Joust taps new Australian crowdfunding rules in bid to raise $2 million

Joust, an Adelaide based fintech that brings competitive tension to the home loan market by linking borrowers directly with over 20 lenders who compete against each other in real-time, has launched an equity crowdfunding campaign to raise $2 million.

The Joust platform brings disruption to the $1.7 trillion home loan mortgage market where $2 billion in fees are paid to mortgage brokers annually.

Described as a “consumer hero” fintech company - as Joust places the power back in consumers’ hands - Joust uses technology to provide transparency, competitive tension and superior customer outcomes to the home loan market.

Key points:
• Aiming to disrupt the mortgage broker channel under siege from the Hayne royal commission financial services inquiry
• Real-time auction platform driving competition and transparency to deliver lower interest rates to customers
• 2100 customers have already used the service, jousting home loans worth in excess of $1 billion
• $4.7 million company valuation (pre-money) representing a discount to comparable fintechs
• Funds raised will set Joust on a growth trajectory which includes new product and geographic expansion

Mark Bevan, Joust co-founder and CEO stated, “Joust is not a comparison site with a myriad of static rates, it is also not an online broker or aggregator. We are a revolutionary market-place model for home loan customers and lenders.

“Banks pay over $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers, I know they want to pay less.

“Joust is an absolute disruptor to the $1.7 trillion home loan mortgage market. We have created a market-place for those that no longer want to deal with a middleman. We are the solution for banks and home loan consumers that want to circumvent the dated broker model. Our model is cheaper, simpler and more transparent”.

Using the capital it will raise via equity crowdfunding platform OnMarket, Joust plans to spend approximately half the money raised on a marketing campaign, with the remaining funds contributing towards new product development and potential overseas expansion.

Mr Bevan explains further, “The Joust platform is imminently scalable and, we believe it has significant growth potential both in its existing market and related markets. We currently operate only in the home loan space, but we are exploring offering new products through our platform, including insurance, car loans, and personal loans.”

Ben Bucknell CEO of OnMarket mentioned, “As a fellow fintech disruptor we are delighted that Joust has embraced the new equity crowdfunding laws. The investors that come to our platform are searching for the opportunity to invest in early stage, innovative and disruptive companies and Joust definitely meets this description.

The new crowd-sourced funding legislation allows unlisted public companies the opportunity to raise up to $5 million per year from the crowd. OnMarket has become the leading equity crowdfunding platform in Australia, successfully completing several equity crowdfunding deals in the short time since receiving an equity crowdfunding intermediary licence from ASIC.

The Joust equity crowdfunding offer is live via the OnMarket platform till August 3. Joust is targeting a minimum raise size of $700,000, and a maximum of $2 million. The minimum bid size into the offer is $500.

Click here for the full article

The Australian fintech getting rid of the mortgage brokers

Chris Pash JUL 20, 2018, 9:49 AM

  • Fintech Joust connects home loan customers directly to more than 20 lenders, saving time and money.
  • The startup aims to disrupt the mortgage broker channel.
  • Real-time auction platform drives competition and transparency to deliver lower interest rates.

Joust, an Adelaide fintech which cuts out fees to mortgage brokers by linking home borrowers directly with lenders, has launched an equity crowdfunding campaign to raise $2 million.

The platform, aimed cutting out the middleman and disrupting the $2 billion in fees paid to mortgage brokers each year, has more than 20 lenders bidding in real-time to get the business of prospective borrowers.

“Joust is not a comparison site with a myriad of static rates, it is also not an online broker or aggregator,” says Mark Bevan, Joust co-founder and CEO.

“We are a revolutionary market-place model for home loan customers and lenders.

“Banks pay over $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers, I know they want to pay less. We are the solution for banks and home loan consumers that want to circumvent the dated broker model. Our model is cheaper, simpler and more transparent.”

Joust plans to spend half the money raised on a marketing campaign, with the rest for product development and potential expansion overseas.

“The Joust platform is imminently scalable and, we believe it has significant growth potential both in its existing market and related markets,” he says.

“We currently operate only in the home loan space, but we are exploring offering new products through our platform, including insurance, car loans, and personal loans.”

The equity crowdfunding campaign is via OnMarket, one of seven platforms which gained an equity crowdsourcing licence from corporate regulator ASIC in January.

The new crowd-sourced funding legislation allows unlisted public companies the opportunity to raise up to $5 million per year from the crowd.

“As a fellow fintech disruptor we are delighted that Joust has embraced the new equity crowdfunding laws,” says Ben Bucknell CEO of OnMarket.

“The investors that come to our platform are searching for the opportunity to invest in early stage, innovative and disruptive companies and Joust definitely meets this description.”

The Joust equity crowdfunding offer is live via the OnMarket platform until August 3. The minimum bid size into the offer is $500.

Click here for the full article

$2bn of broker commissions in fintech’s crosshairs

The Adviser 06:50 AM, 18 Jul 2018

An Australian fintech has set its sights on disrupting the dominance of the mortgage broking industry by appealing to the banks who it claims are keen to reduce the $2 billion they spend on broker commissions.

Adelaide-based online home loan platform Joust has distanced itself from its competitors in the fintech space, which has seen a flurry of mortgage disruptors in recent years.

“Joust is not a comparison site with a myriad of static rates. It is also not an online broker or aggregator. We are a revolutionary marketplace model for home loan customers and lenders,” Joust co-founder and CEO Mark Bevan said.

Joust is leveraging the negative press that the third-party channel has garnered over the last 12 months, driven by mainstream media coverage of the Productivity Commission’s draft report and the ongoing Hayne royal commission.

The group stated that it is “aiming to disrupt the mortgage broker channel under siege from the Hayne royal commission’s financial services inquiry”.

Mr Bevan believes that the banks are also looking for a way to reduce their distribution costs.

“Banks pay over $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers. I know they want to pay less,” the CEO said.

However, while 2,100 customers have already used the service, “jousting” mortgages worth more than $1 billion, mortgage brokers remain the preferred channel for Australian borrowers.

Data from the MFAA compiled by Comparator shows that Australian brokers settled $46.1 billion in residential home loans in the quarter to March 2018.

This represents 55.3 per cent of home loans and is 1.7 per cent higher than the March 2017 quarter (53.6 per cent).

Meanwhile, Joust, which has valued its business at $4.7 million, has relationships with over 20 lenders who compete against each other in real time to win a customer’s loan. The group recently launched an equity crowdfunding campaign to raise $2 million. Mr Bevan said that the funds will be spent on new products, geographic expansion and marketing. Joust is also looking to scale its platform and enter new markets.

“The Joust platform is imminently scalable and, we believe, it has significant growth potential both in its existing market and related markets. We currently operate only in the home loan space, but we are exploring offering new products through our platform, including insurance, car loans and personal loans,” the CEO said.

Crowdfunding site OnMarket’s CEO, Ben Bucknell, said: “As a fellow fintech disruptor, we are delighted that Joust has embraced the new equity crowdfunding laws. The investors that come to our platform are searching for the opportunity to invest in early stage, innovative and disruptive companies and Joust definitely meets this description.”

The new crowd-sourced funding legislation allows unlisted public companies the opportunity to raise up to $5 million per year from the crowd.

Click here for the full article

Mortgage platform to chase low-deposit borrowers

By Charbel Kadib 04 July 2018

Mortgage marketplace Joust has launched an equity crowdfunding campaign with the goal of raising a minimum of $700,000 and up to $2 million.

Speaking to Mortgage Business, founder and managing director of Joust Mark Bevan noted that the equity raised would be used to fund the mortgage originator’s domestic and international growth ambitions, with Mr Bevan revealing that Joust is in “advanced talks” with New Zealand-based parties looking to replicate the business model.  

“Approximately half of the funds raised will be earmarked for marketing and advertising to scale the business here in Australia,” the MD said.

“The other half is a split between technology development plans we’ve got for other products beyond home loans, exploration of potential opportunities to replicate the Joust business model in overseas markets, and to build out our team and reduce some key person risk within the business, and add some broader skill sets.”

Mr Bevan also revealed that Joust plans to broaden its platform to borrowers with loan-to-value ratios (LVR) of over 80 per cent. 

“Our initial target audience was the high-credit quality, prime consumer, and we’ve had an excellent response from prime consumers, which has been our target audience,” the MD said. 

“However, we continue to get some interest and inquiries both from the banks on the supply side and from customers around potentially pushing out our LVR ratio maximums.

“At the moment, 80 per cent LVR is the maximum to be able to deal with Joust, but that would be one of the enhancements that we’d look at — potentially pushing that upwards so we can help more Australians.” 

Further, Mr Bevan told Mortgage Business that recent scrutiny of the mortgage industry from the financial services royal commission could present Joust with an opportunity to further highlight the value of its offering.

“Our internal view is that the royal commission will highlight significant concerns around a lack of transparency and a lack of real competition, and they are the key areas of focus for the Joust business model in terms of bringing significantly greater transparency and making it easier for consumers to actually obtain real competition tension,” the MD added.  

https://www.mortgagebusiness.com.au/breaking-news/12408-mortgage-platform-to-chase-low-deposit-borrowers

Adelaide fintech startup Joust seeking to raise $2m in Equity Crowd Funding

Adelaide fintech startup Joust is launching an equity crowdfunding campaign via OnMarket and is hoping to raise $2 million to rapidly scale the business.

The Joust platform, launched in 2016, links borrowers with more than 20 lenders who compete against each other to offer the lowest interest rate via a reverse auction process.

Using equity crowdfunding platform OnMarket, the company plans to spend a large portion  of the money raised on advertising, with the remaining funds to go towards product development, potential entry into overseas markets and building out the Joust team.

A minimum $700,000 is being sought as part of the capital raise, which allows retail investors to invest between $500 and $10,000.

Joust chief executive Mark Bevan said the equity crowdfunding model suited the company’s consumer focused brand.

“We’ve been watching the equity crowdfunding legislation progress in Australia for two years or so,” he said.

“If we were to raise $2 million from say 2000 investors, it’s highly likely that they will instantly have 2000 new customers and 2000 new advocates.

Joust’s existing shareholders include Adelaide Football Club chairman and former BankSA managing director Rob Chapman and NOVA Entertainment Group.

Mr Bevan said more than 2100 customers had used Joust since its launch two years ago, with more than $1 billion worth of prime home loans auctioned on the platform.

Joust’s crowdfunding campaign is currently open to pre-registered investors and via the attached link: https://www.onmarket.com.au/offers/joust-australia-limited/

The offer is expected to close on August 3.

https://australianfintech.com.au/adelaide-fintech-startup-joust-seeking-raise-2m-equity-crowd-funding/

Fintech startups threaten mortgage broking old guard amid royal commission heat

OPINION

April 16 2018

James Eyers

The emergence of fintech disrupters to the lucrative mortgage broking industry is being driven by three key dynamics. 

First, banks pay $2 billion a year in commissions to mortgage brokers for the delivery of home loan borrowers – but want to pay less. 

Second, the Hayne royal commission is investigating whether current broker pay structures create conflicts of interest and exploring better ways to serve customers. 

Third, technology is making self-service easier, and "open banking" will put customers in control of their data, including all the information required to make a mortgage application.

So enter the mortgage broking entrepreneurs and a bunch of start-ups ruffling the feathers of the powerful incumbents. 

Advertisement

 

Take, for example, Hero Broker. It launched two weeks ago with a mantra to redirect the savings from its technology efficiencies back to customers.

Redundant role

Founder Clint Howen reckons under open banking, applying for a mortgage will be as easy as pushing a few buttons, to enable the necessary information to flow in the background. This will make the traditional broker's role of filling out and submitting application forms largely redundant. 

Even before open banking arrives, Hero Broker is using an automated application process to save customers the entire amount of the upfront commission currently paid by banks to brokers. This is typically about 0.6 per cent of the value of a loan.

The start-up has cut a deal with three major banks for them to pay a smaller amount than the traditional upfront commission directly to Hero Broker customers in the form of a rewards card.

Hero Broker receives the trailing commission, but in the future, this could become a flat fee, especially if the royal commission shifts the industry to a fee-for-service model. 

Broker backlash

Traditional brokers are angry; a YouTube video where Howen reads a selection of vicious tweets from paranoid members of the broking community worried his model will eat their lunch has been viewed more than 31,000 times. 

Many other mortgage fintechs are lining up to disrupt brokers. Uno, majority-owned by Westpac, has created a new digital mortgage broking brand. Tic:Toc, in which Bendigo and Adelaide Bank has a 35 per cent stake, has created a fast online application process. Macquarie Group-backed Lendi is another online mortgage broker. 

Moneycatcha's Homechain is a digital platform to manage the home loan process from application to settlement. HashChing is a platform for customers to find top rated mortgage brokers, allowing them to access lower rates. 

Customer-centric control of data is a key theme in the new business models. Lodex, for example, lets users set up a profile including a credit and social score, and gets lenders to come to them. Loan Dolphin, Joust Home Loans and recently-launched Loanbid have created marketplaces where lenders and mortgage brokers bid for customers. 

Mortgage aggregators like AFG and big brokers like Mortgage Choice and Aussie Home Loans have their work cut out to respond to these new models and adapt to the digital economy. 

The royal commission has put customers on notice that brokers' promises of more competition come at a cost. Howen is right that as technology makes it easier for customers to apply for loans and provide supporting data, a good chunk of the cost savings should flow bank to them.


Read more: http://www.afr.com/technology/fintech-startups-threaten-mortgage-broking-old-guard-amid-royal-commission-heat-20180413-h0yqp7#ixzz5Dpgzbwv8 
Follow us: @FinancialReview on Twitter | financialreview on Facebook