Alternative finance platform OnDeck is venturing beyond U.S. borders to broaden efforts to increase small businesses’ access to working capital, and the company has chosen Australia as its first non-North American market.
Reports released Wednesday (April 15) revealed that OnDeck had raised about $23 million to launch operations Down Under thanks to a collaboration with software vendor MYOB, which will be used as a distribution channel for SME loans. OnDeck’s introduction to Australia, reports said, will also introduce new competition for the nation’s mainstream banks.
OnDeck said it plans to launch lending operations in Australia within the second half of this year. Speculation surrounding the company’s plans to launch in the nation have been circling for several months, and chatter grew when the firm revealed a partnership with an Australian bank. “We’re not going to be anywhere near the size of a big bank, but as a rule of thumb when I look at the U.S. and Australia I think of about a 12th of that size and we have got to get quickly to that level of maturity,” said Cameron Poolman, who was chosen to head OnDeck Australia as its chief executive. Poolman added that his focus now will be to replicate the success OnDeck has seen in the U.S. in recent years.
OnDeck will introduce a new wave of alternative finance to Australia, though the industry is not entirely novel to the nation. Domestic competitor Moula is reportedly expecting the arrival of OnDeck, telling reporters that the firm will be Moula’s first offshore rival.
OnDeck Australia is 50 percent owned by OnDeck, 30 percent owned by MYOB and the rest owned by private investors.
The launch of OnDeck Australia coincides with separate reports, released Tuesday (April 14), that OnDeck Capital has struck a partnership with fellow lending platform Prosper Marketplace. The two plan to collaborate on increasing visibility of financing options for small business owners.
The alternative lending service has played a major role in the emergence of a new way for small businesses to access working capital in the last few years. Its high-profile IPO late last year made headlines for raising $200 million, a debut that valued the firm at about $1.8 billion, according to reports.