Media moguls Rupert Murdoch, James Packer and Kerry Stokes have dipped their toes into the growing peer-to-peer lending market, taking a stake in Sydney start-up SocietyOne.
SocietyOne is Australia’s first and largest peer-to-peer lender, already backed by venture capital fund Reinventure, in which Westpac has a stake.
With the announcement of this more than $10 million investment, the firm will finance new staff, additional marketing and extra balance sheet capacity, according to the Australian Financial Review.
SocietyOne co-founder Greg Symons said the company is excited to be backed by investors with such a fantastic reputation.
“We are thrilled to partner with investors of this calibre with their unparalleled track record for building successful businesses in Australia and overseas,” Mr Symons said in a statement.
James Packer endorsed the power of peer-to-peer lending on behalf of Murdoch and Stokes’ consortium.
“I am excited about the potential of technology, led by the team at SocietyOne, to help reshape the financial services industry in Australia,” Mr Packer said.
“Peer-to-peer lending is one of the global forces leading the transformation of banking by putting people, not intermediaries, at the centre of the borrowing and lending experience.”
SocietyOne reduces the cost of originating and financing loans by sharing the operating cost advantage and wide banking margin with borrowers and investors alike.
In an interview with The New Daily earlier this week, Mr Symons said “investing in peer-to-peer lending is not an asset class that will be right for all investors”, but could still be the path to accessing the “big profit pools” of banks.
“[The big banks] have traditionally captured the big spreads in the middle between high lending interest rates and low deposit rates. It’s an asset class that’s not previously been available to investors.” Mr Symons said.