Founded just last year, Verveta has been in ‘stealth mode’ up until now, developing its product offering without any publicity. This is according to the founding CEO Andrew Walker, who along with his founding partner and CXO Chris Lumby, initially bootstrapped the startup.
The Series A capital raise with Bolton Equities marks their first round of external funding. They plan to use the funds for product development, business expansion and market launch.
Walker and Lumby previously worked together in executive roles at Westpac. They have assembled a management team with more than a century of banking experience between them across customer experience, digital and data.
The two founders who both have personal experience with setting up and running businesses, originally met as colleagues and have formed a business partnership based on a shared vision, mutual respect and complimentary skills.
The startup founders were working together at a major bank, and in that time became acutely aware of how difficult it was for large organisations to innovate. This was part of the reason they were inspired to create Verteva.
On the idea creation, Walker also commented, “We were also aware of just how badly innovation is needed to deliver the kind of experience customers deserve. We saw the opportunity to use data to improve the mortgage process and an industry that was encumbered by legacy systems and bureaucracy. Launching a smaller organisation without the sunk costs, legacy systems and allergy to change that hold major banks back was the logical step to take.”
“With the vast majority of mortgages originating in face-to-face meetings, using paper based forms and manual credit assessment processes, the home loan industry is badly outdated.
“Changes in the current distribution model are likely to accelerate to be more digitally based aligning with those of the United States and European markets.”
To build this vision of a smaller and more innovative approach to home loans, Verveta secured their capital from one funding firm only, Bolton Equities.
Bolton Equities (BE) is the group of entities which together, on behalf of the Bolton family, are responsible for the family’s portfolio of direct investments into private companies. Based in Auckland, NZ, BE is invested in several private companies and charities in New Zealand, Australia, the UK and the US. Portfolio assets sit within fin-tech, tech- enabled services, healthcare and entertainment sectors, reflecting the spheres of experience held by its senior leadership team.
Founding CEO, Andrew Walker, said that Verteva’s funding round had secured stable long-term support for home lender startup. Initially struggling to find investors that shared their vision, Bolton Equities have become a partner in bringing Verteva’s vision into reality.
“Verteva is really pleased to have a partner like Bolton Equities with deep roots in financial services. Their backing reflects confidence in our vision, experience and most importantly our team.
“Many Fintech companies conduct smaller, more frequent capital raises. We took a different path and found a partner who sees beyond the immediate business interruptions and values long-term opportunities for transformation in the banking and finance sectors.”
Bolton Equities CEO Chris Dineen said that the strength and experience of the leadership team set Verteva apart from other lending disruptors.
“Verteva is in the right place at the right time and there has never been a better time to disrupt the banking market.
“Verteva’s leadership team has a plan that will change home lending, using data science, deep domain knowledge and new technological capabilities to deliver a frictionless customer experience.”
“The transaction structure provides Verteva with the runway to focus and deliver on the already exciting progress made to date. We are very proud to partner with the team and to help create a service which will genuinely rewrite the way we bank.”
Raising capital despite COVID-19
The founders of Verteva managed to close the round while the crisis was in full-effect. Andrew said that investors that either couldn’t look through cycles, or that were overweight in impacted sectors, fell away.
Andrew has said that although business conditions are tough, we should still be moving forward with future transformations.
“We will see business conditions deteriorate – everybody knows that. But shouldn’t underestimate the behavioural significance of putting around 7 billion people in timeout and forcing them to conduct all aspects of their lives online.
“We are at the start of a hyper-accelerated digital cycle. The pandemic is going to be a massive accelerator for digital transformation across the whole economy as a whole and banking in particular, as digital innovation is particularly lacking in this sector.
“We’ve seen across whole sectors that consumer behaviour is changing. Ecommerce has leapt ahead. Online delivery and logistics are being transformed as people shop online, order food online, attend school online and socialise online.”
The digital pivots and adaptions forced by COVID-19 has further emphasised the need for the home loan start-up, Andrew believes, asking “Who is going to be excited at the prospect of a three-hour face-to-face meeting with a stranger in a tiny room filling in a 50-page mortgage application and then waiting by the phone for a few weeks for an update?”
Andrew’s advice for startups facing the hardship of COVID-19 right now is to ‘keep going.’
“Keep going. Just because investment is tightening doesn’t mean there aren’t people out there looking for quality teams and ideas to back. If you have a clear path to commercialisation and the strategy and capability to deliver, the right partner is waiting for you.
“But also be mindful that you can’t ignore the elephant in the room. You need to plan for and live in a post-COVID world, and be able to communicate to customers and investors how your company will be delivering value in the new normal.”
Verteva is a digital home loan provider founded in Sydney in 2019. By using data-driven decision-making to create a frictionless customer experience, Verteva is transforming the home lending market in Australia.
The startup’s capital raising was supported by Investment Bank Clavell Capital and law firm Herbert Smith Freehills. Verteva operates out of emerging technology Impact Network Stone and Chalk’s Sydney office.