Tic:Toc raises $11.5m from Genworth, La Trobe Financial

The series B round was led by new investors Genworth Australia and La Trobe Financial, with existing investors including Bendigo and Adelaide Bank also contributing to the round. The latest round brings the total amount raised by Tic:Toc Home Loans to $20.5 million.

Tic:Toc, which provides an entirely digital home loan application, assessment and approval platform, said that the latest funding will be used to advance its platform, build greater brand awareness, test viability in international markets and develop an “automated assessment platform as a service” offering for partnered lenders.

The fintech’s technology uses a range of data sources to conduct property valuations and credit assessments, while also validating home loan applications against borrowers’ bank account data. Those that fail automated assessments are referred to human operators.

Tic:Toc insists that by digitising the entire home loan application process, its platform can reduce the time it takes to approve a loan to as little as 22 minutes.

Since its launch in July last year, Tic:Toc claims to have grown its loan portfolio to more than $170 million, funded by Bendigo and Adelaide Bank, and received home loan applications collectively valued at more than $1.2 billion.

Speaking of the funding round, the fintech’s CEO, Anthony Baum, said: “The funds will support the organic growth we are experiencing, but also allow us to further invest in our business for strategic growth.”

He added: “We want to relentlessly pursue and embrace new technologies to ensure Tic:Toc remains the radical and smarter way to secure home finance, and this funding allows us to do that.”

Tic:Toc is also looking to expand its team of nearly 50 to 200 by 2020.

Genworth Australia CEO and managing director Georgette Nicholas said that the mortgage insurer is “thrilled” to back Tic:Toc, which “aligns with [Genworth] looking for innovative ways to provide lenders mortgage insurance”.

La Trobe Financial CEO Greg O’Neill said that at a time when lending is under scrutiny, Tic:Toc’s approach to mortgages “will benefit the market significantly [by being] deployable and scalable”.

Many lenders have been tightening up their credit policies around expenses and benchmarking following increased regulatory oversight and scrutiny, with Commonwealth Bank recently announcing that it would be looking closely at 11 categories of expenses, and Westpac requiring borrowers to provide documentation at an “itemised and granular level” across 13 different categories.

ANZ also told aggregators that it would be making changes to its minimum living expense values, further warning brokers to ensure that an “accurate reflection of the customer’s financial position is presented”.

Fintechs like Tic:Toc, on the other hand, want to take the pain away from complying with responsible lending obligations.

Mr Baum told Mortgage Business' sister title The Adviser earlier this year that there is an opportunity for the mortgage industry to reconsider how customers are assessed for finance.

“One key flaw that’s been exposed is the failure to conduct basic checks and balances on the applicants’ household expenses. This includes instances where judgement on a customer’s borrowing capacity has been handed to a raft of questionable third parties,” the Tic:Toc CEO said previously.

“The truth is, no human judgement need enter the equation when it’s possible to check up to a year of personal expenses at the click of a button. There’s no grey area for the vast majority of cases.

“It really is that simple — and quick. For the exceptions, a combination of digital and human assessment is the most efficient and responsible way to assess a customer. Plus, automated assessment makes the whole approval process far cheaper, and faster, for a bank than the current process.”

Other companies have also been capitalising on the changing appetite of lenders, launching new products to help brokers with their expenses checks.

For example, CashDeck’s Credit Ready tool enables brokers to retrieve clients’ bank statements and provide a detailed living expense analysis, while the Opica Group’s AI-powered expenses verification engine, RELIE, aims to help “protect any broker or lender from a breach of their responsible lending requirements”.

[Related: Stricter lending criteria leaving mortgagors ‘trapped’]