Athena lines up stealth capital raising, delaying valuation questions
Athena Home Loans – the start-up mortgage lender attempting to challenge the dominance of the major banks by offering lower rates to good borrowers – is raising $20 million from existing investors using a funding mechanism that lets it keep its valuation in a falling market.
Founded by former senior National Australia Bank staff Nathan Walsh and Michael Starkey, Athena broke the record for the largest capital raise completed entirely from local investors in 2021, when it banked $90 million in funding amid major growth in its loan book.
Athena Home Loans chief executive Nathan Walsh says the company is raising money to expand. Peter Braig
Mr Walsh, now Athena’s chief executive, said the $20 million raise would help the company capitalise on its deal to offer loans under REA Group’s Mortgage Choice brand.
“The capital raise will support our ongoing investment in platform, product and customer experience,” said Mr Walsh.
Documents lodged with the Australian Securities and Investments Commission showed Athena had been seeking up to $25 million from investors. It is attempting to secure those funds through a mechanism known as a simple agreement for future equity, or SAFE, which allows backers to contribute money in return for future discounted shares.
The agreements have become more popular amid more difficult fundraising conditions because they do not require the company to set a fresh value for its shares, as is the case with typical capital raisings.
The Australian Financial Review reported in April that data from Cake Equity – used by start-ups such as Linktree, Mr Yum and Shippit to manage their fundraising – showed a dramatic increase in SAFEs or convertible notes.
Growing valuations are key to a start-up’s prospects
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