Deal will enhance existing partnership with Mortgage Choice
REA Group has announced it will acquire an almost 20% stake in Athena Home Loans, in a deal welcomed by the digital non-bank lender.
The agreement is for a 19.9% interest in Athena and includes consideration of up to $62 million for the transaction.
The News Corp-owned REA Group also includes broker franchise network Mortgage Choice and real estate data firm PropTrack.
In an announcement to the ASX, REA Group said the Athena deal would be funded by the Group’s existing cash reserves, with REA taking two seats on Athena’s board. The proposed investment is subject to certain conditions, including regulatory approval, and is expected to complete in one to two months.
Athena CEO and co-founder Nathan Walsh (pictured above right) said the lender was a on a growth path and thrilled to have the support of a culturally aligned company such as REA.
REA and Athena first formed a strategic partnership in 2022, bringing together Athena’s innovative home loan products with the distribution network of REA’s Mortgage Choice.
In June 2023, the Mortgage Choice Freedom suite of white label products was launched. These were developed in collaboration with Athena, which delivered $1.2 billion in settlements in FY24, exceeding expectations.
REA Group’s purchase of a 19.9% stake in Athena comes at the same time as REA’s third acquisition offer to Rightmove, the UK’s largest online property portal, was turned down.
Rightmove said the Group’s updated offer of £7.59 per share made on Wednesday was still insufficient to draw the company into negotiations.
Partnership will extend Athena, Mortgage Choice tie-in
REA Group CEO Owen Wilson (pictured above left) said the Group continued to invest in new technology to accelerate its strategy and deliver greater value to consumers, customers, Mortgage Choice brokers and shareholders.
“REA’s proposed investment in Athena will further enhance our existing partnership and reinforces our commitment to providing Australian homebuyers with greater choice and a seamless consumer experience when finding and financing property,” said Wilson.
He said growing Mortgage Choice’s national broker network and evolving a digital mortgage offering for the 12 million Australians who visit realestate.com.au was an important part of REA Group’s financial services strategy.
“An equity investment builds on the success of our innovative Mortgage Choice Freedom home loan products and forms a strong alliance to support the delivery of our strategy, while also benefiting from Athena’s growing loan portfolio.”
Athena welcomes REA Group investment
Walsh said Athena was committed to providing Australians with alternative fair and transparent lending solutions, and driving this agenda with industry leaders to benefit more borrowers.
He said Athena was on an exciting growth trajectory and was “thrilled to have the support of a culturally-aligned company like REA, building on the proven success of our partnership to date”.
“REA joins a strong list of Athena investors, and we are proud to be working with this industry leader to continue our mission of changing home loans for good for all Australians.”
This includes venture capitalists (Square Peg, Airtree and Apex), super funds (Host Plus, Australian Super and Australian Retirement Trust), and Macquarie and Salesforce Ventures.
Walsh said Athena’s ambition since day one had been to champion change for home loan customers. “In a $2.3 trillion market, this means partnering with like-minded thought leaders.”
He said brokers were a critical group to deliver this change for good, driving almost 74% of mortgage originations and growing.
“Athena is a certified B-Corp, founded with a mission to change home loans for good.
“That starts with understanding the critical role of brokers and valuing the expertise they bring – a set of professionals who help Aussie families navigate one of the biggest and most complex financial decisions many will ever make.”
Walsh said harnessing broker partners’ collective experience enabled Athena to co-create market-leading products and best in class digital experiences to benefit brokers and their customers.
“Over the past 12 months, we have built collaborative partnerships with Mortgage Choice and LMG. We are here to support broker growth, and we are funding fit to realise this at rapid scale,” he said.
RMBS issuance
REA Group’s investment in Athena has occurred at the same time as Athena’s second RMBS issuance this year under its Olympus program, which priced today and raises an additional $1b of debt funding.
Athena co-founder and COO Michael Starkey (pictured above centre) said the lender was focused on “building a business with a reputation for transparency, fairness and integrity” and this was resonating with customers and brokers.
“We have settled more than $8 billion in home loans to date and we are supported by the country’s leading investors,” Starkey said. “We are excited about the next phase.”
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