Spotcap Australia and Heartland Bank launch partnership

In a big week, Spotcap has launched operations in New Zealand and locked up A$20ml in funding from Heartland Bank to boost its Australian operations.

“The relationship was more than a year in the making,” says Spotcap Australia CEO Lachlan Heussler. “Within Heartland Bank they have a strong channel towards digital products and we were both speaking the same language.”

The Aussie dollar funding will allow Spotcap to diversify its capital sources and manage FX exposures more easily. For its first 19 months, funding has come from the parent company in Europe.

Spotcap is a Berlin-based fintech that offers unsecured credit and SME loans of up to $250,000. Like other online lenders, it uses an algorithm to assess the creditworthiness of would-be borrowers. Approvals, if made, take five minutes and money is debited the same day. 

Spotcap announced its expansion into New Zealand towards the end of January. Its new partner, Heartland Bank, is one of the largest Kiwi banks and the only bank listed on the New Zealand stock exchange. For Heartland, the partnership offers inroads into the larger Australian market.

“Our partnership with Spotcap highlights [our] commitment to fintech and digital banking... We are delighted to gain further exposure to online SME lending and look forward to working with Spotcap to grow its Australian operations,” Heartland CEO Jeff Greenslade said.

Spotcap’s Australian loan book grew 450 per cent last year, owing to expanded distribution and deals with broker networks. Its network now boasts over 10,000 brokers.

Despite working to a smaller economy than Germany or the UK, where Spotcap also has offices, the Australian arm of the business punches hard. Of the $90ml the company lent globally last year, $35ml was in Australia. Most borrowers are in the retail and services sector.

“The Australian business is a very important part of the global operation, as are all of our countries. We expect that all of our countries will be key contributors. There aren’t a huge amount of [fintech] lenders with international operations,” says Heussler.

Spotcap Australia has 14 staff, suggesting it is one of the larger Australian fintech companies. The company has grown at speed, and doubled its maximum loan size after meeting quicker-than-expected success last year.

While the company has established itself as a top fintech in a fluid environment the past two years, Mr Heussler sees the landscape changing and becoming more controlled by established players.

“There is always new players entering the market, but what I think has changed is that the players that are reaching scale are doing so quite quickly. My view is that there will be a period of rapid ramp up and consolidation whereby those platforms that don’t get enough traction will have to shut down. So those platforms that are well funded and have scale behind them will be the eventual winners in Australia.”

But he remains optimistic about fintech in Australia, particularly the recent regulatory developments. “ASIC and the government are moving in the right direction in terms of the noises they’re making. I think the sandbox is a fantastic initiative in allowing startups to test their products without being encumbered by heavy regulation. I think it’s a positive move.”