A Sydney-based fintech startup Verteva has got off to a flying start, closing a A$33m ($33.5m) Series A round funded entirely by Bolton Equities - the private investment vehicle of rich lister and former Auckland Blues minority owner Murray Bolton.
The funds will be used to develop and launch Verteva - which describes itself as a "digital home loan company".
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Like others in the fintech (financial services technology) market, the six-month-old company is looking to disrupt larger incumbents.
"With the vast majority of mortgages originating in face-to-face meetings, using paper-based forms and manual credit assessment processes, the home loan industry is badly outdated," its chief executive Andy Walker says.
Walker is a Kiwi ex-pat who shifted across the Tasman for senior roles at BT Financial then, after a takeover, Westpac - where he met Verteva co founder and CXO (chief experience officer) Chris Lumby.
He says the home lending industry has fallen behind the US and Europe. Verteva will have a data-driven online approach that will help close the gap.
And it doesn't hurt that Verteva's online model suits the age of social distancing.
"If you look at the mortgage application process, which is our core business," people aren't going to want to sit in a small room with a stranger for hours as they go through a 50-page application," Walker says.
"We've just had seven billion people go through a time-out a home, where they've had to do everything online," he adds.
His pitch is that even digital laggards are now used to doing everything over the web, but that traditional banks have been slow to cater to online-only applications (LawHawk managing director Gene Turner recently criticised mainstream banks for failing to adopt e-signatures, for example).
The Technology Investment Network (TIN) ranked fintech as New Zealand's fastest-growing high-tech sector in 2019, with 26.9 per cent or $241m revenue growth, driven in large part by Wellington-based Xero.
Verteva is currently housed with several other fintech's at Sydney's Stone and Chalk - a business incubator that Walker describes as an Australian equivalent to NZ's Icehouse.
The startup's aim is to launch commercially by February next year.
Lumby told the Herald that the Australia and New Zealand markets "have a lot of common denominators" and that a push across the Tasman is likely.
A big-bang raise
Verteva's raise is notable simply because it pulled in any funding at a time when many startups are facing a capital crunch.
But even in more normal times, its size would stand out.
Australasian Series A rounds are typically $10 million or less and spread about several backers.
"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," Walker says.
And it doesn't hurt that Bolton is cashed-up.
The Auckland businessman had a 50 per cent stake in a UK-based fintech, Transaction Services Group, which was sold to one of the world's largest private equity firms, Advent Capital, in a mid-2019 deal understood to be worth more than $1 billion.
Lumby said Bolton's experience with TSG was one of the primary reasons they chose the Aucklander over other potential investors, and were comfortable with the rich lister taking the whole round.
Bolton, a former Brierley Investments and Skellerup chief executive, is also known for his investments in Corporate Cabs (which he still holds) and the Auckland Blues (where he sold his 40 per cent stake back to NZ Rugby in 2018 in a reported $5m deal).