P2P lender DirectMoney closes $50 million funding deal
255 Finance will purchase loans originated on the DirectMoney platform and receive equity as part of the deal.
Peer-to-peer (P2P) lender DirectMoney, Australia's only listed marketplace lender, has today closed out a funding deal with specialist finance business 255 Finance. The deal involves 255 Finance purchasing $50 million worth of loans originated on DirectMoney's platform, with an intent to increase this amount in the future.
As part of the deal, the company anticipates "significant growth in both lending volumes and operational performance". 255 Finance will receive equity in DirectMoney as part of the deal as well as options that are based upon specific hurdles being met.
DirectMoney executive chairman John Nantes says that the deal came about after a review of the company's people, strategy and structure.
"After engaging with many potential wholesale funders and varying structures over recent months, this deal was always our preferred outcome, and we’re delighted to announce it today," he said.
"We are very excited to complete this agreement with a company with the capabilities of 255 Finance, as we target the fintech opportunities in the $100 billion consumer finance market in Australia."
Nantes also says that the deal will allow the company to focus on growing the business and developing its technology rather than supporting loan funding, something it has struggled with in the past. In May last year, DirectMoney issued a statement to shareholders saying it was unable to fully fund loans.
DirectMoney CEO Anthony Nantes says that the deal validates the outcome of the transformation that the company has recently undergone.
"When we combine this agreement with our leading customer experience and the overall competitive advantage that our business model allows for, we can be confident in the future direction of the company.”