partners (EVP), an important step in its quest to establish its legitimacy within the Australian market.

The fintech has sought to position itself as a reputable non-bank mortgage lender in the short-term first-mortgage market since its establishment in 2015 by mortgage lawyer, Jack O’Reilly.

“In the same way Prospa and Moula have brought efficiency and trust to small business loans, Funding.com.au is now bringing that experience to non-bank secured loans,” said Daniel Szekely, EVP investment director, who will be joining Funding.com.au’s board of directors.

“With historically low-interest rates and banking regulations making it more difficult to obtain credit, we are simultaneously providing investors with access to secure, first mortgage loans, and borrowers with access to capital in a trusted environment.

“We believe Funding.com.au is well placed to become a key player in Australia's $1.8 trillion mortgage market.”

For borrowers, the fintech streamlines the loan experience, eliminating the paperwork, lengthy delays and run ins with unsavoury lenders. For investors, it provides direct access to short- and medium-term mortgage returns – “a rewarding asset class that has traditionally been guarded by the banks and sophisticated investors”, according to founder and CEO Jack O’Reilly.

“Using our platform, anyone can ‘be the bank’ and invest with an opening balance of $5,000,” he explained.

“We are innovating in a space that is desperate for change. Our platform is the first non-bank lender locally to introduce a true peer-to-peer platform for retail investors in Australia, and to be fully licensed for consumer credit.

“Unlike many other prominent Australian peer-to-peer lenders offering unsecured investments, our investments are backed by first mortgages over Australian real estate.”

Since its launch, Funding.com.au has returned 100% of all capital and interest while also growing its loan book five times over in the last 18 months.