OnDeck Australia has come a long way in two years, and as we have evolved and matured as a company, we have struck some significant milestones along the way.
Since launching in 2015, we have lent to over 1,000 Australian small businesses with fantastic year-on-year growth. In a sign of the further evolution of our company, we recently moved to new premises at 130 Pitt St in Sydney’s CBD, to accommodate the growing ranks of our staff which has grown from 2 people to 45 in the past couple of years.
However, it is not only OnDeck that has developed over time, but market awareness has increased significantly and scepticism towards alternative finance has started to wane.
So, what brought us here?
Our parent company OnDeck Capital Inc., was inspired to choose Australia as the third market to enter after the US and Canada because of its attractiveness as an upcoming fintech hub and the large small business segment (Australia’s largest employer). Moreover, Australia is dominated by incumbents – the big four banks – whose product offerings are not meeting the demands of small business owners.
Australian SMEs have traditionally been very conservative about borrowing funds to run and grow their businesses. However, if we take into account our US experience, alternative lending is expanding at a steady rate and from our experience so far we know Australia is a market full of opportunity.
We are a different market to the US with a smaller number of large banks, fast-paced technology adaption and a best practices approach when it comes to regulation and compliance.
Room for more growth
From an opportunity perspective, we found that Australian SME owners feel ‘unloved’ and are side-lined by the banks who often give them a ‘slow no’ to loan applications. Against this background, small businesses have embraced OnDeck’s high-touch, high-tech approach, and the concept of short-term business loans.
This receptiveness is expected to grow in size and momentum as the OnDeck brand and offer become better known. It’s not hard to imagine that SMEs will embrace this faster, easier and more accessible option when they come to know about it. It’s therefore not surprising that our Net Promoter Score is sitting at 76% – far higher than the average for banks.
For OnDeck, the customer experience is just as important as the product itself. Our NPS and Trustpilot scores tell us we are getting it right, but we are acutely conscious of maintaining – and increasing – that ranking.
We have also forged new relationships and deepened existing partnerships over the past two years – which we perceive as a real ‘win’ not only for our own business, but also for Australian small businesses seeking to manage everyday cashflow needs.
MYOB — Australia’s leading business accounting software and solutions provider — as our major partner has given us great support. Earlier this year MYOB launched its new short term loan offering MYOB Loans Powered by OnDeck. Going forward, we believe OnDeck can add a further dimension to MYOB’s overall proposition for small businesses, focusing on effective cashflow management solutions.
OnDeck also partnered with AltFi, the world’s leading news site for the fast-growing alternative finance space; and the Franchise Council of Australia in different capacities to reach our audience effectively.
Moving fast with brokers
The response from brokers has been phenomenal so far. Each month we accredit more and more brokers who recognise the benefits of our product for their customers and want to do business with us.
Raising awareness remains a top priority
Australia is still in the awareness phase where the biggest obstacle to growth is letting our customers know that we exist.
Only 25% of small businesses know about fintechs and alternative lending, but that is up from just 16% in 2016. Even in the US, where the market is far more mature, that number is still less than half (45%). It’s a long game!
To further raise awareness of the OnDeck brand, we launched an extensive and successful advertising campaign. Hopefully you have seen or heard the ads for our #turnthatNOaround campaign on radio or in the outdoor media.
The campaign message was simple, yet different and resonated with the market – we want to see Australian small businesses getting on with it.
Our key differentiator is knowing our customer and exceeding their service expectations.
While we have made significant progress since launching in 2015, we understand there is still plenty to do in the world of alternative finance for small business – and we too are ‘getting on with it’.