Australian challenger bank 86 400 has kicked off another investment drive with the goal to raise $34m to fund expansions into the mortgage market.
The bank’s new raise comes hot on the heels of it baggin another $34m earlier this year.
The new investment initiative is a joint efforts of the neobank and Morgan Stanley, according to the Sidney Morning Herald. It hopes to close the round this half of 2020 and to use the money to fund regulatory capital.
86 400 tapping into the mortgage segment of the market is an expansion of the challenger bank’s initial push into the sector, which it launched in November 2019 when it announced a new digital home loan offering.
At the time, the digital lender posed the new offering as a smart alternative to how brokers currently submit client applications.
The news comes a year after 86 400 was awarded a full banking licence by the Australian Prudential Regulation Authority (APRA).
The challenger bank now boasts having over 225,000 accounts on its platform and is bullish about reaching 500,000 by the end of the financial year. To date, it has more than $300m in customer deposits, has processed more than $1bn in transactions, with 650,000 transactions and balance updates taking place each day.
86 400 also pledged to have delivered all of its everyday banking features, including scheduled and recurring payments, by the end of July.
“With so much economic uncertainty at the moment, it’s more important than ever Australians feel on top of their finance,” said Robert Bell, CEO of 86 400. “Our next phase of growth is going to do just that – deliver the features they wouldn’t expect from a traditional bank, which will help customers budget better, spend wiser and save more.
“And with great interest rates, and smart features like our upcoming bills prediction and Energy Switch, we’re confident we can help each customer save as much as $3,000 over the next 12 months. Australians have long called out for a smarter approach to banking, and together that’s exactly what we are building.”
86 400 is part of a wave of new Australian challenger banks that have swept the nation over the past few years. A slew of new banks are either launching Down Under or expanding into Oz. That includes challenger bank Up, Judo Bank and Xinja.
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