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86 400 raises $34 million, targets $2 billion mortgage book by 2021 end

86 400Australia’s smartbank – 86 400, has closed its Series A capital raise of $34 million where the new equity was raised in March, bringing its total capital to $90 million. The funds will help further accelerate product and feature development of the bank and support its mortgage book growth. The raise, led by international investment bank Morgan Stanley includes investment from an Australian superannuation fund, fund managers, high net worth individuals and family offices.

“We’re bringing products to market faster than any other bank in Australia, digital or otherwise,” said Robert Bell, CEO of 86 400. “The funding announced today means we can keep our foot firmly on the accelerator, continuing to build out both sides of the ledger and help even more Australians take control of their money.”

Since launching in September 2019, the bank has launched 7 products in 6 months and expects to deliver 3 more products by the end of 2020.

“We always said we were building a bank that puts our customers first before anything else,” commented Anthony Thomson, Chairman of 86 400. “That’s incredibly easy for a bank to say, but much harder to do in practice. I’m pleased to say we’re bucking the trend. The Big Four banks would kill to have an NPS as good as ours, and we’ve achieved that with a fraction of the team that they have. That’s because we listen to our customers and deliver on our promises. Name another bank in Australia that will actively help households save $3,000 in a year. Simply, there isn’t one.”

Focused on building a sustainable and responsible business model, the bank has a live lending product in the market. Its broker network and current mortgage book of close to $20 million are expected to grow significantly in the coming months, as 86 400 partners with further broker partners. Using smart technology, including the approach to ID verification, the Sydney-based bank is able to approve a loan without the need for paperwork or face-to-face meetings, in 2 hours.

“At our current rate of growth, we should hit 500,000 accounts on the platform in the next 12 months,” said Bell. “Of course, that will be balanced by growing the lending side of our business and we anticipate having a mortgage book of close to $2bn by the end of 2021.”

Australian neobank Judo secured $500 million in investments from the government this month to help provide loans to small businesses, according to media reports. Xinja announced the investment of $433 million by Dubai-based World Investments (WI) in the Sydney-headquartered digital bank over the next 24 months, subject to relevant approvals.

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