Atlassian Co-founder Pours $7M Into Australian Fintech Startup Before His Startup Goes To NASDAQ IPO

Mike Cannon-Brookes, a co-founder of Australia’s high-flying startup Atlassian, has joined with Tiger Global and TDM Asset Management to put a relatively large $72 million funding into Tyro Payments, an Australian fintech startup technology that is planning to soon operate as a bank for small businesses.  This is Tyro’s first funding from venture sources since its founding in 2003, with investments previously coming from seed and angel investors.

Sydney-based Tyro claims 14,000 clients, mostly small businesses, using a combined 500,000 payments terminals. Originally founded to create an efficient, scalable transaction processing system for SMEs in Australia, the company currently processes some $8 billion in payments each year and claims a compound annual growth rate of 38% over the past five years. Tyro also funs its own fintech hub, where entrepreneurs can interact and work together.

With the new funds and a recently acquired banking license, Tyro can meet the $36 million equity requirements and apply to operate as a bank, with the aim of serving small businesses. The bulk of the remaining capital will be directed to expand the Tyro platform, notably increasing the engineering staff from 150 to 450 people.

In entering the challenging small business lending market in Australia, Tyro is betting that its origin as a bank and technology startup will help it to go head to head with the top four retail banks in Australia and compete for small business accounts. Australia’s incumbent banks have invested heavily in fintech hubs, and research by Macquarie Bank cites $60 billion in unmet loan demand in Australia.

Investor Mike Cannon-Brookes, who is providing about 10% of this latest round of funding, has sat on Tyro’s board for the past six years. Cannon-Brookes’ own company, Sydney and San Francisco-based enterprise software creator Atlassian, filed a month ago to go public on NASDAQ.