Category Archives: LENDERS

Meet Lex Greensill and the fintech that’s Australia’s newest $2b success story

A supply chain financing company with its roots in regional Queensland Australia, Greensill, has become the country’s next $1 billion-plus unicorn, thanks to a $US250 million ($336 million) venture capital injection from growth equity firm General Atlantic, which also creates the country’s newest top rich listers.

Queenslander Lex Greensill started his own finance supply-chain company that’s now worth $2.2 billion. John Chapple

Greensill, founded in 2011 in London by Bundaberg-born farmer Lex Greensill, 41, provides businesses in industries from telecommunications to manufacturing with working capital based on their invoices, allowing them to be paid faster and fulfil the work, without shortening payment terms for the buyers.

The capital raise, which is the first for the previously bootstrapped company that had only taken capital from family and friends, values Greensill at $US1.64 billion and makes Mr Greensill and his brother Peter, who runs the family sugar cane and sweet potato farm in Bundaberg, collectively billionaires.

“The business is extraordinarily capital efficient and we’ve invested fully ourselves in growing the business because we wanted to maintain control,” Mr Greensill told The Australian Financial Review.

“The firm is still substantially owned by myself and the staff and I’m very proud of that … Dozens and dozens of our employees have become millionaires on the back of this.

“We weren’t looking to raise at all. General Atlantic approached us and the strength of their experience in multiple markets where we’re looking to grow, combined with the capital and expertise, made it worthwhile. But there are no plans to raise again or do an initial public offering.”

The investment from General Atlantic, which gives it a minority stake in the company, will allow the business to aggressively expand in major markets where it’s only got a small presence – China, India and Brazil – as well as rolling out in Africa.

From Bundaberg QLD to London

Having been raised on his family farm and seeing his parents deal with long payment terms, Mr Greensill worked full time in a law firm after finishing high school and undertook a law degree by correspondence.

After becoming a solicitor, he joined a few start-ups based in Sydney during the dotcom boom, one of which was in supply-chain finance.

This venture ultimately failed and Mr Greensill went on to be involved in a few other start-ups, before making the move to London and eventually starting Morgan Stanley’s supply-chain finance business, before moving to Citibank during the global financial crisis and becoming managing director of its supply-chain finance business for Europe, the Middle East and Africa.

But Mr Greensill, who has also been an adviser to former British prime minister David Cameron and US president Barack Obama, said he became frustrated with the big banks’ inability to adopt new technologies quickly and decided to start his own firm.

“I ultimately decided there was a bigger opportunity outside of the bank because so much of the market was not being served by them and they weren’t adopting technology at the pace I thought they needed to,” he said.

“Our business model is that we work on an industrial scale. We’re low margin and we’re passing through the advantage of the extraordinary access we have to Greensill Bank [in Germany] and capital market financing through to battlers in Australia and the 56 markets we serve.

“Full enrolment online takes under one minute and in terms of accepting legal terms and conditions, it takes just one click. We marry our financial and capital markets technology as one of the biggest bond issuers in Europe, together with access to the enterprise resource planning systems of our customers in order to make credit available.”

‘I’m a farmer at heart’

Greensill bought a German bank in 2013, whose balance sheet it uses to invest in its various programs.

The company is growing at around 300 per cent year-on-year and in Australia it has gone from providing $US800 million in working capital to businesses in 2017 to more than $3 billion in the first six months of 2018.

In 2017 it made a profit of $US32.9 million on $US115.9 million in revenue.

“We see ourselves as the Amazon of the working capital world … We’ve come a long way, but the marketplace we play in is quite enormous,” Mr Greensill said.

“Our market share today is about 0.4 per cent, in a market with the potential size of a $US3.5 trillion asset requirement. That’s the market we’re going after. We want to go from 0.4 per cent to [the full] $US3.5 trillion.”

Mr Greensill’s brother Peter also sits on the board of the company, but day-to-day runs the family farming business, which is separate to Greensill.

While the company was founded in the UK, Greensill is still registered in Bundaberg and Mr Greensill, who was named a Commander of the Order of the British Empire last year, has no intention of ever changing that, admitting he’s still a farmer at heart.

“Bundaberg is my home. It’s where I came from and I visited there about eight times last year with my wife and. We have never considered the thought of changing our roots,” he said.

“I’m a farmer at heart. Whenever I’m home I jump on a tractor and have a play. I don’t think of myself as a corporate titan.”

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Henry Sapiecha

Westpac refunds $65m to 200,000 customers over discount errors

Westpac is refunding $65 million to about 200,000 customers after it failed to pass on benefits they should have received under package deals offered by the bank.

The bank on Thursday said an internal review had detected problems whereby it failed to automatically pay consumers all the benefits they were entitled to under packages sold through Westpac, St George, BankSA and Bank of Melbourne.

“When we identified these issues, we started the process of putting things right for customers. We also notified ASIC [regulator the Australian Securities and Investments Commission],” Mr Frazis said in a statement.

“Westpac apologises unreservedly for a process that did not suit customers. By automating the discounts, we have ensured that our customers will not be affected in this way again.”

Under the packages, customers were meant to get discounts on products including home loans, credit cards and transaction accounts, but the bank said it had not given the discounts on “ancillary” products including home and contents insurance.

The chief executive of Westpac’s consumer bank, George Frazis, apologised and said all affected customers would receive refunds.

The refunds are expected to total $65 million, or $45 million after tax, and will be included in its upcoming full-year results.

The refunds being paid by Westpac are for customers who took out “Premier Advantage” or “Advantage” packages with the bank from 2010.

Earlier this month, Mr Frazis said Westpac would also scrap “outdated” rules that resulted in customers being charged fees if they made more than a certain number of transactions each month, and it put a $5 cap on personal account-keeping fees.

News of the refund comes as National Australia Bank and Commonwealth Bank will appear before the federal government’s banking inquiry on Friday, following last week’s questioning of Westpac chief executive Brian Hartzer and ANZ Bank chief Shayne Elliott.

Henry Sapiecha

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Henry Sapiecha

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Henry Sapiecha

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Henry Sapiecha