“This funding round is to support the next substantial phase of our growth, further strengthen our cash levels and balance sheet, as well as to provide a further opportunity for our shareholders and customers to participate in supporting the business’s continued success,” the pitch said.
The funding is convertible, meaning that a specific valuation for the company has not been agreed.
This prevents the valuation from influencing Assetz’ negotiations with future investors and allows crowd investors to invest in Assetz at a 10 per cent discount to the future round.
The crowd’s investment will convert into equity in the future.
The new capital will be used to support Assetz’ staff and product expansion plans as the company considers a stock market listing. The company will use it to secure new institutional funding facilities, funding their set-up costs, and using them as long-term sources of funding for its lending.
Other plans for the fresh capital include further investment in marketing, its technology team, and resources to accelerate bringing on new lending-as-a-service partners and other strategic software project initiatives. Assetz intends to grow its staff roster to 200 from its current headcount of 100.
The funding will also be used as cashflow funding of some investor loan losses and recovery costs where the company has “a reasonable expectation of later recovery from security and legal action, in order to improve the investor experience and also treat customers fairly,” Assetz said.
The company will also launch a new line of smaller, mass-market secured lending products suited to the large marketplace of mainstream commercial mortgages and residential property refurbishment loans sourced through national brokers and distributors.
Last week, Assetz said it had strengthened its security with a new designated bank accounts feature.
The lender told its customers that the new functionality will come into effect on 3 July, enhancing security when moving funds on or off the platform.