From fringe to force: 25 years of Pepper Money

Q. How did Pepper start?

Pepper was founded by Mike Culhane in 2000. At the time, he was based in the UK and realised that in Australia, there were limited options for customers outside of the banks. There were only a handful of non-banks 25 years ago.

He started the company as Pepper Home Loans. It was there to serve the purpose that still rings true today: to give access to everyday Australians, whether that be a key to their first home or their first investment property. Now it has a broader dynamic, helping borrowers with their first car or a fleet of vehicles for their business.

Q. What’s the story behind the name ‘Pepper’?

There is a tale behind the brand being based on the old spice trade from the Ottoman Empire, where spices and herbs were used as currency across the world. It was something that everyone valued. That’s what Pepper wanted to echo – it’s all about creating financial inclusion.

Now, others may tell you it was just a name on a shortlist of company names and sounded appealing – but I think the spice trade is the real story!

Around 2016, we dropped the Home Loans component and rebranded with Pepper Money. Pepper is who we are, Money is what we do.

Q. What have been Pepper’s biggest milestones?

There are many. From our very first loan, to the GE acquisition that more than doubled the business overnight, to the launch of near prime, which created a whole new segment in the market. Previously, borrowers were either prime or specialist – there was no in-between. Pepper was the first to go to market with near prime because we recognised that many borrowers were being turned down by the banks’ and only had the option of taking a massive hit on rate to access specialist loans. So we filled that void in market.

White label, which we started around 2006 and relaunched in 2011, was another big one. It now represents more than 40 per cent of our flow today and has helped aggregators build their brands.

We’ve also assisted more than 65,000 self-employed customers with alternative documentation loans and overall helped 570,000 Australians access finance. That’s all been funnelled through 24,000 accredited brokers. We’ve originated $69 billion in loans since opening our doors and currently have over $20 billion in AUM.

And of course, listing on the exchange – twice (once in 2015 and again in 2021) – were huge milestones.

Q. How important have brokers been to Pepper’s growth?

I’m a bit biased because I was a broker for many years! Brokers are crucial ingredients to our success! When we started 25 years ago, we were wholly and solely reliant on the broker market. That hasn’t changed.

All our energy and investment and product positioning – everything has always been broker + customer. We’ve invested heavily in brand awareness and sponsorships not to bring direct business, but to give brokers confidence in recommending Pepper and ensuring it is a brand people recognise.

We also bring brokers into the process – focus groups, product feedback, process design – because they know better than anyone what customers need. We could not have written $69 billion in 25 years without them.

Q. How has Pepper embraced technology?

Our constant reinvestment in technology has allowed us to really be confident in our service deliveries, while removing friction and making sure it’s seamless for customers.

Pepper was the first non-bank in Australia to go full top and tail with NextGen’s ApplyOnline, back in 2006.

Some of the more recent game changers include Pepper Product Selector and Pepper Resolve. We took complex scenarios and reduced them to a 14-question matrix, with 100 per cent certainty of approval. It significantly changed the way brokers looked at non-bank and non-conforming products because we removed the complexity and uncertainty. That gave brokers huge confidence. These are close to my heart because they showed how we could take something complex, simplify it, and truly transform the way brokers and customers engage with non-bank lending.

Then our first-of-its-kind credit cascading model – one application, multiple solutions – meant a broker never had to reapply or rekey. The probability-to-yes delivering higher, conversion was better, and the experience was better.

In auto, we’ve built API integrations for Solana into aggregator platforms, so data can pull straight out of their CRM.

Most recently, AltDoc Xpress digitised the self-employed income declaration process, making it seamless for brokers, customers, and accountants.

Q. What is the vision for the next few years?

It’s constant reinvestment in tech, process, and product – but without losing touch with brokers and customers.

We’ve launched the X Factor program, which is a wall-to-wall review of every process and interaction, making sure we’re always improving.

We’ll significantly broaden our product segments, expanding our total addressable market. The spark that started 25 years ago – finding the voids in the market – still drives us today.

Q. Where do you hope Pepper will be in 25 years’ time?

Well, I’ll be 75! But irrespective of who the CEO is, I hope it doesn’t change its values, I just hope the core stays the same and that we stay true to why we exist: to help people succeed and creating financial inclusion. I want it to still be in a position that we’re constantly opening the gates for helpful loan options for our customers.

Pepper is known for seamless, tech-driven solutions, for filling voids in the market, and for being trustworthy. Over the last 25 years, this brand has built a legacy of trust. I hope that never changes. That’s the most important thing for this business to go on for another 100 years.