86400 has raised $34 million its its very first funding round, one of the largest of any Australian fintech it claims.
With 170,000 accounts open, 86400 said it will use the new investment to continue growing, aiming to have 500,000 accounts within 12 months.
It follows on just months after competitors Xinja and Volt raised $430 million and $70 million respectively in later round funding.
As the coronavirus puts economies on pause, Australia's neobanks are lining up investors behind the scenes.
86400 has just hauled in $34 million in first-round funding as it seeks to consolidate its position in the market, receiving money from an Australian superannuation fund and fund managers, as well as high-net-worth individuals and family offices. 86400 did not reveal the superannuation fund or other investors behind this round.
"The funding announced today means we can keep our foot firmly on the accelerator, continuing to build out both sides of the ledger and help even more Australians take control of their money," CEO Robert Bell said in a statement, claiming it to be one of the largest Series A funding rounds for an Australian fintech.
It can be difficult to compare the field on the funding front due to their different structure. 86400, owned by Australian financial payments company Cuscal, has only gone out to investors late in the piece, having launched more than six months ago.
Xinja, on the other hand, had to launch from scratch, raising $3 million in initial funding more than a year before they were even approved for a licence. Most recently, however, it raised a whopping $433 million from Emirate's World Investments.
Volt meanwhile raised $70 million in a third funding round in January, but despite being the first consumer neobank granted a full banking licence, is still yet to launch publicly. Up, partnered with Bendigo Bank, meanwhile has far less reliance on funding rounds altogether.
With nearly $20 million on its mortgage books, 86400 is the only neobank to be offering home loans currently. Bell believes his bank is moving faster than any of its competitors "digital or otherwise". Since 86400's launch in early September 2019, Australians have opened 170,000 accounts with 86400. Going forward, the neobank has ambitious growth targets.
"At our current rate of growth, we should hit 500,000 accounts on the platform in the next 12 months," Bell said. "That will be balanced by growing the lending side of our business and we anticipate having a mortgage book of close to $2 billion by the end of 2021."
Pointing to a net promoter score (NPS), which measures customer satisfaction, of 46, versus the big four average of 2.1, chair Anthony Thomson said customers were gravitating to what they couldn't get elsewhere.
"We always said we were building a bank that puts our customers first before anything else," Thomson said. "The big
four banks would kill to have an NPS as good as ours, and we’ve achieved that with a fraction of the team that they have. That’s because we listen to our customers and deliver on our promises."
Offering banking entirely via smartphones anyway, neobank customers shouldn't be too impacted during the current lockdown.
Certainly, their investors don't seem to be.