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Challenger bank raises $400 million

SME lender Judo Bank has raised $400 million in its second-round equity raise, double its initial target of $200 million.

According to Judo Bank’s co-founder and co-CEO, David Hornery, the second-round equity raise was finalised at $400 million, meaning that the neobank’s two equity raises – totalling $540 million – represent the largest amount of private investment raised by an Australian start-up. 

The money was raised through investment from Judo Bank’s existing shareholders, including OPTrust, the Abu Dhabi Capital Group, Ironbridge and SPF Investment Management, as well as by a range of new institutional investors, including Bain Capital Credit and Tikehau Capital.

Mr Hornery commented: “The enormous support we have received from investors will further underpin our mission to transform SME lending in Australia.”

“The strength of this latest funding round clearly demonstrates the investment community’s understanding of and support for Judo Bank’s truly relationship-focused offering to small and medium-sized businesses – a proposition that has been materially lacking in the market for many years,” Mr Hornery said.

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“When combined with the wholesale debt lines secured from Credit Suisse and Goldman Sachs, and the strength of our recently launched deposit business, it adds further and substantial depth to Judo Bank’s provision of funding to Australia’s small and medium-sized businesses.”

The investment comes after Judo Bank (formerly Judo Capital) was granted a licence to operate as an authorised deposit-taking institution without restrictions by the Australian Prudential Regulation Authority in April this year.

>According to Judo Bank’s co-founder and co-CEO, David Hornery, the second-round equity raise was finalised at $400 million, meaning that the neobank’s two equity raises – totalling $540 million – represent the largest amount of private investment raised by an Australian start-up. 

The money was raised through investment from Judo Bank’s existing shareholders, including OPTrust, the Abu Dhabi Capital Group, Ironbridge and SPF Investment Management, as well as by a range of new institutional investors, including Bain Capital Credit and Tikehau Capital.

Mr Hornery commented: “The enormous support we have received from investors will further underpin our mission to transform SME lending in Australia.”

“The strength of this latest funding round clearly demonstrates the investment community’s understanding of and support for Judo Bank’s truly relationship-focused offering to small and medium-sized businesses – a proposition that has been materially lacking in the market for many years,” Mr Hornery said.

“When combined with the wholesale debt lines secured from Credit Suisse and Goldman Sachs, and the strength of our recently launched deposit business, it adds further and substantial depth to Judo Bank’s provision of funding to Australia’s small and medium-sized businesses.”

The investment comes after Judo Bank (formerly Judo Capital) was granted a licence to operate as an authorised deposit-taking institution without restrictions by the Australian Prudential Regulation Authority in April this year.

Co-CEO of Judo Bank, Joseph Healy, revealed to Mortgage Business at the time: “From day one, when we decided to build Judo, we built it with the intention of eventually becoming a bank. We believe that – notwithstanding the higher regulatory cost associated with being a bank – there are a lot of other benefits that allow you to grow and offer businesses a greater range of options than we would be able to offer if we were a non-bank lender.”

[Related: APRA authorises new bank]

Challenger bank raises $400 million
Judo Bank
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