Kikka, an Australian online lending platform with a model similar to Kabbage, has received an equity investment from FlexiGroup Limited (ASX:FXL). FlexiGroup has purchased a minority stake for $2 million with an option to increase its ownership in the future. Flexigroup will also provide a funding vehicle for Kikka to leverage.
Kikka is a small business lender that uses a risk-based credit process to provide a revolving line of credit of up to $100,000. The company signed a licensing agreement with Kabbage in 2015. Kikka is described as the fastest origination process in the market and may approve a loan online in just 7 minutes.
The deal with FlexiGroup also means they will have access to a white label version of the Kikka platform it can market to existing and new clients.
Flexigroup CEO Symon Brewis-Weston described the agreement as a compelling opportunity to expand their reach in the SME market while continuing to build out its own credit model and user experience.“One of FlexiGroup’s traditional strengths has been our ability to accurately assess credit risk. This partnership allows us to improve risk pricing one step further by combining our leading credit decisioning processes with Kikka’s real-time and daily cash flow assessment,” said
“One of FlexiGroup’s traditional strengths has been our ability to accurately assess credit risk. This partnership allows us to improve risk pricing one step further by combining our leading credit decisioning processes with Kikka’s real-time and daily cash flow assessment,” said Brewis-Weston. “We are in the unique position to be able to benchmark this, and other, credit models with our own established ones and create best-of-breed models using the latest technology.”
FlexiGroup has been providing asset-backed finance to Australian businesses since 2009. They will now have the technology to provide unsecured loans.
“Our partnership with FlexiGroup is important as it represents an opportunity to supplement Kikka’s existing online-only distribution channels,” said Kikka Founder & CEO, David Brennan. “We see this as a great opportunity to leverage FlexiGroup’s network to drive more rapid loan growth. Kikka is one of the new and innovative lenders in the SME market, and investment from FlexiGroup provides access to capital and the ability to commercialise our product at scale, which gives us a significant competitive advantage.”
FlexiGroup will also pick up a board seat with Kikka as part of the agreement.