OnDeck Australia executives announce management buyout
Leading online small business lender OnDeck Australia has been the subject of a management buyout.
The buyout, which was completed December 2021, involves three long term company executives, who form the core management group, buying a 58% stake in the business from former holding company Enova International.
The core management group is comprised of Founder of Australian online commerce powerhouse GraysOnline – Cameron Poolman – Chief Executive Officer of OnDeck Australia, Jerry Yohananov – Chief Financial Officer, and Charlene Batson – Chief Operating Officer.
The management buyout will see holdings in OnDeck Australia divided across:
- 58% core management group
- 22% long term Australian investors
- 20% US-based OnDeck Capital Inc., a wholly owned subsidiary of Enova International.
The buyout reflects a long term strategy of OnDeck Australia’s management team to have a business solely focussed on servicing the credit needs of Australian small businesses using the latest technology available globally to achieve this.
Enova’s retention of a 20% stake in the business confirms its commitment to OnDeck Australia’s strategic direction and management team.
MBO will be business as usual
The management buyout does not impact OnDeck Australia’s funding sources. The lender enjoys ongoing support from its core funders including Credit Suisse, Australian Office of Financial Management (AOFM) and iPartners, which ensures ‘business as usual’ for OnDeck Australia’s customers and the broker channel. As the company’s core management team have all been with OnDeck Australia for many years, the management buyout will not result in any disruption to OnDeck Australia’s lending activities.
Cameron Poolman, CEO of OnDeck Australia, said, “A management buyout is always clear evidence of the faith a management team has in a company – and this is definitely the case for OnDeck Australia.
“The executive team sees significant opportunities for OnDeck Australia. The back end of 2021 saw an impressive uptick in demand for our unsecured small business lending products. Loan originations were over 50% higher in November and December 2021 compared to the four previous months, and we believe additional tailwinds will contribute to further growth in 2022.
“Looking ahead, we are highly optimistic that Australia’s small business community will flourish as the economy regains momentum. Businesses will require credit to reach their full potential, and this will support sustainable growth for OnDeck Australia.
Unique focus on the needs of small business
Since launching in 2015, OnDeck’s focus has always been on supporting small businesses with access to fast, efficient unsecured finance, filling a gap in the markets that banks are either unable or uninterested in serving.
Poolman said, “Our point of difference has always been leveraging our unique credit scoring capability and understanding of small businesses to provide best in class lending solutions.
“These unique capabilities are backed by a team passionate about small business led by myself, Jerry and Charlene, who all have complementary business backgrounds.
“My background is as a fintech entrepreneur, Jerry is a technology finance executive and Charlene has had a successful career in banking in Europe, the Middle East and Australia.
“The three of us have worked together for over five years now at OnDeck Australia. We know the business inside out and have complementary skills, which set us up well for the future.”
Poolman continued, “OnDeck Australia’s use of bespoke technology including our inhouse-designed The KOALA Score™ credit model, also makes us unique in the market.
The KOALA Score™, formally known as Key Online Australian Lending Algorithm, was developed in-house by OnDeck Australia’s team of data scientists – and it has proven to be a game changer in the small business lending space.
“It’s the most predictive model in the market because it uses a greater range of data sources and ultimately enables us to offer more loans to more Australian businesses, at a time when they really need it,” Poolman said.
The KOALA Score™ has driven the launch of OnDeck Australia’s Lightning Loans® process in 2021, which has been a game-changer for small business finance in Australia.
Poolman said, “Our automated processes now mean that only larger or more complex loans require the involvement of an underwriter, allowing accelerated lending decisions to be made on the vast majority of small business loans.
“With more than two thirds of our decisions made without underwriter input, this allows small businesses and brokers to benefit from our streamlined ‘Lightning’ application process for loans up to $100,000, with funding decisions in as fast as 30 minutes. Approved applicants can have funds available in as fast as two hours. This is driving what we believe are among the fastest, most accurate lending decisions in the SME market today.”
Jerry Yohananov, Chief Financial Officer, OnDeck Australia said, “The right factors are in place for OnDeck Australia to enjoy sustainable growth. Our delinquency rates are low, our loan book is performing amazingly well, and we have the ongoing support of outstanding business partners including the broker channel.
“We are entering 2022 led by an Australian management team, one that has taken over a US controlling interest. And we have an exceptional platform that has enabled us to bring Lightning Loans® to the market, which is giving OnDeck Australia even more opportunities to align with small business owners and the broker channel, to deliver fast, efficient unsecured lending solutions that allow these businesses to reach their full potential sooner,” concluded Yohananov.
