Emirates’ World Investments will invest A$433 million in neobank Xinja over the next 24 months, the companies announced today.
The massive capital injection is subject to relevant approvals and an initial A$160 million will be invested immediately. The remaining A$273 million available to be drawn down in multiple tranches as Xinja Bank’s growth requires over the next two years.
“We think this is the largest single investment in an Australian neobank or startup, and combined with exceptional customer acquisition and deposit growth, positions Xinja Bank as a frontrunner in the Australian neobank market,” said Xinja Bank Founder and Chief Executive Eric Wilson.
Xinja Bank was granted a full banking licence in September 2019 and has previously raised $70 million. It offers transactions and savings accounts and has accumulated more than 45,000 accounts and more than $450 million in deposits. Xinja Bank will launch personal loans and home loans later this year.
World Investments is based in Dubai in the United Arab Emirates. It is an experienced investor in the banking industry around the world. It has significant equity holdings in banks across Europe, the Middle East, and now Australia.
World Investments CEO H.E. Zayed bin Rashid Al Qubaisi said, “We believe Xinja Bank is at the cutting edge of next generation banking in Australia. Its technology, commitment to customers and ethical banking philosophy made it an obvious investment choice for us.”
The deal comes after two years of negotiations and was finalised in the midst of the turmoil caused by the global coronavirus pandemic.
“We know that this is a very difficult time for Australia and the world and considering the health crisis we are all facing, this is not a time to celebrate,” Wilson said.
“I believe Xinja’s mission to help Australians make more of their money is going to be even more important in the coming year. We are only a small part of the economy, but we are committed to continuing to deliver the best in banking outcomes for our customers.”
When the RBA cut interest rates earlier this month, Xinja opted to stop new customers opening savings accounts in order to continue to take deposits from its existing customers and pay them a 2.25 per cent interest rate.