Below is an excerpt from Business Review Weekly.
Westpac Banking Corp’s new venture capital fund has taken an equity stake in Sydney-based peer-to-peer lender SocietyOne, in a deal that reflects the coming of age of online lending in Australia and the desire of the major banks to get closer to disruptive start-ups.
Reinventure Group, the new Westpac-funded venture capital manager, has invested $5 million in Australia’s first peer-to-peer lender, whose small loan book is growing rapidly. By matching borrowers and investors through web-based technology, P2P lenders can offer both more attractive interest rates than banks.
Westpac’s investment is believed to be the first equity stake a bank has taken in P2P anywhere in the world (either directly or through a fund), and is intriguing given that the P2P business model has been built on the failure of banks to use technology to enhance the borrowing experience, or to offer risk-based pricing to customers. This has helped make personal lending one of the most profitable areas of banking.
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