By Guglielmo de Stefano on Friday 12 February 2016
Harmoney raises another $30 million of working capital.
New Zealand first and biggest peer-to-peer lender Harmoney Corp has raised $30 million of working capital, as part of the plan to expand its operations in Australia later this year. The Auckland-based company has just sold $8.8 million of new shares to Stone Ridge Ventures and P2P Global Investments, taking total funds raised to $30 million.
According to co-chief executive Neil Roberts, the company will need to raise additional funds at some stage in the future. Neil commented:
"That means for us getting as quickly as we can to cash-flow neutrality, and that's what we're focusing on right now. We've got massive aspirations for this business so I wouldn't be surprised at some stage where we raise again,"
Founded in 2014, Harmoney facilitated more than $100 million of loans through its peer-to-peer platform in its first year of operation, and is closing in on $200 million just five months later. The platform focuses on consumer loans and it provides borrowers with unsecured loans up to $35,000 and interest rates from 9.99% per annum.
In a recent interview with Neil Roberts and Brad Hagstrom (joint CEOs), and Duncan Gross (Head of Institutional Funding), Harmoney revealed its plans to launch activities across the Tasman Sea. At the moment, the firm hasn't settled on a formal launch for Australia yet, but has said that it will launch an invite-only period in the coming weeks, which will let Harmoney iron out any issues before the hard-launch later this year.
Neils said the company is focusing on maintaining strong governance and management, meeting compliance obligations. He also argues that the business needs to focus on generating positive cash flow, and being in control of its market and revenue, all features he reckons will prepare Harmoney for an initial public offering.
"We certainly wouldn't rule out an IPO, but what we're concentrating predominantly on are the ingredients a company would need to be operating at a level that it could float," he said. "I think we've done a good job so far. We need to grow and get better. At some point we really do believe the value proposition has got mass market appeal."
Although Harmoney is gearing up to become the first Australasian peer-to-peer lender, its competitors have not been idle. Indeed, while still boasting a first-mover advantage, it now faces a wave of competition with three others licensed platforms – Squirrel Money, not yet operational; LendMe, which has finally started its operations, following on from its successful licensing by the Financial Markets Authority last May; and Lending Crowd, which started operating last December.