Bridgit takes in $7.7 million to increase loans at the same time
Following an oversubscribed funding round, Bassin said investors OIF Ventures had been chosen for their founder-friendly approach, while Perennial Partners could help Bridgit with her IPO plans.
Bridgit, which has changed its name from TechLend, raised $50 million in venture capital debt from the Silicon Valley-based Partners for Growth fund last August.
Unlike venture capital, which gives investors an equity stake in the business, venture debt is similar to a bank loan and includes repayment of principal plus interest.
Mr Bassin said the venture capital debt allowed the company to make loans quickly and also meant that the company’s founders and shareholders were not diluted.
Despite lockdown in Sydney and Melbourne in 2021, property prices have surged. Figures from the Australian Bureau of Statistics show new loan commitments for housing rose 4.4% to $32.8 billion seasonally adjusted in December 2021.
Rather than charging interest, Bridgit charges a setup fee that starts at 1.6%. For a loan of $1 million, this would equal $16,500.
The fintech lends up to $4 million for up to six months, and no repayments are required until the loan matures or the property is sold.
Its technology engine extracts credit data, ownership data as well as information available through Australia’s expanding open banking network.
“Our clients are generally owners of existing homes,” Bassin said. “It’s not Millennials who buy now, pay later, but rather those looking to use property to further build their wealth.”
