Athena announces $90m funding round

Direct mortgage lender Athena Home Loans has announced that it has raised $90 million in Series D funding, bringing the total equity capital raised since launch to $200 million.

The Series D funding round represents the largest ever Australian-led venture capital round, surpassing the record set 18 months ago when Athena announced a Series C raise of $70 million in 2019, the lender said.

Venture capital firm Square Peg Capital led the funding round, while seven other investors also provided funding, including AirTree, Salesforce Ventures, investment firm Apex Capital, Macquarie Bank, AustralianSuper, Hostplus, and Sunsuper, it added.

Commenting on the funding round, Athena co-founder and CEO Nathan Walsh said the support for the Series D funding – which will support the digital expansion of its home loans – has demonstrated the “depth” of the local venture capital ecosystem, and its ability to support “disruptive models”.

“We’re delighted at such strong support from Australia’s savviest investors to change the $1.7-trillion home loan market for the better,” Mr Walsh said.

“We’re here to change home loans for good, and boy, do they need changing! Australian household debt is among the highest in the world, and borrowers are a decade slower in paying off their mortgage than a generation ago.

“The consumer benefits of real innovation and competition in home loans dwarf other sectors of fintech. And so-called ‘challengers’ are often merely a thin veneer disguising the same legacy predatory business models. Enabled by our proprietary mortgage platform, Athena is using the power of modern tech and design to challenge industry convention and continually innovate.”

Athena co-founder and chief operating officer Michael Starkey also commented on the funding round, saying that it has provided proof that digital lenders can innovate funding models while delivering good portfolio quality.

“Even while navigating the challenges of COVID, we doubled our home loan book in 2020, due to the exceptional credit quality delivered by our digital platform. Athena is well capitalised with strong institutional demand for our innovative funding models,” Mr Starkey said.

He cited the example of the recent agreement between Athena and Bluestone as one of the funding models, where Bluestone – with its parent company Cerberus Capital Management – has agreed to supply Athena with $2 billion in funding over the next three years. The deal is believed to be one of the largest strategic fintech partnerships in Australia.

“This is fundamental to supporting our mission of helping more Aussies pay off their home loan faster,” Mr Starkey said.

“We are excited to continue to lead the digital expansion of home loans in Australia. We have the strongest backing of leading investors in the country, an extremely talented team and substantial consumer appetite for a lender that is on their side.”

Square Peg Capital co-founder and partner also spoke about the funding round, stating: “I believe that Athena will fundamentally reshape what borrowers expect of financial service providers, and the result will be continued extraordinary growth at Athena.

“We’re grateful to lead an investment in Athena for the third time and will continue to support Nathan, Michael and the whole team.”

AirTree Ventures partner James Cameron said he was pleased to support Athena through its investment in the funding round.

“We’ve been continually impressed at both the pace of innovation in Athena’s products and technology, as well as its world-class treasury and risk controls,” he said. 

Athena Home Loans – which was founded by Mr Walsh and Mr Starkey who are former executives at the National Australia Bank (NAB) and launched in February 2019 – recently launched AcceleRATES, where borrowers’ interest rates will automatically reduce when they pay down their home loan and enter new loan-to-value ratio (LVR) tiers, the lender said.

Athena also offers Rate Match, which automatically adjusts the rate for existing customers if the lender releases a lower rate offer for new customers on a like-for-like loan.

[Related: Mutual lender announces $300m partnership with neo-lender]