Australian neobank, 86 400, has closed its Series A capital raise. $34m of new equity was raised in March, bringing its total capital to $90m.
The funds will help further accelerate product and feature development and support mortgage book growth.
The raise, led by international investment bank Morgan Stanley, is one of the largest Australian fintech Series A rounds to date and includes investment from an Australian superannuation fund, fund managers, high net worth individuals and family offices.
“We’re bringing products to market faster than any other bank in Australia, digital or otherwise,” said Robert Bell, CEO of 86 400.
“The funding announced today means we can keep our foot firmly on the accelerator, continuing to build out both sides of the ledger and help even more Australians take control of their money.”
“To date, 86 400 has more than 170,000 accounts on its platform and sees more than 350,000 transactions and balance updates each day.
“At our current rate of growth, we should hit 500,000 accounts on the platform in the next 12 months.
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“Of course, that will be balanced by growing the lending side of our business and we anticipate having a mortgage book of close to $2 billion by the end of 2021.”
Since launching in September 2019, 86 400 has launched seven products in six months and expects to deliver a further three by the end of 2020. It is the only retail neobank in the Australian market to offer home loans and shared accounts (currently in pilot).
We don’t think it’s unreasonable to see ourselves as Australia’s most advanced neobank,” said Robert Bell.
“That’s down to the fantastic work of the 86 400 team and a single-minded focus on doing what’s right for the customer, every second of every day.
“Our customers love that we’re more than just a great savings rate. Of course we do the banking basics extremely well, we’ve had real-time payments and Apple and Google Pay since day one, but we’re also giving them products they would never expect from a bank; tools like account aggregation and Energy Switch that actively help customers save more and budget better. All of us want to feel more in control of our finances, particularly in difficult times like these, and we’re delivering smart banking products which do just that.”
86 400 customer satisfaction
More than 7,000 pieces of feedback have gone into developing the 86 400 products and experiences already in market. This helps explain why the smartbank has rapidly grown customers, advocacy and engagement. Its Net Promoter Score (NPS), which is used to measure customer satisfaction, is a market-leading 46 compare this to the Big Four banks, which have an average NPS of just 2.1.
“We always said we were building a bank that puts our customers first before anything else,” commented Anthony Thomson, Chairman of 86 400. “That’s incredibly easy for a bank to say, but much harder to do in practice. I’m pleased to say we’re bucking the trend. The Big Four banks would kill to have an NPS as good as ours, and we’ve achieved that with a fraction of the team that they have. That’s because we listen to our customers and deliver on our promises. Name another bank in Australia that will actively help households save $3,000 in a year. Simply, there isn’t one.”
Sustainable, responsible, business model
Focused on building a sustainable, responsible business model from the beginning, 86 400 is the only new retail banking entrant to have a live lending product in market. Its rapidly expanding broker network and current mortgage book of close to $20m are expected to grow significantly in the coming months, as 86 400 partners with further broker partners.
Brokers and borrowers are drawn to 86 400’s competitive mortgage rates and rapid approval process. Using smart technology, including an innovative approach to ID verification, 86 400 is able to approve a loan – without the need for paperwork or face-to-face meetings – in as little as two hours.
Investors in 86 400’s Series A capital raise were impressed by the bank’s smart proposition, early customer traction, combined with its market-leading technology, products and features. In addition to the capital received to date, the business has developed a pipeline of local and global investors who are keen to participate in future rounds and continue to grow 86 400’s shareholder base.
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