When you’re starting a business, the most important thing is understanding your product–market fit and go-to-market strategy from day one. Come in with strong hypotheses, and be ready to test and learn fast.
When Alex Molloy and Ritchie Cotton founded Valiant Finance in their mid-twenties, they weren’t just starting a business, they were responding to a disparity they’d observed in the financial services sector. As former consultants and analysts, they had gained a unique perspective on the lending landscape.
“We noticed a broad trend – brokers were wildly successful in mortgage broking, but in business banking we found not everyone had the business owners’ best interests at heart,” explains Molloy. “Interest rates could vary anywhere from 7% to an astonishing 100%, with deliberate obfuscation of terms. We witnessed deals being written up in the air with rates like 40% from certain lenders.”
This lack of transparency was actively harming small businesses across Australia. It was in this environment that Valiant Finance was born in 2015, with a clear mission to bring access, simplification, and transparency to business lending.
“We saw there was a reasonable end of the market and a not so reasonable end of the market,” says Molloy. “The question was: how do you make a solution that’s scalable when the average loan size is only around $50,000-$60,000?”
The answer lay in combining human expertise with innovative technology. A dual approach that would become Valiant’s cornerstone philosophy.
Building a business that champions SMEs
From the beginning, Valiant’s growth strategy centred on providing genuine value to small and medium enterprises (SMEs) that were traditionally underserved by mainstream finance.
“We started in unsecured lending where demystification was necessary,” Molloy recalls. “Then we expanded into capital finance and commercial lending as we built our expertise and network.
A critical strategic decision was to build relationships with a diverse range of lenders instead of relying on just a few partners. “This gives us incredible flexibility to find the right solution for each client’s specific situation.”
Another decision was focusing on long-term client relationships rather than one-off transactions. With 60% of their business coming from repeat customers, this approach has clearly resonated in the marketplace.
“We don’t squeeze on the first deal,” says Molloy. “We want a long-term relationship. Our business has grown sustainably by focusing on existing clients and helping them at each stage of their growth journey.”
Human-powered technology
In an industry increasingly dominated by either fully automated solutions or traditional broker models, Valiant has carved out a distinctive niche by combining the best of both worlds.
“We’re a human-powered technology company,” Cotton explains. “Our approach combines innovative technology with expert human guidance, ensuring businesses receive personalised solutions that consider their unique circumstances and goals.
“This hybrid model allows us to deliver both efficiency and personalisation. Our technology platform helps match businesses with the right lenders, while our team of experts understands the nuances that algorithms can’t capture.
“Most people go to their bank first, then come to us when they’re knocked back. We’re customer champions. Our technology helps us efficiently analyse options, but it’s our human expertise that ensures we find the right fit.”
Innovation at Valiant isn’t just about building better algorithms, it’s about creating better outcomes for businesses. By maintaining relationships with dozens of lenders, they can quickly adapt to changing market conditions and evolving client needs.
“In Australia, we’re still just scratching the surface,” says Cotton. “In the US, it’s a software-driven market, so we’ve built an embedded finance product which is working well for us there. This technological capability, combined with our deep understanding of lending markets, gives us a significant competitive advantage.”
The uphill battle
Building a fintech startup is never without obstacles, and Valiant has faced its share of challenges along the way. “COVID was tough,” Molloy admits. “We were dealing with high uncertainty and low business confidence during that period.
“The pandemic created a difficult environment for business lending, with many lenders tightening their criteria precisely when businesses needed support most. However, this challenging period highlighted the value of Valiant’s diverse lender network, allowing us to continue finding solutions when many traditional options had dried up.”
Another significant challenge was building credibility in a sector where trust is paramount. As young founders – Molloy was 26 and Cotton was 25 when they started Valiant – they had to overcome scepticism from both clients and potential partners.
“We addressed this by being transparent about how we work and consistently delivering on our promises” says Molloy. “We built trust by being the good guys in finance, doing the right thing, and getting clients good deals.”
Fundraising presented its own challenges. While Valiant has successfully raised $40 million since its founding which includes investments from Reinventure and 1835i who are linked to Westpac and ANZ, they’ve maintained their independence. “Balancing growth with maintaining our mission has required careful navigation,” explains Molloy. “But we’ve stayed true to our core values of transparency and acting in our clients’ best interests.”
Lessons for aspiring entrepreneurs
It’s also wise to keep business and personal finances separate. No ATM withdrawals at the TAB, no gambling debt. It can be tempting to use a personal account as an overdraft for your business, but this creates a messy financial picture that makes lenders nervous.
Having funded over 20,000 Australian SMEs and facilitated more than $2.5 billion in loans in the past two years, Molloy and Cotton have learned a thing or two.
“First, understand what makes your business ‘financeable,’” they both advise. “Many businesses don’t realise how factors like ATO debt can impact their ability to secure funding. For example, while many think the ATO is a cheap creditor, it’s actually terrible for business lending.
“It’s also wise to keep business and personal finances separate. No ATM withdrawals at the TAB, no gambling debt. It can be tempting to use a personal account as an overdraft for your business, but this creates a messy financial picture that makes lenders nervous.
“Further, we recommend establishing an ABN and register for GST as soon as possible. This allows you to prove to lenders you’ve been trading for some time, even if revenue is minimal. Then by six months or 12 months, you’ll find you can start to get access to equipment finance like a work vehicle, tools of the trade etc. allowing you to grow sustainably.
“When you’re starting a business, the most important thing is understanding your product–market fit and go-to-market strategy from day one. Come in with strong hypotheses, and be ready to test and learn fast.”
“The hardest part about starting a business is honestly the people element. Finding and managing the right talent is always a challenge but it’s also the most rewarding when you build a team united by a common purpose,” says Cotton.
As Valiant continues to grow, the duo remain committed to their original mission – bringing transparency to business lending and connecting Australian SMEs to the right financial solutions at the right time.
“We want businesses to use debt rationally because, for the most part, they’re using it to grow,” Molloy concludes. “Our job is to make sure they get the right solution on the best possible terms. It’s about being a long-term partner in their business growth journey.”
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