(7 May 2020 – Australia) Australian SME business lender Judo Bank has surpassed a A$1 billion valuation after its latest third funding round amassed the digital challenger bank A$230 million in new capital.
The successful raising follows a A$400 million second round that twice exceeded the original target and A$140 million first round. The A$750 million in total capital raised by Judo Bank since its 2018 launch are estimated as the largest ever private investment conducted by an Australian start-up according to Judo Bank. The digital bank surpassed A$1.4 billion in deposits at the start of Q2 2020 and reinforced its capital position with a A$350 million lending facility from Citibank and A$500 million federal government funding for Judo Bank’s Structured Finance Support Fund (SFSF) and lending warehouse through the Australian Office of Financial Management's (AOFM) Australian Business Securitisation Fund.
Judo Bank has been described as reaching ‘unicorn’ status (private start-up surpassing $1 billion valuation) however the total does not exclude capital raised. The group joins other successful Australian start-ups with a plus A$1 billion valuation such as Canva and SafetyCulture.
“Part of Judo’s more recent success reflected the need for banks to form ‘real relationships’ with customers now more than ever. The support we’ve received for our third round, at an increased valuation to our second round capital raise last year, underscores the confidence and commitment our existing investors have in Judo, particularly at a time of extreme volatility in global markets, that has impacted all bank valuations” co-founder stated Judo Bank co-founder David Hornery.
“We’ve got 600 customers and 55 bankers, so each looks after around a dozen clients. It means we can proactively and consistently guide them and talk them through this period. It’s at times like these that relationships, real relationships, with people come to the fore. We’re really seeing the opportunity for really good quality small business that need help getting through this and that’s why our pipeline is only growing,” Mr Hornery added.
“We now have one of the strongest capitalised Tier One ratios in the country, and intend on rapidly growing our national footprint, and expanding the products and services we offer to thousands of Australian SMEs, whose needs have long been ignored by the major banks. We’ll be putting that additional liquidity to work where it’s needed most in the coming weeks and months” Hornery said.