Sequoia is looking at Australian start-ups again, backing fintech Shift in a $27 million round

“We want to give the end customer control and flexibility over their facilities … So we’ve invested heavily in data and technology to build a streaming data element – ​​we connect a company’s bank transaction accounts, pull that data, and we pull it continuously and built credit intelligence around it.”

Shift offers credit solutions and payment platforms to help businesses access trade credit and credit to purchase equipment or for working capital. It also has a platform for brokers, which gives them real-time customer insights.

The products all have different terms, but its term loan product provides businesses with up to $1 million over a maximum of five years, with an annual interest rate of between 12.95 percent and 21.95 percent. Only companies that have been established for three plus years can access this. However, the equipment credit business has a fixed annual interest rate of 15.95 per cent.

Mr Osborn, a former investment banker who had been chief executive of Grant Samuel and Macquarie Bank, founded the business in 2014. The fintech has now been profitable for the past five years and generates more than $100 million in revenue.

The business has grown revenue by an average of 50 percent year-on-year over the past three years, and Osborn expects to maintain that growth this year.

“Companies have over-indexed growth at the expense of other important metrics,” he said.

“For a business like ours … we feel comfortable with 50 percent growth and will not look to optimize above that.”

To date, it has provided $2 billion in “tailored financial solutions”

Alongside the equity financing round, the business has also recently secured an additional USD 140 million in debt financing capacity, expanding its capacity to USD 800 million.

Most of Shift’s funding to date has been provided by sophisticated investors, with Mr Osborn jokingly describing the $40m it has raised to date as the biggest “family-and-friends” round ever.

But he said the time had come to expand the register to institutional investors.

“We have big ambitions for the net three to four years,” Osborn said.

“Every capital raising is difficult … we had this interesting environment where it was the peak of the hype cycle, and fintech was the peak of the peak, but we’ve seen that come down quite significantly.

“But for companies that can demonstrate growth and have worked out their own unit economics, the venture market will continue to support them.”

Fintech believes that it will have sufficient equity funding for the next three years, but will have to return to the debt markets several times during that period.

“[There is] more than $3 trillion in outstanding corporate credit, and more than 90 percent of it is backed by real estate or auto[s]”, said Sequoia Principal Rohit Agarwal.

“Shift solves this by providing smart finance solutions – credit anytime, anywhere – to millions of businesses using data and technology.”