Australia’s fastest growing mortgage origination startup - Tic:Toc Online - has posted a bumper rise in annual revenue but higher expenses pushed it to a deeper loss last year.
The Adelaide-based company, which currently markets home loans funded by Bendigo Bank, posted a 36 per cent increase in its operating loss to $7 million for the 12 months to the end of June.
Investor support for the company surged during 2022 as fund managers and Bendigo Bank poured more capital into the business.
Tic:Toc’s paid up equity more than doubled to A$50 million on 30 June, as new and past investors tipped an additional $30 million into the business.
Apart from longstanding investors such as Bendigo, IAG and Genworth, Tic:Toc’s main backers now include Regal Funds Management which stumped up $5 million last November.
The company’s total revenue almost doubled to $21.8 million last year as it began to diversify its income-generating streams and secured more government support.
While Tic:Toc sources most of its revenue through home loan origination fees, its fastest growing streams in 2022 were its platform as a service operation (known internally as the enterprise division) and taxpayer-funded research and development grants.
Mortgage origination income grew more than 70 per cent to $14.2 million as the company’s proprietary home loan platform generated new volume growth under the Bendigo distribution deal.
The enterprise division, which provides loan origination technology services to external lenders, grew revenue by 150 percent to $5.3 million.
Government R&D grants also more than doubled to $2.35 million.
In a commentary attached to the financial accounts, founder and chief executive Anthony Baum highlighted growth in the enterprise division.
“Tic:Toc has completed a successful FY22 validating the sustainability and strength of our business model whilst continuing the evolution to a market enabling platform technology provider,” he told shareholders.
“In Enterprise, we signed another two major platform as a service partnerships, with both targeted to launch digital home loans powered by Tic:Toc in FY23.”
One of the enterprise division’s new clients is the country’s largest mortgage aggregation service, AFG.
Under a deal struck a few months ago AFG will soon market non-conforming mortgages and alternative credit products to borrowers using a platform supplied by Tic:Toc.
The expansion of the enterprise division contributed to a big rise in staff headcount and the variable cost base of the company.
This resulted in employee benefits expenses soaring $6 million to $14.5 million in the 12 month period.