This was published 8 years ago
ZipMoney goes for major retailers with $100m debt fund
By Shaun Drummond
Recently listed online lender ZipMoney will go up against "interest free" lenders GE Capital and FlexiGroup via big household brands after securing a $100 million debt facility and $1 million of equity from US fund Victory Park Capital.
VPC has invested in the $100 million, the first securitisation of ZipMoney's existing loans. Its ZipMoney Trust 2015-1 will be issued by Perpetual Corporate Trustee Limited. VPC also has an option to tip in another $1 million of equity.
Larry Diamond, founder and managing director of ZipMoney.
The company, founded by former Macquarie banker Larry Diamond and Peter Gray, former chief of payday lender Australian Finance Direct, did a backdoor listing in September via Rubianna Resources.
"It gives us a large line to be able to fund ongoing loans and service the large end of the market," Mr Diamond said.
ZipMoney founders chief operating officer Peter Gray, left, and managing director Larry Diamond.
He wouldn't say which retailers they would be offering loans via, but said it is in talks with several large retailers. "It lets us compete against the incumbents like GE Capital and FlexiGroup at places like Harvey Norman and Fantastic Furniture.
ZipMoney is a "buy now, pay later" lender. It makes loans between $1000 and $10,000 for up to eight months, with interest-free periods for between three to six months.
The loans can only be used to buy goods purchased from the company's retail partners. To date, it has about 200 retailers, but these are mostly small online businesses, selling anything from breast implants, to bicycles, diplomas, TVs and trainers. One better known name is 2ndsworld.
Mr Diamond said they will look to do more in store loans, but these will all be done via their mobile app, cutting down staff time and costs associated with paper work.
It is the first investment by VPC, which specialises in investing in alternative lenders and it said it would be putting its money into other local fintechs.
"There is a clear void in the market as traditional financing sources remain reluctant to support the local fintech sector," VPC vice president, Harsh Patel, said.