Kikka Pioneers Alt-Lending Down Under

Australia is about to see a big boost in its alternative lending market. Western Australia-based Kikka Capital is reportedly gearing up to launch an alternative lending service to become one of the first of its kind in the nation, and will do so in partnership with U.S. peer Kabbage.

Reports said Wednesday (March 25) that Kikka’s SME lending platform will launch some time in the year’s second quarter and will provide small businesses across Australia with up to $100,000 in working capital. The digital platform will be available 24/7, the firm said, and will be run by Kabbage, which Kikka CEO and Founder David Brennan described as “the industry leader in automated, real-time underwriting.”

“Combining Kabbage’s extensive experience with our small business loan offering is crucial to accelerate our entry into the SME lending market and ensure we stay ahead of the curve in this fast-moving online lending space,” he said, citing a recent statistic released by the Reserve Bank of Australia that found about 55 percent of SMEs in the nation fund their businesses with personal credit cards.

That statistic suggests there is a significant SME lending gap in Australia, but, according to Brennan, that gap offers “a tremendous growth opportunity” for alternative lenders.

Kikka will use Kabbage’s technology offerings to aggregate and analyze data from small business borrowers to make real time credit decisions at the initial lending phase, a process that will continue throughout the life of the lending relationship, the startup said. Kabbage is reportedly the only industry player with its own data platform.

Kabbage recently spoke with PYMNTS about its decision to lend its technology out in an effort to modernize the small business lending market. “Kabbage is the only company in the space, either FinTech or alternative finance, that is 100 percent automated,” said Kabbage Chief Marketing Officer Victoria Treyger.

Treyger added that working with Kikka means Kabbage will license its platform to a business it does not consider as a rival. “Because it is fundamentally a tech platform, it is possible for us to take that platform and license it and leverage it outside of our core business,” the executive said. “Kikka Capital will do all of the marketing and raise the capital that they will extend to the businesses. What we are doing is providing them with that technology platform for a licensing fee that will deliver the underwriting expertise, the real-time data assessment and then continuously monitor the businesses.”