Skybound Capital, a global wealth management firm with offices in London and Hong Kong, has acquired a majority stake in Australian fintech company Fair Go Finance for A$20 million ($13.6 million), according to a statement.
Skybound takes a 60 per cent stake in Fair Go Finance from Frankfurt-listed MyBucks SA, which acquired a 75 per cent stake in the online loans provider in 2017 for A$3 million ($2 million).
Founded in 2008, Fair Go provides fast online credit and personal loans to its customers. The company said it has seen steadfast performance over the past five years due to Australia’s vibrant fintech sector.
The online loans provider doubled its size in 2018 after it acquired the Australian operations of a global competitor, CapFin Money. The acquisition created one of the largest non-bank personal loan lenders in the Australian small loan market back then.
Skybound Capital, which provides a diverse range of investment products for family offices, private clients, advisors, and institutions, said the acquisition of a 60-per cent stake in Fair Go gives the company the opportunity to grow its exposure in the Australian market.
“The partnership brings new opportunities for us locally, with investments in debt and equity, and the implementation of a new business strategy leveraging the understanding of the Australian consumer credit market,” said Jeremy Thorpe, Managing Director and CEO, Skybound Capital Australia
For the Mandurah-headquartered Fair Go Finance, the acquisition will give the business the means to expand into new markets, build upon the existing innovations in technology, and continue to evolve the company in a competitive market.
“This investment will enable us to pursue new avenues of finance technology and growth opportunities quicker given Skybound’s access to global capital markets,” Fair Go Finance CEO Paul Walshe said.
The acquisition comes at a time when more Australians are ditching the big banks and taking out personal loans with other lenders. According to a November 2018 data from the Australian Bureau of Statistics, banks in the country continue to lose market share from their dominant days back in 2010.
Big banks account for 72 per cent of the total personal loans market in November while smaller non-bank lenders doubled their share from 14 per cent to 28 per cent in the last eight years.
Online lending has also gained traction in some parts of Asia as a huge chunk of the region’s population remains unbanked. In the Philippines, however, the Securities and Exchange Commission ordered this month the shutdown of 30 online lending apps that lack permits to operate and have allegedly been unreasonable and abusive to their borrowers.