Funding Circle scores $100 million investment
12 January 2017 | 3859 views | 0
Source: Funding Circle
Funding Circle, the world’s leading lending platform focused exclusively on small business finance, today announces it has raised a further £82 million ($100 million) in equity capital.
Funding Circle announces $100 million equity investment to help thousands more small businesses globally
Led by Accel, the round saw participation from existing Funding Circle investors, including Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek and Union Square Ventures.
The new investment follows significant growth at Funding Circle over the last 12 months. Globally, investors on the Funding Circle platform lent more than £1.1 billion to small businesses in 2016, with approximately £400 million lent in Q4 alone, a record amount for any SME direct lending platform. In addition, in Q4 Funding Circle UK recorded 90% year-on-year growth and reached profitability.
Chancellor of the Exchequer, Philip Hammond, said: “Funding Circle has become a real success story for British Fintech and news that it has attracted £80 million of investment is further evidence of the growing importance of this industry. This is another vote of confidence in a UK firm that plays an important role in our economy - helping businesses to grow and create jobs.”
Samir Desai, CEO and co-founder of Funding Circle, said: “Funding Circle is changing the financial landscape for small businesses and investors globally, ensuring a better deal for everyone and helping to create a more sustainable and fairer economy. Today’s news is the next step on our journey to create a category-defining company that helps thousands of small businesses access finance and create jobs. Over the next 12 months, lending through the Funding Circle platform will create a further 50,000 new jobs, supporting economic growth in the UK, US and continental Europe.”
Funding Circle facilitates lending to small businesses from investors including 60,000 individuals, local and national government, the European Investment Bank and financial institutions such as pension funds. The investment comes as lending to small businesses through the platform passes £2.5 billion globally, benefitting over 25,000 businesses and creating 50,000 new jobs.
Harry Nelis, Partner at Accel, said: “We’ve been impressed by the Funding Circle team since our early investment in the company. It has achieved significant growth across multiple international markets by delivering an appealing lending option to SMEs and attractive risk-adjusted returns to investors on the platform. This investment makes Funding Circle the largest and best capitalised SME lending platform in the world, and we’re thrilled to continue to support its journey.”
Launched in 2010, the Funding Circle model has opened up small business lending to a wide range of investors, improving competition in the market, creating jobs and reducing dependency on bank lending. This latest investment is recognition of the efficiency of the direct lending model, and its ability to channel much-needed funds to the real economy, whilst providing investors with attractive, stable returns. In total, Funding Circle has now raised more than £300 million in equity funding from some of the world’s largest and most respected investors.
By bringing together industry leading risk management and cutting edge technology, creditworthy businesses typically access the capital they need in days rather than months. Research found that 94% of borrowers would come back to Funding Circle first in future, ahead of a bank.*