Thorney invests in Timelio fund for invoice financing
Thorney Investment Group has seeded the Timelio Capital Fund, a new unit trust to be offered to institutional investors seeking a diversified exposure to the emerging asset class of invoice financing.
Thorney and Timelio, a Melbourne-based fintech that has built a peer-to-peer platform allowing small businesses to access funding based on the amount of money owed to them on unpaid invoices, expect the new fund to grow to $100 million over the short-to-medium term.
Timelio has also raised $5 million in fresh equity, backed by Thorney and former ANZ Banking Group director John Dahlsen, a recent critic of the big banks.
Timelio has facilitated $45 million in funding for small businesses since its inception in April last year and says it is growing at 30 per cent per month. The new capital will be deployed to growing the team, including sales and brand executives and a new director with experience helping tech companies scale.
Timelio co-founder Charlotte Petris says expressions of interest have been received for the Timelio Capital Fund from global institutions wanting an exposure to Australian SME credit. The fund will invest through the P2P platform in a broad range of invoices, providing diversification to the investor.
The opportunity for Timelio has been created by banks’ poor performance innovating for SME customers. Invoice financing has historically been stigmatised and many businesses say the quality of service from banks and other existing players is poor. Banks typically provide invoice financing only to larger clients, preferring to push smaller borrowers into overdrafts or seeking security in the form of property for business loans.
Tight control process
Timelio offers interest rates of less than 1 per cent a month for low-risk borrowers and up to 2 per cent a month for higher-risk borrowers. Pricing is assessed on a range of factors, including the credit-worthiness of a small business’s big customers.
A tight control process in terms of accepting borrowers onto the platform has resulted in a zero rate of default over the first 18 months of operations, which Ms Petris says obviously cannot last. She says investors should prepare for some defaults. “The challenge is to scale and keep defaults low. We are aiming for under 1 per cent.”
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