In a statement to shareholders, FlexiGroup said it will invest $2 million of equity and provide a funding line to Kikka Capital, with an option to increase its investment in the future.
Kikka Capital is an online lender that specialises in providing growth capital to SMEs via a revolving line of credit of up to $100,000.
Based on the model of US business lender Kabbage, Kikka has developed a risk-based credit decision-making and pricing engine that assesses the cash flow of a business in real time to determine the loan size and interest rate, enabling the platform to approve a loan online in seven minutes.
Through its partnership with Kikka, FlexiGroup will also have access to a white-label version of the lender’s platform that it can market to customers, as well as the option of appointing a director to the board of Kikka Capital.
FlexiGroup CEO Symon Brewis-Weston said the investment represents a compelling opportunity to expand the group’s offering to commercial customers and further develop its own credit models and customer experience expertise.
“One of FlexiGroup’s traditional strengths has been our ability to accurately assess credit risk,” Mr Brewis-Weston said.
“This partnership allows us to improve risk pricing one step further by combining our leading credit [decision-making] processes with Kikka’s real time and daily cash flow assessment.
“FlexiGroup has provided asset financing to Australian businesses for more than 20 years. By partnering with one of Australia’s leading fintech lenders, we will be able to offer our established commercial customer base a new avenue to access the finance they need to grow and expand their businesses via unsecured loans.”
Kikka Capital founder and CEO David Brennan said the partnership is an opportunity to leverage FlexiGroup’s network to drive rapid loan growth.
“Kikka is one of the new and innovative lenders in the commercial market, and investment from FlexiGroup provides access to capital and the ability to commercialise our product at scale, which gives us a significant competitive advantage,” he said.