Invests in peer-to-peer lending platform FundX to support local innovation
Sydney, Australia, 13 October 2015 — Collaborate Corporation (ASX:CL8), the operator of online peer-to-peer businesses DriveMyCar and MyCaravan, today announced a big move into the multi-billion dollar fintech space, with an investment in SME lending platform FundX.
FundX, the recently launched startup backed by Blue Chilli, is a peer-to-peer invoice discounting and SME lending platform that offers a fast, simple and efficient way to fund business cash flow gaps by advancing payments based on outstanding invoices. The funding decisions are based on real time trading information provided by linking the business accounts via Xero or MYOB.
According to the Reserve Bank of Australia, as of June 2015, loans to SMEs (for loans less than $500,000) totalled over $120 billion. Furthermore, according to the Factoring and Invoice Discounting Association, invoice and factoring turnover is over $60 billion per annum with over $7.5 billion outstanding as at June 2015.
Collaborate’s initial investment of $150,000 for an 8.33% equity stake in FundX, makes the ASX-listed company the largest investor in the recently completed round. In return, FundX will be able to license Collaborate’s PeerPass verification platform to support its funding decision making processes, enabling it to cost-effectively assess a range of trust and reputation criteria.
FundX plays a valuable role in allowing investors to directly fund high-growth potential businesses which are constrained by cashflow. Establishing trust between investors and SME borrowers is key to unlocking capital to support business growth.
Collaborate’s CEO, Chris Noone will join the FundX board as a non-executive director.
“The local SME finance market is worth over $120 billion but very poorly serviced. ABS data suggests that access to finance is the most common barrier to innovation, affecting around 400,000 businesses locally. It’s a big problem that requires smart solutions,” Noone said.
“This is a great opportunity to disrupt the highly profitable yet inflexible and antiquated banking sector. The peer-to-peer nature of FundX enables investors to directly fund growing businesses and share in their success.”
“We are very excited to be involved with FundX in exploring peer-to-peer and fintech opportunities in an SME market that is worth over $120 billion in Australia. FundX is able to leverage Collaborate’s peertopeer and marketplace skills and knowledge, while we simultaneously address significant opportunities in the fintech sector.”
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About Collaborate Corporation Limited
Collaborate Corporation Limited is listed on the Australian Securities Exchange (ASX:CL8). It is Australia’s leading listed company focused on ‘collaborative consumption’, ‘peertopeer’ or ‘sharing economy’ businesses. Collaborate currently has three core business segments: www.DriveMyCar.com.au Australia’s leading peertopeer car rental business; www.MyCaravan.com.au Australia’s leading peer-to-peer caravan rental business and www.Rentoid.com, one of Australia’s leading peer-to-peer ‘rent anything’ platforms. Through our proprietary trust and reputation platform, www.peerpass.com.au, we create ‘trust’ between individuals and make it possible for people to safely transact with each other in the sharing economy
FundX, www.FundX.com.au is a peer-to-peer invoicing discounting and SME lending platform that offers a fast, simple and efficient way to fund business cashflow gaps by advancing payments based on outstanding invoices with the click of a button.