Alternative lender Prospa has raised new venture capital that comes with a prestigious label for the company.
Reports Wednesday (Feb. 22) said Prospa secured A$25 million (about $20 million) from AirTree Ventures. The Series B round is the largest-ever venture capital investment into an Australian FinTech startup, according to reports.
Existing backers also participated in the funding, reports said. According to AirTree Ventures Managing Partner Craig Blair, the investment round represents "a coming of age in the FinTech sector in Australia."
Beau Bertoli, co-CEO of Prospa, told reporters that the alternative SME lending space is likely to grow by $20 billion over the next five years.
"Four years ago, non-bank lender brands were foreign to many small business owners, but today we are a very accepted way of accessing finance, and Prospa has deep brand recognition across the small business market," he told the Financial Review. "A lot of small businesses have an affinity with us, and we will use this capital to continue to build the brand further and become a leading lender."
Reports said the company is currently testing a new service, Invoice Now, to provide invoice financing. The firm is also continuing its work with fellow Australian SME FinTech Xero and will look to introduce new B2B services in the near future.
Last year, Prospa also struck a deal with SME accounting company Reckon to provide small business financing through its platform.
Australia has created an environment prime for SME finance disruption after regulators began to question small business loan limits deployed by the nation's top traditional banks. The Small Business and Family Enterprise Ombudsman Kate Carnell said in December that the process of small business lending and understanding the conditions of a traditional bank loan are a major challenge for small business owners.