Australian non-bank finance startup Bridgit has raised $7.65 million in a new funding round, as the startup seeks to fill the void left by big banks unwilling to offer bridging loans to buyers.
The company aims to transform access to bridging home loans using proprietary technology that allows customers to get same-day, if not same-time approvals.
Aaron Bassin, managing director of Bridgit, said he had “tremendous confidence that our product will change the way people finance their next home”, in a landscape that has seen waves of banks closing their doors to borrowers since the start of the pandemic.
One of Australia’s largest bridging loan providers, Adelaide Bank, recently announced that it will now only provide loans to existing customers.
The Sydney-based startup, which saw $400m in loan applications last year, saw its latest equity funding round co-led by Australian tech VC OIF Ventures and ethical investor Perennial Partners .
Recently rebranded as “TechLend,” Bridgit has also secured backing from Silicon Valley Partners for Growth’s debt funding facility, which has previously backed fintechs including Zip.
The new funds follow a $50 million venture capital debt from Partners for Growth in August.
The company was founded in 2021 by Bassin, a former chief strategy officer at MoneyMe, and mortgage broker Nick Jacobs, who was frustrated with the limitations of traditional home loans.
At its core, Bridgit gives its clients access to the value of their property, so they can buy their next home without selling first.
Using software that leverages real estate data and assesses risk, the startup is able to approve loans within hours and days, giving landlords quick access to cash not traditionally available through the big banks.
Recent figures from the ABS show that new housing loan commitments increased by 4.4% to a record value of $32.8 billion (seasonally adjusted) in December 2021. As a result, non-bank lenders offering financing solutions are gaining acceptance, the company said.
Bridgit says it will use the recent cash injection to improve its technology, with major investments in increasing product capabilities, including the ongoing development of its property data analytics software.
Bassin said strong investor demand in this latest cycle was a clear vote of confidence for the future.
“This funding gives us the opportunity to strengthen our team and further develop a thriving corporate culture that is poised to disrupt the industry. Support from strategic investors helps us continue to scale our technology across Australia,” Bassin said.
“We also continue to build relationships with our broker partners who have historically struggled to support bridge loan borrowers through traditional lending avenues.
“We are committed to serving homeowners who want more flexibility to use their home equity for the next stage of their life,” he said.
Ryan Sohn, portfolio manager at Perennial Partners, said the oversubscribed funding round was proof that Australia’s lending industry was “ripe for disruption”.
High house prices and a rising ratio of mortgage debt to GDP were accelerating demand for innovation in alternative financing models, he said.
“We are thrilled to support Bridgit in its mission to provide owners with a better alternative and we look forward to seeing them continue to innovate and grow in the market,” Sohn said.