FlexiGroup has taken a minority stake in Australian small business lender Kikka Capital.
FlexiGroup – which is listed on the ASX 200 – is a pioneering point of sale lender. Its consumer and business facing products are offered by over 16,000 merchants across Australia, and the company boasts a borrower base of more than 700,000 in number. Kikka will now be able to plug into this network.
FlexiGroup has invested $2m in the equity of Kikka, and will also be providing a funding line to the platform. FlexiGroup has the option to appoint a Director to the Kikka Capital board. Kikka provides growth capital to SMEs in the form of a revolving line of credit, of up to $100,000 in size. The Kikka platform is powered by US-based Kabbage, which has lent over US$1.6bn to more than 100,000 businesses to date, and which also has a presence in Canada and the UK.
Kikka has what FlexiGroup calls “the fast origination process currently in the market”, with the capacity to approve a loan online in just 7 minutes. Under the terms of the new partnership, FlexiGroup will be able to make use of a white label version of the Kikka platform. FlexiGroup CEO Symon Brewis-Weson commented on the deal:
“One of FlexiGroup’s traditional strengths has been our ability to accurately assess credit risk. This partnership allows us to improve risk pricing one step further by combining our leading credit decisioning processes with Kikka’s real-time and daily cash flow assessment.”
Kikka Capital was last in the headlines in March, after striking a partnership with Acquire, Qantas’ SME rewards programme. Qantas is Australia’s largest domestic and international airline. Acquire is aimed at helping small businesses to save money and reward employees. The Kikka partnership was designed to reward small business owners for taking out lines of credit. Acquire members will be able to earn 10,000 Acquire points on eligible loans of $10,000 or more. Acquire points can be converted into Qantas points – which can be spent on flight deals and other business benefits.
Kikka clearly sets great store by such alignments. The company now has strategic partnerships in place with FlexiGroup, Acquire, eWay and the Small Business Association of Australia. David Brennan, Founder & CEO of Kikka Capital, offered his thoughts:
“Our partnership with FlexiGroup is important as it represents an opportunity to supplement Kikka’s existing online-only distribution channels. We see this as a great opportunity to leverage FlexiGroup’s network to drive more rapid loan growth.”
“Kikka is one of the new and innovative lenders in the SME market, and investment from FlexiGroup provides access to capital and the ability to commercialise our product at scale, which gives us a significant competitive advantage.”