Tyro raises $100 million to become a bank

Tyro recently expanded its payments instore. Image supplied.

Australian payments company Tyro has raised $100 million from prominent investors, including US Asset manager Tiger Global and Atlassian’s Mike Cannon-Brookes.

The cash will be put towards the company’s move into small business lending, after Tyro spent the last 12 years growing its payments business. Tyro has more than 14,000 customers out of 550,000 EFTPOS merchants and processes $8 billion in transactions a year.

Tyro recently received a banking license and plans to use half of its capital raising to apply to call itself a bank – a minimum $50 million in equity is required for the application.

With a banking license Tyro can start taking deposits, and the deposit guarantee of a bank, Tyro will be able to compete against the banks on a level other fintech companies are unable to.

“It is a bank, the cost of capital is completely different. We have fully government guaranteed deposits, we already have a huge acquiring business and we will be a full service bank. There’s not just cash flow, there’s lots of other sorts of loans we can offer” says Cannon-Brookes, Atlassian co-founder and Tyro board member.

Some of the rest of the $100 million will be put into expanding the Tyro platform, including hiring software engineers.

And with the data from its 14,000 clients, Tyro CEO Jost Stollman says it will be able to make loans the banks cannot.