Australian financial tech company Tyro Payments plans to challenge the country’s leading retail banks after scoring AUD $100 million (about $72 million) in funding from Tiger Global, TDM Asset Management, and Atlassian co-founder Mike Cannon-Brookes.
Founded in 2003 to enable point-of-sale debit and credit card payments, Tyro Payments currently works with 14,000 Australian businesses and processes over AUD $8 billion in transactions each year. Now Tyro Payments is turning its ambitions to banking after becoming the first Australian tech company to receive a banking license from the Australian Prudential Regulatory Authority.
Tyro Payments plans to compete with the top four retail banks in Australia: Commonwealth Bank, Westpac, Australia and New Zealand Banking Group, and National Australia Bank.
“They totally dominate the Australian market and are the most profitable banks in the world,” says Tyro Payments chief executive officer Jost Stollmann. “We consider ourself a friend of financial tech startups and new growth companies that want to challenge this oligopoly.”
Stollman says the four major banks haven’t changed their business practices to making managing money and securing loans easier for small businesses in Australia. For example, accountants still need to do a lot of manual data entry and most business loans are mortgage-based, which means small business owners often have difficulty getting funds if they don’t own property. Tyro Payments’ platform, on the other hand, wants to make banking faster and easier by integrating with different software systems, and the company offers cash flow-based loans.
Tyro Payments will use part of its new funding to increase its engineering staff from 150 to 450 people. It claims its gross revenue grew 38 percent to $72.4 million in 2015, representing a compound annual growth rate of 38 percent over the past five years.