TechLend has secured the funding from venture debt and growth credit fund Partners for Growth, which has also backed other Australian start-ups such as business lender Prospa and furniture company Koala.
The lender, which was founded by Aaron Bassin, former head of strategy at ASX-listed lender MoneyMe, and Nick Jacobs, the director of a Sydney-based brokerage Mortgage Works, recently debuted its first product, an interest-free bridging loan with same-day pre-approval.
The company reported that since then, its loan book has doubled in the past month.
TechLend co-founder and chief executive Aaron Bassin stated the new funding will allow the fintech to compete directly with traditional lenders, as it seeks to offer an alternative for customers who “otherwise struggle to access short-term loans”.
“The investment is going to provide the necessary runway to TechLend for the next 12 to 18 months, in what will enable us to provide fast bridging loans to home buyers,” Mr Bassin said.
TechLend’s offering is expected to disrupt the current gap in the market for bridging loans, Mr Bassin previously told Mortgage Business sister title The Adviser, as the product’s short time frame and relatively high origination costs have made traditional lenders wary.
The bias has also been extended to brokers, because the banks will claw back commissions if loans are repaid within 12 months, he said.
But there is an opportunity to be captured, with people increasingly moving to regional areas and looking to work remotely.
“In the next five years, just in downsizing, there’s 1.6 million households planning to downsize and they don’t have a solution that is available to them,” Mr Bassin said.
“And so downsizing, relocating and maximising property values is the market we’re after.”
Partners for Growth (PFG) managing director Jason Georgatos added his firm was pleased to assist TechLend on its journey, and to get in on a “near untapped area of the Australian lending market”.
“TechLend’s vision fits well with PFG’s strategy of backing global fintech disruptors,” Mr Georgatos said.
The company received its seed investment from Matt Leibowitz, CEO and founder of investment platform Stake.
Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.