Business-focused neobank Judo Bank has completed its third capital raise, taking its valuation to well over $1 billion.

The bank said it raised the $230 million from existing shareholders, given the global economic uncertainty around the COVID-19 pandemic.

“We’re delighted with the outcome,” co-founder and co-CEO David Horney told AAP.

“We’ve built an enormous amount of momentum to lending to small and enterprise communities in Australia. It puts us in a very strong position.”

The valuation puts Judo Bank in unicorn territory, at least in Australian dollar terms.

Founded four years ago in Melbourne, Judo is the only neobank focused on small to medium sized businesses.

Mr Horney said its average loan is for $2 to $3 million and its customers run the gamut of Australian SMEs.

“We’ve really built Judo from the ground up, you go back to relationship with SMEs from day one,” he said.

“At times like this, the relationship banking really comes to the fore.”

The shareholders were mostly 15 deep-pocketed and sophisticated institutional investors, including Bain Capital Credit, Ironbridge Capital, Abu Dhabi Capital Group and the Ontario Public Services Pension Trust.

Judo said the investment gave it one of the strongest capitalised tier-1 ratios in the country, and it intended to rapidly grow its national footprint and its loan book to $3 billion.

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