Aussie challenger Xinja lands $255m from Emirates’ World Investments
Xinja, an Australian neobank, has landed a notably large $255 million (AUD 433 million) capital injection from Emirates’ World Investments (WI), an investment group based in Dubai.
With an immediate initial investment of $94 million, Xinja will then receive the remaining $161 million over a period of 24 months as it grows.
Xinja’s CEO Eric Wilson tells The Australian that, amid the growing pandemic, the capital raise would have been “almost impossible” through equity markets, highlighting the stability of private investments right now.
Xinja’s CEO Eric Wilson
“It was certainly easier for us to do the deal being a private company than a public company,” says Wilson.
The challenger bank is calling it “one of the largest investments in an independent Aussie start-up”, and there is likely some truth in this.
Last year saw just five funding rounds from Australian start-ups exceed AUD 100 million.
Among them were design tool service Canva’s two rounds totalling at $155 million, and fellow Aussie challenger Judo Bank’s record-breaking round which raised a staggering $400 million.
Xinja says it will use the new funding, which is still “subject to relevant approvals”, to underpin its technology capability and grow its customer base.
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Wilson says this investment pits it “as a frontrunner in the Australian neobank market”, combined with the bank’s deposit growth which has now grinded its 2.25% interest account to a halt for fear of not being able to deliver on the high rate to so many customers.
Granted a full banking licence in September last year, Xinja launched its Stash savings account in January. In the seven weeks that followed, it managed to accumulate $178 million (AUD 300 million) in deposits.
It now says it’s gathered a further AUD 150 million, putting deposit totals at roughly AUD 450 million.
The challenger also announced a $33 million Series D funding round at the beginning of this month with a minimum investment on offer of AUD 20,400 to give some customers a buy-in opportunity.
Its latest investor WI, which holds equity holdings in banks across Europe and the Middle East, revealed why it chose Xinja.
“We believe Xinja is at the cutting edge of next generation banking in Australia,” says WI’s CEO Zayed bin Rashid Al Qubaisi.
“Its technology, commitment to customers and ethical banking philosophy made it an obvious investment choice for us.”
The funding is the result of two years of discussions according to Xinja, which now has more than 45,000 customer accounts.
Read next: Australian neobank Xinja launches $33m Series D with customer buy in opportunity
