Trade Me Leads $10m Capital Raise in P2P Lender

Media Release FOR IMMEDIATE RELEASE

TRADE ME LEADS $10M CAPITAL RAISE IN P2P LENDER HARMONEY

Trade Me and Heartland win over strong international competition

Auckland, 12 January 2015 – New Zealand’s first peer to peer (P2P) lending platform Harmoney confirmed a successful capital raise of $10m today, after receiving multiple offers from investors in New Zealand and overseas.

The successful investors are existing shareholder Heartland New Zealand, and NZX and ASX-listed Trade Me which becomes a new minority shareholder, strategic partner and distribution channel. Trade Me, New Zealand’s leading online marketplace and classified advertising platform, has invested $7.7m for a 15 per cent share in Harmoney.

Harmoney CEO Neil Roberts said it was fantastic to have publicly listed Trade Me on board as a key investor and partner. “The investment is a great endorsement for Harmoney but more importantly we gain a strategic partner and distribution channel with deep domain knowledge of building and running an online marketplace.

“Trade Me operates the country’s most popular online marketplace with more than 700,000 domestic browsers visiting it every day. Combining Trade Me’s experience and distribution with Harmoney’s proven ability to bring innovative financial services products to market is the most exciting part of this transaction.”

Trade Me CEO Jon Macdonald said consumer finance and P2P lending were proving sustainable and successful overseas. “It is early days but we think there’s a lot of potential for P2P lending to work well in New Zealand, and of course consumer finance is a large and well-established industry here. To us it looks like an area of the market that will undergo a long-term structural shift online – and we believe Harmoney is well-placed to take advantage of this.”

He said Harmoney and Trade Me were a great fit too. “We share a common purpose in that we are both all about providing Kiwi consumers with a safe, trusted, scalable, efficient online platform to undertake a transaction – the Trade Me platform is all about items changing hands, and Harmoney’s platform is all about dollars changing hands.”

Mr Macdonald said the Harmoney team had done an excellent job gaining a foothold in the local P2P market. “Harmoney has good momentum. It also has a strong team with a lot of experience in and around consumer finance, and we like their plans for the future too. We’re excited about being involved.”

Mr Roberts added that the decision to raise capital at this time was in response to customer demand that has driven rapid month-on month growth since the launch of the Harmoney platform.

“Since launching Harmoney in September we have experienced exponential growth. This recent capital raising, alongside the strategic partnership with Trade Me and the continued support of Heartland New Zealand means we can rapidly scale our offering, develop new products and gain exposure to a wider range of the New Zealand public.”

ENDS

[Clarification: Further to the Harmoney release this morning this note clarifies the capital raising.

The valuation is pre money $45m and post, $55m. The calculation is below:

TM has also been awarded free warrants that could increase its shareholding by 0.9% to 15%.]

Notes to Editors –

Peer to peer lending has been extremely successful overseas, changing the way that people borrow and invest, and in the process, is experiencing huge growth. The UK Government has lent more than NZD200 million via P2P lending platforms while approving the investment class for pension plans and tax free savings. In the USA, Lending Club, the leading platform, completed one of the most successful IPOs in history taking just minutes for the offer to be fully subscribed and ending the first day of trading valued at over NZ12 billion. Independent analysis by Foundation Capital predicts that marketplace lending will be a trillion dollar market by 2025.

Harmoney is the first and only lender in New Zealand to be granted a peer-to-peer license by the sector’s regulator, the Financial Markets Authority.

ABOUT HARMONEY

Harmoney operates New Zealand’s first licensed Peer to Peer Lending platform bringing together people that want to lend and prime creditworthy borrowers that want to borrow, a marketplace that has existed for generations but until now has been closed to retail investors.

Harmoney’s founders and management team have a proven track record starting a business in 2001 that processed $3b in personal loan applications over a 5 year period before a successful sale to a US based conglomerate. The team has delivered shareholder value in excess of $1b over 12 years both in New Zealand and Australia.

New Zealand is one of the first countries in the world to overhaul securities law and to allow for peer top peer lending platforms which can act as a challenge to traditional banks and finance companies.

The service providers are regulated, licensed and policed by the Financial Markets Authority (FMA). Peer to Peer Lending Platforms operate with benchmark operational costs far lower than any main street bank the savings from which are passed on to lenders that invest using the platform.

The investor/lender takes the same risks that the bank takes and enjoys the retail return.

Harmoney is currently the only FMA Licensed Peer to Peer Platform in New Zealand

Visit www.harmoney.com

ABOUT TRADE ME

Trade Me (trademe.co.nz) is the place where Kiwis buy and sell online. As well as the well as the marketplace for new and used goods, it also operates Trade Me Jobs, Trade Me Property, Trade Me Motors and a bunch of other web businesses including Travelbug, Holiday Houses, FindSomeone, MotorWeb and LifeDirect. Trade Me has offices in Auckland, Wellington and Christchurch.

ABOUT HEARTLAND NEW ZEALAND

Heartland New Zealand is an NZX listed holding company for a specialist financial services group, the principal business in New Zealand being Heartland Bank (www.heartland.co.nz). Heartland Bank has a strong Kiwi heritage and is 100% New Zealand operated and managed. With a focus on the household, business and rural sectors, Heartland Bank offers specialist products different to those offered by the mainstream banks.

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