FlexiGroup makes a move on fintech
Fintech lender Kikka Capital is the latest to partner with an Australian financial service provider.
Diversified financial services group FlexiGroup has announced it will be acquiring a minority interest in Kikka Capital, an online non-bank lender that provides funding to Australian SMEs. The move is in line with many recent announcements of partnerships between Australian financial service providers and fintech companies. Flexigroup has agreed to invest $2 million of equity and provide a funding line to Kikka, with an option to increase investment in the future.
Kikka uses a risk-based credit decision and price engine that assesses the cash flow of a business in real time. Using this data, it determines the loan size, which comes as a revolving line of credit up to $100,000, and an interest rate. Kikka currently has the fastest origination process in the market and can approve a loan in seven minutes.
FlexiGroup's chief executive officer Symon Brewis-Weston said the investment was an opportunity to expand its offerings to commercial customers as well as continue to develop its credit models and customer service experience.
"One of FlexiGroup's traditional strengths has been our ability to accurately assess credit risk. This new partnership allows us to improve risk pricing one step further by combining our leading credit decisioning processes with Kikka's real-time and daily cash flow assessment," he said.
The partnership will allow FlexiGroup to have a white label version of the Kikka platform it can market to new and existing customers.
"We are in the unique position to be able to benchmark this, and other, credit models, with our own established ones and create best-of-the-breed models using the latest technology."
As with all fintech partnerships, there are mutual benefits. Kikka Capital founder and chief executive officer David Brennan noted the opportunity for Kikka to supplement its existing online-only distribution channels and drive more rapid loan growth.
"Kikka is one of the new and innovative lenders in the commercial market, and investment from FlexiGroup provides access to capital and the ability to commercialise our product at scale, which gives us a significant competitive advantage," he said.