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Grow Finance concludes $35m capital raise

by Sam Nichols5 minute read

The lender’s co-chief executive believes this will sustain growth as it aims to secure 1 per cent of the addressable market.

Grow Finance (Grow) has confirmed that it has completed an equity and capital raise worth roughly $35 million, alongside new warehouse facilities valued at circa $450 million. 

According to the non-bank lender, this deal included equity investment and financing from the Tokyo-based financial services group Nomura. 

Grow co-CEO David Verschoor said in a statement that this funding from Nomura, alongside its addition to the shareholder register, is expected to support the non-bank’s access to global debt capital markets while also assisting with “non-organic growth opportunities”. 

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“The conclusion of the capital raise allows Grow to remain agile, tech-driven and product-focussed, while gaining the capital support needed to drive the business forward,” Mr Verschoor said.

However, speaking to The Adviser, Mr Verschoor further elaborated that this partnership will also broaden Grow’s equity base, alongside the number of funding warehouses it possesses, allowing the lender to increase the depth of those funds available to SMEs, therefore “substantially improving” the capacity across its platform. 

“And in that respect, we are intending to substantially increase our distribution base so that our sales teams to further provide a much better support and service to our broker community,” Mr Verschoor said.

Mr Verschoor later noted that this breadth of funding gives Grow the capacity to deliver funding solutions which, from a broker standpoint, will allow the lender to invest in “significant amounts into the tech side of the product platform”, while also allowing it to expand its product list and improving the user experience for broker clients.

Grow founder and co-CEO Greg Woszczalski said that he believes this capital raise will help sustain the lender’s growth, benefiting brokers by enabling the non-bank to become more relevant to their customers while also diversifying products and reducing prices.

“The more we [have] to offer end customers the more relevant we are to the broker channels and the more income that a broker can make doing what they’re good at and getting word of mouth if their customers are getting the best price,” Mr Woszczalski said to The Adviser. 

“The more relevant we are to end customers, the more important we are to brokers to have an efficient income stream for themselves and want to support their clients, secondly to get their income stream that they need. 

“At a reduced credit decisioning time through the technology pieces that we’re putting in as part of that growth to the end game of trying to get 1 per cent of the addressable market.”

The conclusion of these raises follows Grow’s completion of a new equipment finance warehouse valued at $325 million, as well as other “multi-product warehouses”.

According to the lender, these previous additions have provided $125 million in further funding capacity. 

In September, the non-bank announced its floor-plan financing product, offering SMEs up to $3 million for showroom assets

[Related: Brokers drive origination growth for Prospa]

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Sam Nichols

Sam Nichols

AUTHOR

Sam Nichols is a journalist at The Adviser and Mortgage Business. His reporting has featured in a range of outlets including ABC News, SBS' The Feed, and VICE.

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