Australian Mortgage Marketplace (AMM), which is set to launch next year, initiated a crowdsourced funding equity offer to investors (including mortgage brokers), in October.
Co-founded by industry stalwarts Graham Andersen (CEO) and Kym Dalton (COO), the lender has pledged to “overhaul” the Australian mortgage market with the “biggest change since the GFC” by funding prime loans on “Australia’s first mortgage securitisation blockchain”.
The lender has come a step closer to launch after announcing that it has successfully closed its crowdfunding industry equity offer through enable funding.
An offer of ordinary shares was made primarily to the broking and finance community of Australia and received $671,000 in share applications from 89 investors, according to AMM.
Investment amounts ranged from $2,500 to $30,000 with an average investment amount of $7,539.
The offer was not underwritten, and no investment was pre-arranged.
According to the lender, the majority of interest was generated following AMM investor events and webinars, which took place across November and early December.
AMM revealed that 85 per cent of share applications were received in the three weeks following the events, while 55 per cent of share applications were received in the final seven days of the offer, and 22 per cent on the very last day.
Vast majority of AMM shareholders affiliated with broking
Speaking to Mortgage Business, Kym Dalton, chief operating officer, commented: “It feels great considering that not only have we raised the money, which is always important when you are a start up, but it gives us credibility as well because we have not only achieved our target - but surpassed it.
"We had an extensive marketing campaign, which raised our visibility, but really importantly, a part of our decision to crowd fund in the first place was to seek investment from the industry - so that brokers can participate in the development of a neo-lender," he said.
By targeting the mortgage industry, AMM said it was able to reach a crowd that would reportedly "understand the innovation and benefits" that the new company could bring.
Mr Dalton said that approximately 90 per cent of AMM’s investors were brokers or were with the broking industry.
“The success of our industry equity offer demonstrates vital support and advocacy from the broking and finance community” he said.
"This was one of our goals as well, so we are really proud of that.”
The COO said that brokers who have become shareholders in AMM can not only benefit from an “an expected good return on investment by participating, they also help to ensure the success of a broker-focused neo-lender”.
Further, AMM said that another attraction to investors was its status as an Early Stage Innovation Company (ESIC), which provides tax incentives for early stage investors.
The company suggested that the success of the raise, the large investment base and the overall size of the mortgage and finance community would make further industry equity offers a “viable ongoing proposition for Australian Mortgage and like-minded companies”.
In the meantime, Mr Dalton told Mortgage Business that the equity raise (as well as other funding) will enable AMM to complete its tech build and get it ready for launch in March 2019.
Following the launch, it is expected that AMM will undertake a “very disciplined ramp up” in volumes and pioneer the funding side of the business in the second half of the year which Mr Dalton suggested would involve a “direct-to-market plan using securitisation in a more modern, transparent and different way using AMM’s Carbon blockchain platform”.
According to the wholesale lender, its “Carbon” securitisation platform will leverage distributed ledger technology to deliver the benefits of increased transparency, security and automation.
Its “Intelligent Credit” engine aims to provide brokers and credit advisers with the ability to create “tailored home loan solutions with personalised interest rates for their clients”, and rapid approval.
[Related: ‘We’re not competing with the non-banks’: AMM]
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.