Sapien Ventures’ first fintech investment is in Hashching
Wealthy Chinese migrants will help disrupt the Australian mortgage broking industry via an investment in Hashching, an online marketplace for home loans that is putting pressure on banks and their brokers.
The investment will be the first for Sapien Ventures, which was established last year by Victor Jiang and has raised a $50 million fund to invest in fintech and online marketplaces. Much of the capital has been raised from high-net-worth Chinese migrants after changes to the Significant Investor Visa program last year that require migrants bringing $5 million into Australia to invest at least $500,000 in eligible venture capital.
Sapien Ventures has invested $1 million in Hashching, and is preparing to announce another equity investment in a prominent local start-up. Mr Jiang said Sapien was raising two additional VC funds, a corporate and institutional fund, and a joint venture with a local wealth player, which could lift Sapien’s funds under management to well over $100 million.
Sapien, which has partners in Sydney, Melbourne and Silicon Valley and recently acquired a team of five in Shanghai, is also preparing to raise a $15 million fund domiciled in China. This will be deployed to back Australian start-ups using Austrade’s new Shanghai “Landing pad” as a start for expanding into China. Mr Jiang was a member of the trade delegation to China with Prime Minister Malcolm Turnbull earlier this month. David Gee, a former chief information officer at CUA, was also working with Sapien as an adviser.
Hashching, which launched in August last year, is a marketplace for prospective home buyers to choose mortgage brokers. The company, which works out of the Tyro fintech hub in Sydney, has received 991 applications for loans worth $517 million. Of these, 37 have been settled, worth $19.5 million, while 189, worth $93.1 million, are in the progress of being settled.
Eighty-one brokers are paying to use the Hashching platform, which offers them document and customer relationship management features to streamline application processes and lift customer service. About 1800 have registered their interest to join. Brokers pay $50 month to use the CRM features of the platform and Hashching takes a proportion of the broker fee once a loan is settled.
For customers, the site is offering loans with interest rates below 4 per cent and well below the banks’ advertised standard variable rates. The site drives competition between mortgage brokers by making the best rates received from the top brokers transparent, which has been driving more brokers to seek better rates from aggregator groups such as Mortgage Choice or AFG. The platform also encourages them to lift the standards of service as the site has built a star-rating system for brokers and is developing predictive analytics that will point customers to the brokers with the best reputations. The algorithm stops assigning new leads to brokers who fail to meet the required service standards.
“We are changing the behaviour of brokers by providing business tools to improve their productivity,” said Hashching founder, Mandeep Sodhi.