Crowd2Fund Target Australian Market Through FinTech Bridge Launch
24th April 2018
Leading P2P lending platform Crowd2Fund are launching an Australian office by becoming one the first UK-based companies to utilise the new ‘FinTech Bridge’ between the UK and Australia.
The Enhanced Cooperation Agreement, signed in March 2018 between the FCA and the Australian Securities and Investments Commission (ASIC), will make it easier for regulated FinTech companies in both Australia and the UK to start trading in either market.
Key benefits of the Bridge include the speeding up of company licensing between the two territories, as well as more strategic collaboration between the FSA and ASIC in order to grow the respective markets of each country.
Michael Ward, the Director General for DIT Australia, says that the FinTech Bridge couldn’t have come at a better time.
“The FinTech Bridge, as a tool for ease of market-entry, is the result of a very strong demand from UK and Australian companies to access each other’s markets. It’s great to see the hard work of the FCA, ASIC, Department for International Trade, Australian and HM Treasuries pay off by the speed of which companies are now using this device to further grow their businesses.”
Crowd2Fund will begin utilising the Fintech Bridge early this summer. This will allow the platform to access Australia’s thriving FinTech ecosystem, which, from a lending perspective, has a potential reach of 2.2 million businesses.
Crowd2Fund are in the process of submitting their licence application to the Australian regulator, have set up an office in Sydney, recruited local investors, and are modifying the platform to allow trading within Australia.
Initial pre-launch activity includes collaborations with the Department of International Trade, with Crowd2Fund being invited to a number of events in Australia to promote the Fintech Bridge.
Rob Older, who has worked with Crowd2Fund since the firm was founded in 2014, has been appointed to head up the Australian business in its early stages. While Crowd2Fund go through the processes of obtaining a regulatory licence to operate, Rob and his team are sourcing the initial businesses seeking funds and will build the investor community.
Crowd2Fund’s first business for investors in the region is called Barefoot Conservation, a social enterprise dedicated to removing plastic waste from the oceans around Indonesia. The company is seeking an initial raise of just under A$200,000.
A New Market Down Under
Launching in Australia is the market of choice for international expansion due to the ease of penetration via the FinTech Bridge. The regulatory and cultural alignment makes it an ideal initial market to enter.
This will provide Crowd2Fund with a great opportunity to gather experience operating a FinTech platform in a foreign market, making more complex markets, like the United States, more easily accessible.
Crowd2Fund believe an increase of 30% in revenue from the Australian market is achievable within the first year. It also offers investors the opportunity to make international investments.
Chris Hancock, Crowd2Fund chief executive, hails the launch of the FinTech Bridge as being a major achievement and believes that it is indicative of wider opportunities for a post-Brexit UK.
“It’s fantastic that the governments recognise the importance of FinTech and the alignment of regulation to allow us to trade easily in both markets. The Australian market has close ties to the UK and it makes perfect sense to work with them as an initial market before expanding further afield.”
“Australia is one of the most prosperous and fast-growing FinTech markets globally with a vast pool of talent and we are looking forward to exploring the new and exciting opportunities that this market presents.”
Crowd2Fund will be launching their Australian operations by engaging with InDebted, a New South Wales-based debt collection software company. The company started in 2015 and are backed by WestPac, one of Australia’s leading banks.
InDebted uses artificial intelligence and digital communications methods, such as cookie tracking and WhatsApp messaging, to increase the effectiveness of debt recoveries. Crowd2Fund is their first client in the UK and are assisting with getting them established within the UK’s financial sector.
“We are working with InDebted as it is an amazing piece of technology and completely revolutionises debt recovery,” says Hancock.
“This is a great example of a collaborative relationship that will support the growth of the economy in both markets as well as the FinTech sector.”
Alongside having one of the most sophisticated and developed FinTech ecosystems, Australasian countries already procure £2.1 billion of financial and business services from the UK.
Support provided by both the regulators and trade bodies will make scaling up in Australia a real possibility. One example of this is Innovate Finance and FinTech Australia (the former of which Crowd2Fund is a member of) utilising reciprocal membership agreements across their respective stakeholders.
Utilising the FinTech Bridge is in line with the Crowd2Fund’s current strategy of taking their successful UK model and rolling it out to a number of new territories, with a long-term goal of reaching a £1 billion valuation by 2022.
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