Alternative lending player Skippr has landed new funding, a sign that investors are still supportive of the industry after concerns were raised over alternative finance’s high interest rates.
Reports in the Australian Financial Review Monday (Aug. 6) said Skippr raised $11.8 million in debt and equity financing from SocietyOne and Andy Taylor, co-founder of Douugh. Formed more than two years ago, Skippr offers an invoice financing solution to small businesses, as well as a cash flow forecasting solution for borrowers.
In an interview, Co-Founder Patrick Crivelli said that Skippr operates in a “slightly different part of the market” than Prospa, another Australian alternative lender that postponed its planned Initial Public Offering (IPO) after backlash against its high interest rates. Following that criticism, six alternative lenders, including Capify and OnDeck, signed a “code of lending practice,” vowing to provide small business borrowers with transparent pricing and other information about loan products and practices.
“We compete with them on some deals, but we’re not necessarily head-to-head,” Crivelli said of Prospa.
According to reports, Skippr offers financing with annual interest rates between 14 and 15 percent, with a drawn down fee of about 1 percent, positioning it somewhere between secured loans and unsecured lender rates. So far, the company has secured 260 business borrowers on the platform, as well as 110 accountants and bookkeepers.
With the new funding, Crivelli told reporters that Skippr will continue focusing on growth and finance more small businesses.
“For the next 12 months we are going to deploy around $40 million of invoice financing and get most of the debt facility out the door,” said cofounder Alistair Lamond. “The small businesses aren’t coming to us for one-off loans. It’s a revolving cash flow facility. The equity will go towards growing the team and building more of the technology.”