Challenger bank Judo Capital has launched in Australia this week, with the ambition of servicing Australia’s underbanked SME sector.
In an industry long dominated by the big four banks – ANZ, Commonwealth Bank of Australia, National Australia Bank and Westpac – the new bank has a view to avoiding “increasingly centralised functions and cookie-cutter lending policies”.
Judo Capital says it is looking to fill an estimated A$60bn deficit in SME lending, has applied for a full banking license, and is on target to raise A$100mn-plus to bring to the market.
It has been co-founded by career bankers, Joseph Healy and David Hornery. Healy has worked for ANZ, NAB, CIBC, Citi and Lloyds. He was the group executive of the NAB Business Bank. Hornery, meanwhile, is also a former NAB staffer, and has also worked for ANZ, where he was CEO in Singapore, and MacQuarie Group.
In an interview with local media, Healy said the startup is influenced by the challenger bank movement in the UK. “We saw a huge opportunity to go back to relationship-centric banking, which is banking as it used to be and banking as it should be,” he says.
Hornery adds: “There has been a growing level of dissatisfaction of small to medium-size businesses with the service proposition they have been receiving from banks, a one size fits all cookie cutter approach to lending with a heavy bias to real estate-based lending.”
The bank is headquartered in Melbourne and employs 40 staff. After raising A$20mn in seed capital, it hopes to have finalised more than A$100mn in funding by April.
Its main infrastructure has been provided by Itoc, a cloud-based tech company. “We’ve been delighted to work closely with Judo Capital from the inception of the business, it’s so rare to find teams so focused on innovation and challenging the status quo. I expect the work we’re delivering now will set new standards in the wider financial services industry,” says Richard Steven, Itoc CEO.