The new fintech lender – named Verteva – is headed up by two ex-Westpac Group executives, founding CEO Andrew Walker and founding CXO Chris Lumby.
The non-bank start-up aims to disrupt the home loan market, according to the founders, and will be driven by technology and customer convenience in a post-COVID world.
It will be initially focused on offering low-risk borrowers with “competitive” interest rates on their mortgage.
“The distribution of mortgages is in a yesteryear state, driven by the application forms, processes, credit policies and legacy systems of incumbent players. That process is not customer-centric,” Mr Lumby told Mortgage Business.
“We’ll use data-driven decision-making to produce a faster, frictionless customer experience when it comes to home lending.”
The start-up’s CXO (chief experience officer) noted that COVID-19 is likely to change the lending environment permanently, as borrowers begin to favour digital distribution and customer benefits over traditional, in-store banking.
“In a post-COVID environment, customers don’t want to be having multiple face-to-face meetings or be filling out long paper forms. For most, digital distribution and the customer benefits that come with it will be a key for determining who they do business with,” Mr Lumby said.
Third-party channels on the table
Mr Lumby stated that the start-up would be “open to working” with third-party partners “who share our vision to change the way mortgages are distributed for the better”.
“For progressive mortgage brokers adopting the model of the future, we’ll reward their low-risk residential mortgage customers with a sharp rate and an industry-leading time to ‘yes’,” Mr Lumby said.
He said that the company would also be “open to discussing” how the Verteva platform could be utilised in partnership with corporate brokers and aggregators.
As there is “no firm date” yet for the launch of the company’s first mortgage products, third-party partnerships are still a little way off, according to Mr Lumby.
“We are taking a ‘first things first’ approach and making sure our product is as good as it can be before moving on to channels and marketing,” he said.
“Once we have optimised our product and customer experience we will look at market entry and partnerships."
Verteva secures $33-million capital raise
Meanwhile, the start-up has announced that it has completed a $33-million capital raise, funded entirely by a single investment company, to be used on product development, business expansion and market launch.
New Zealand entity Bolton Equities was the sole investor, noting the experience and leadership provided by the Verteva team as an ideal disruptor to the banking market.
The CEO of Verteva, Andrew Walker, welcomed the partnership with the New Zealand company.
“Verteva is really pleased to have a partner like Bolton Equities with deep roots in financial services. Their backing reflects confidence in our vision, experience and, most importantly, our team,” he said.
“Many fintech companies conduct smaller, more frequent capital raises. We took a different path and found a partner who sees beyond the immediate business interruptions and values long-term opportunities for transformation in the banking and finance sectors.”
Mr Walker noted that, with the investment, Verteva will be able to accelerate its digitally based processes to align “with those of the United States and European markets”.
“Verteva will combine the best of technology, data-driven insights and cutting-edge digital customer journeys to radically reshape the home lending customer experience for the better,” he said.