Australian challenger bank Volt abandons IPO plans and $50m fundraise
Steve Weston, the CEO of Australian challenger bank Volt, has announced the scrapping of a planned A$50m fundraise from international investors and a delay to the bank’s expected 2020 public listing.
The news, first reported by The Australian Financial Review, comes as Australian digital banking players have struggled to maintain their high interest rates which have lured in billions of dollars worth of consumer deposits.
As Australia’s central bank has slashed the country’s base rate, so too have these challengers been forced to abandon their lucrative growth strategies.
“It was going along nicely, but then the coronavirus hit and it was difficult for people to complete due diligence and travel, so we postponed it. We’ll still keep in touch with the offshore investors we were speaking to in the past, but it’s difficult conditions for them,” Weston told The Australian Financial Review.
Now the bank will instead launch a A$15m rights issue to its existing investors, while also launching home loans before the end of the year.
Volt had been planning on bringing its mortgages and business lending to market, however these have now been delayed.
“I’m frustrated we’re not in the market now, but it’ll be shown to be a prudent decision in future years,” said Weston.
It’s not all doom and gloom however, Volt already raised A$70m in January as part of its Series C round, and rival digital bank 86 400 also closed a A$34m Series A only last month.