Bendigo and Adelaide Bank has sunk another A$5 million into booming digital home loan originator, Tic:Toc Online, ahead of an expected float of the company later this year.
The bank’s interest in Tic:Toc was rapidly diluted in the last 18 months as private and institutional investors acquired freshly issued scrip in the company.
According to disclosures made by Tic:Toc to ASIC, Bendigo remains the second largest shareholder on the company’s register, with a 27.2 per cent interest in the business.
Bendigo acquired 48, 976 new shares in the Adelaide-based company in a private capital raising conducted in November, which boosted the bank’s holding to 599,670 shares out of the 2.2 million on issue.
The bank paid $102.09 for each of the new shares, which implies a market value of $61 million for its total holding in the business.
Tic:Toc has been a major driver of Bendigo’s steepening home loan volumes since 2019 and is viewed by the bank’s management as a key channel for lowering mortgage origination costs.
The platform, which leverages artificial intelligence to process applications and slash approval times, almost doubled its loan origination volumes to $839 million in the 12 months to the end of June.
That activity is set to escalate in coming years after Bendigo in July agreed to boost funding support for Tic:Toc to $25 billion over the next seven years.
However, Bendigo’s strategic grip on the platform is likely to be tested as Tic:Toc’s founder and chief executive Anthony Baum broadens the firm’s marketing alliances to include other lenders such as the CBA-owned Aussie Home Loans.
In the last year Baum has been aggressively marketing the company’s business case to brokers and prospective investors across the country.
Baum is the largest shareholder on the Tic:Toc register through a family investment vehicle – Antvic Holdings Pty Ltd - that owns more than 30 per cent of the business.
Stockbrokers are expecting documentation for an initial public offer to surface in the second half of 2022.
The current $102 price tag on the company’s shares implies a market valuation of around $240 million.
There was frenetic activity on Tic:Toc’s private share register in the weeks leading into January, with ASIC lodgements showing that the company’s paid-up capital base more than doubled in less than eight weeks.
Tic:Toc had around $22 million of paid up capital in October but that ballooned to $50 million last week after new and established investors ploughed millions into the operation.
Sydney fund manager, Regal Funds Management was the most active buyer of the company’s scrip before Christmas after it forked out $15 million for a 6.6 per cent stake.
Regal was joined on the register earlier this month by another Sydney investment company, LHC Capital, which tipped in $5 million for a 2.2 per cent interest.
IAG Ventures, a longstanding investor in Tic:Toc, also pumped more cash into the business with a top-up of almost 30,000 shares.
IAG holds a 4.2 per cent stake estimated to be worth around $9.5 million.