The mortgage marketplace has announced a shift in the group’s strategic direction, including breaking into SME finance and launching a new offering for brokers, following the completion of a capital raise.
HashChing has successfully completed a capital raise, led by Heworth Fund Management and Sapien Ventures. The amount of the raise has not been disclosed by HashChing.
According to HashChing CEO Arun Maharaj, funds from the raise, which was launched in December, would be used to “bring about a change in strategic direction”.
This includes the modification of its offering to mortgage brokers and breaking into SME loans while retaining its free-to-use model for consumers.
Mr Maharaj said the group’s decision would help HashChing secure a more competitive position in the marketplace, with the CEO lamenting the lack of competition in the sector.
“Mortgage brokers are a vital part of a healthy lending environment, encouraging competition and an experienced advocate on behalf of the borrower, [but] the industry is set up in a way that is very favourable to larger institutions,” he said.
“We’re changing the way HashChing works and its business model in recognition of these fundamental industry forces.”
The HashChing CEO said the fintech’s revamped business model would be more lucrative to brokers, with new features included in its $99-per-month subscription service.
“We’re opening up access to our platform for all mortgage brokers to use as either a pipeline management/productivity improvement tool, customer acquisition source or both for a single, low monthly fee,” Mr Maharaj explained.
“Our mission is to help mortgage brokers deliver great customer experiences. By helping mortgage brokers become more efficient by managing customer data better, we’ll help ensure a diverse and competitive lending landscape in Australia.”
Mr Maharaj said that while conducting market research ahead of HashChing’s strategic shift, the group identified a common issue associated with a “technology and efficiency gap”.
“Many were utilising pre-mobile systems that cannot track interactions on mobile platforms, leading to brokers often using multiple systems to procure and manage information on clients,” he said.
“This negatively impacts efficiency and increases time and costs, all of which tilt the playing field towards larger institutions with modern resourcing.
“With today’s funding round under our belt, we’re going to change that and help level the playing field for brokers.”
HashChing breaks into SME finance arena
In addition to new broker services, the mortgage marketplace has also expanded its service offering with the inclusion of SME finance. This includes business loans, car loans and equipment loans. It is hoped that the expansion will result in more brokers from other sectors (i.e. finance brokers) utilise the platform and diversify HashChing’s business offering.
For example, it is offering business loans of between $5,000 to $150,000 for between three and 12 months, as well as asset finance, finance leases and equipment loans.
However, HashChing stressed that it would not change its core offering to consumers looking to use its online platform to “find the right loan for them”.
“We’re expanding our offering and evolving with the needs of our mortgage brokers, [but] one thing we won’t lose sight of is the core of HashChing’s success so far: providing a free, transparent, on-demand service for borrowers to find competitively priced loans,” Mr Maharaj stated.
“We’ll maintain that core part of HashChing’s mission as we move on to greater things.”
The chief executive noted that HashChing’s new strategy comes ahead of the launch of open banking (set for July 2020).
“It’s an exciting time for fintech in Australia. Open banking will allow customers to switch lenders far more easily than ever before,” the HashChing CEO said.
“Finance, and in particular banking, has been notorious for relying on customer inertia to squeeze out value – not passing on the full interest rate cuts is just one good example of this practice.
“We know that open banking has created a positive outlook for both consumers and brokers, and we look forward to utilising our latest funding to be part of this positive change within the fintech space.”
HashChing’s new strategic direction follows an overhaul of the group’s leadership team in 2019.
In June last year, The Adviser broke the news that the founder and the executive team of HashChing had all left the company, with the new CEO, Arun Maharaj, taking the helm.
The founder and former CEO of HashChing, Mandeep Sodhi, along with chief operating officer Siobhan Hayden and chief technology officer Vajira Amarasekera, left the company at the end of May 2019, as did several board members of the fintech.
Charbel Kadib is the news editor on The Adviser and Mortgage Business.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.
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