Business lender Shift banks $27 million from Sequoia Capital

Small business credit fintech Shift has raised $27 million in fresh capital, led by Sequoia Capital Southeast Asia.

The 10-year-0ld fintech provides credit and payment platforms to help businesses trade, pay and access funds. It was previously known as GetCapital, having rebranded as Shift in October 2021.

The company is calling this a Series C. The new capital will be used to improve the company’s products .

It previously raised $10 million in March 2020 in a round it called a Series D, alongside $100 million in fresh debt, including mezzanine finance.

Shift also raised $87.5 million in mezzanine funding from the Australian Business Securitisation Fund in October 2021, establishing $500 million in warehouse funding at that point.

Previous backers include former Macquarie Capital execs John Prendiville and Michael Carapiet, Pepper cofounder Patrick Tuttle, Singapore family office Alto Partners and fund manager Challenger among 40 investors on the Sydney fintech’s cap table. The company said existing investors participated in the latest capital injection.

Taking VC funding from Sequoia marks a shift in strategy for founder and CEO Jamie Osborn, a former Macquarie Bank managing director, who in 2020 praised his backers as “sophisticated, long-term investors” that provided “a key competitive advantage” compared to VC shareholders “who often seek to prioritise short term growth and a shareholder exit over building a great business over the long run.”

Shift competes with the likes of ASX-listed Prospa, and Judo Bank, offering small business lending between $10,000 to $1 million depending on business turnover. Its most popular product its Business Overdraft, charging 11.95% to 19.95% in interest.

The company says it has now provided more than $2 billion in finance to Australian businesses.

Osborn said Shift had performed strongly over the last three years.

“With this funding, we are well-positioned to scale our business and unlock growth for our partners and business customers,” he said.

Sequoia Southeast Asia principal Rohit Agarwal said many businesses in Australia have to rely on mortgaging their homes or vehicles for credit finance.

“More than $3 trillion is outstanding in credit to businesses and more than 90% of it is backed by real estate or automobile,” he said.

“Shift is solving this by providing smart finance solutions – credit anytime, anywhere – to millions of businesses using data and technology. ”