OnDeck is expanding into the Australian market via a partnership with MYOB, Australia’s leading accounting software provider.
A group of leading Australian technology investors inlduing Andrew Bassat and Jason Lenga (Seek), Gavin Solsky (Healthshare) and Cameron Poolman (Graysonline). Mr Poolman will be CEO of OnDeck’s Australian business.
As part of the partnership MYOB will provide local expertise and refer its customers, about one million business users across Australia, to its platform. OnDeck aims to start making small business loans in Australia in the second half of 2015.
"Australia represents an exciting growth opportunity. Similar to the U.S. market, in Australia we see a huge gap between small business financing needs and the availability of capital from traditional sources. There is significant unmet small business lending demand in Australia, and we believe our online platform is well suited to address the capital needs of Australian small businesses."
The OnDeck solution aims to answer a key challenge facing Australian small businesses: the ability to access working capital quickly and easily.
Mr. Poolman explained:
"U.S. small business owners have embraced the OnDeck model. We think OnDeck will prove to be the game-changer. Australia needs to give its hard working small business community a resource to help owners reach their full business potential."
OnDeck has originated more than $2 billion in loans to small businesses in more than 700 different industries across all 50 US states and Canada. Earlier this year, to continue the expansion of its business, OnDeck launched OnDeck Marketplace. This platform enables institutional investors to purchase small business loans.
Tim Reed, CEO of MYOB, added:
"We have closely followed OnDeck's success in the U.S. and are excited to bring their financing solutions not only to our customers but to the entire small business market in Australia. Our partnership with OnDeck is the latest step in our ongoing journey to making business life easier. Building on our successful cloud based solutions, and partnering directly with other pioneering organizations such as OnDeck, we will ensure tight integration with MYOB products such that we offer a truly connected service. This is all underpinned by significant and successful R&D investments in cloud based platforms."
The four big Australian banks have 91% of the market share in the SME lending space, a market worth about $150 billion. We have been closely monitoring the development of the alternative finance space in Australia, and it is growing at a rapid rate. Many of the platforms are targeting the SME lending space. For example, a new platform for SMEs launched last month, Kikka Capital, which is powered by the US firm Kabbage. ThinCats Austalia launched in early December 2014 and is a marketplace lending platform for funding SMEs. Also platforms such as InvoiceBid are moving into the invoice financing space. However, it is still early days for the alternative SME lending space and OnDeck will provide a much needed additional source of financing for SMEs.