Peer-to-peer (P2P) lending is beginning to hit the big time. UK crowdfunding market leader Funding Circle has raised $65 million to grow its UK and fledgling Us operations.
According to Management Today, Funding Circle has helped more than 5,000 UK businesses borrow more than £300 million since launching in 2009. As well as appointing a “Wall Street big dog” to assist with its US expansion, company is on track to facilitate lending of $600 milion this year, $100 million of which it expects to be in the US, where it launched at the end of 2013. At the start of 2014 $300,000 of American loans were going through the site. In June it was more than $6.5m.
As banks continue to tighten up their balance sheets and limit their loans to small business, P2P lending is only going to get more mainstream
The latest funding round “was led by Index Ventures, which has backed everything from Dropbox to Skype, and previous investors Accel Partners, Union Square Ventures and Ribbit Capital. It means the crowdfunder has now raised $123m, just nine months after it’s last $37m fundraising,” reports Management Today.
“In its quest to expand Stateside, Funding Circle, which says businesses can get a loan in 7 days compared to 15-20 weeks through a bank, has also scored a big-name board appointment: Robert K Steel, the chief exec of boutique investment bank Perella Weinberg, ex-deputy to former New York mayor Michael Bloomberg and an ex-senior US Treasury official.
"'I have been impressed with the growth of the company over the past four years, and believe there is a unique opportunity for marketplace lending to revolutionize access to finance for small businesses across the globe,' Steel said in a statement."
As we reported last month, Funding Circle has an arrangement with the UK arm of Santander, which means the bank will refer on customers it doesn’t want. As banks continue to tighten up their balance sheets and limit their loans to small business, P2P lending is only going to get more mainstream.