RateSetter Australia, the only Australian P2P lender available to all Australians, has received a $10 million investment from Stratton Finance and Stratton’s 50.1% owner carsales.com; these investors will take a combined 20% equity stake in the company.
“RateSetter Australia’s innovative P2P lending model provides borrowers with lower-rate loans, delivered quickly and efficiently using our cutting-edge technology. We see a natural fit with carsales, which is one of Australia’s original online innovators - its willingness to invest in RateSetter Australia is a vote of confidence in our business model.”
Carsales.com is the largest online automotive, motorcycle and marine classifieds business in Australia and is listed on the ASX. The company has a 50.1% stake in Stratton Finance which is an auto finance specialist with one of the most popular vehicle websites in Australia.
Greg Roebuck, Carsales.com Ltd CEO, added:
“Innovation is core to everything we do and we are constantly searching for new ways to add value for our customers. As one of the country’s original disruptors, we see our investment in RateSetter Australia and the budding local P2P market as a great opportunity to deliver returns for our stakeholders.”
This deal means that Stratton will direct customers seeking loans of less than $20,000 to RateSetter Australia, helping to boost origination volumes on the platform. RateSetter Australia can also offer a much better deal for consumers. Mr. Chaloner said that for cars older than 10 years, interest rates on loans were typically about 17-19%, whereas if those loans are originated through the platform the interest rate could be as low as 10%.
Rob Chaloner, Chief Executive of Stratton, explained:
“As a technology business operating in the finance sector, we expect to see RateSetter Australia loans fill a number of gaps in the Australian automotive financing market.”
Rob Chaloner has been appointed to the Board of RateSetter Australia, with Greg Roebuck as his alternate. Mr. Chaloner will bring vast automotive and financial industry experience to the board.
Mr Foggo concluded:
“Car finance represents about 40% of personal loans in Australia, so we see this as an opportunity to change the game for Australia’s burgeoning P2P lending industry.”
It has been reported in the Australian that this deal values RateSetter Australia at A$50 million. This is worth noting as since the platform started lending in October 2014 RateSetter Australia has originated about A$1.8 million in loans. This can be compared to other businesses that have recently received funding. For example Open Energy Group recently received a US$1.25 million investment from GLIF for a 21.6% equity stake, which values the company at $5.79 million. In 2014 Open Energy lent US$1.42 million. Assetz Capital is currently raising £2 million on the crowdfunding website Seedrs. It has a convertible maximum valuation of £60 million. Since April 2013 the platform has funded £55 million in loans. Comparing the RateSetter Australia valuation with these other companies it is clear that to justify the very high valuation a lot of potential must been seen in RateSetter Australia and development the Australian peer-to-peer market in the future.
Further to this in December SocietyOne, another Australian P2P lender, received an investment from a consortium of prominent investors, which included News Corp Australia, Consolidated Press Holdings and Australian Capital Equity. This investment was rumoured to be worth about $10 million. These investments illustrate that investors see the value and growth potential of the still small peer-to-peer industry in Australia. RateSetter Australia clearly has big plans for growth as its focus on capturing the auto loan market shows. This should be a big year for P2P lending in Australia.