Banking major's VC arm buys undisclosed slice of BrickX
Westpac's venture capital arm Reinventure has invested in BrickX, a fintech that lets investors buy fractions of a house.
The numbers behind the deal – both the size of Westpac’s stake and the price they will pay – remain undisclosed. The date the deal will close remains to be finalized.
BrickX offers investors the chance to buy a fraction of a house. It buys properties in “blue-chip” suburbs, puts them in a trust, then fractionalizes the equity into 10,000 “bricks”, which can be bought and sold on the company’s website.
According to press reports, other banking majors also considered investing in BrickX.
Australian house prices in capital cities, especially Melbourne, Sydney and Adelaide, are some of the highest in the word. This makes investing in property something of a national religion and lending against it highly profitable for banks.
Of Australia’s five largest companies by market capitalization, four are banks. This phenomenon – unique among developed countries – owes largely to banks holdings of Aussie mortgage debt.
But it also explains the success of BrickX, which is one of the fastest growing fintechs in Australia.
One of BrickX biggest investor bases is millennials. Many young Australians, who are priced out of the property market, still want to invest in property. The majority of investors on BrickX platform are under the age of 35.