Dubai-based World Investments (WI) and Australia’s neobank Xinja announced today the investment of A$433 million in the Sydney-headquartered digital bank over the next 24 months, subject to relevant approvals. WI will invest A$160 million immediately, with the remaining A$273 million available to be drawn down in multiple tranches as Xinja Bank’s growth requires over the next 2 years.
Eric Wilson, Founder & Chief Executive, Xinja Bank enunciated, “We think this is the largest single investment in an Australian neobank or start-up, and combined with exceptional customer acquisition and deposit growth, positions Xinja Bank as a frontrunner in the Australian neobank market.”
He mentioned, “We are very happy to welcome World Investments as investors in Xinja Bank. WI personifies ‘smart money’. These are investors who bring deep skills and knowledge in banking to help us grow and be successful.”
First Penny Investments helped the bank to secure the investment over 2 years of discussions.
WI has significant equity holdings in banks across Europe, the Middle East, and now in Australia. Xinja Bank, a digital bank built for mobiles, was granted a full banking licence in September 2019. It launched an app and a prepaid card, before launching transaction accounts and a saving account called Stash, which in less than 8 weeks attracted around A$400 million in deposits.
Earlier this month, the bank had launched a fund raise aimed at ‘sophisticated’ investors or ‘wholesale’ investors via the investment platform Equitise, as part of its Series D round. Xinja has revealed that it will launch personal loans and home loans later this year. The bank is covered by the Financial Claims Scheme, with deposits up to A$250,000 protected by the Australian government.
And now for a little good news 🙃
— Xinja Bank (@xinjamoney) March 24, 2020
Xinja Bank, a Sydney-based independent neobank built entirely for mobile, has launched a fund raise aimed at ‘sophisticated’ investors or ‘wholesale’ investors via the investment platform Equitise, with a minimum of $20,400 to invest where shares are priced at $4.08 each. The capital raise is part of its Series D round, and the funds will be used in the continuation of building the lending side of its business as well as regulatory capital.
“We would like to have done another equity crowdfund to open this to all our customers,” said Eric Wilson, Founder & CEO, Xinja Bank. “However, equity crowdfunding regulation prevents us from doing that,” he said. “As part of our recent submission to the Australian Senate Select Committee on Financial Technology and Regulatory Technology, we recommended that this restriction be lifted.”
On January 15, 2020, Xinja Bank launched a savings account alongside its bank account and in seven weeks, over $300 million in deposits flowed into the bank. Xinja presently has 25,000 customers and over 41,000 accounts. The bank was launched in May 2017. It built an app, launched a prepaid card, and then secured a full bank licence in September 2019, opening bank accounts for customers on the same day.
Xinja was built from scratch to deliver better banking to customers. It uses the latest cloud-based banking technology. The neobank has raised around $70 million in total, from Australian and offshore investors through Series A, B, C and the first 40 percent of Series D. This includes two equity crowdfunding (ECF) rounds, held in January 2018 and January 2019.
With the challenger banking sector under pressure from the global health crisis, Wilson closes on a somewhat downbeat note: “We know that this is a very difficult time for Australia and the world. And considering the health crisis we are all facing, this is not a time to celebrate.”