The year 2017 has begun with a bang for fintech in Europe. Funding Circle, the London-based peer-to-peer lending platform that allows small businesses to connect with investors willing to lend them money, has raised another $100 million in funding of its own. The round was led by Accel, with other previous investors Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek and Union Square Ventures also participating.

Samir Desai, the co-founder and CEO, maintained that Funding Circle would not disclose its valuation, except to say that it’s “slightly higher” than its last raise in 2015, when it was already confirmed that the company was valued above $1 billion.

According to the startup, this is the largest funding round for a financial tech company out of Europe since April 2015 (a record actually set by Funding Circle itself, which raised $150 million that month). In a flurry of fintech flurry activity, just this week, mobile payments startup iZettle announced a $63 million raise; and CompareEuropeGroup raised $21 million.

Funding Circle’s latest round, a Series F, brings the total money raised to around $375 million, with the $100 million coming in at an interesting time for Funding Circle.

One consideration is the company’s rapid growth rate. In 2016, about £1.1 billion ($1.3 billion) was lent globally (it has operations in Europe and the U.S.; the U.K., which is now profitable for the company, is its biggest market, according to Desai). And of that amount, £400 million came in Q4 alone, working out to 90 percent year-on-year growth.

Throwing some light on the context of Funding Circle’s growth in the last year, the company says that the total lent on its platform since being founded in 2010 is a whopping £2.5 billion.

Another consideration, however, is that Funding Circle didn’t actually need the money, but this is a critical time for lending startups, given the scandals that have been whipped up around organizations like Lending Club and Wonga. Speaking to TechCrunch, Desai said,

“It’s been a challenging market, especially for online lending in the last year. But we are feeling pretty good about our relative position. We still have substantial funds from our last raises, but we wanted to take the opportunity to further capitalize the business. This helps build confidence with the U.K. and European governments that we’re here to stay. We have established ourselves as a credible alternative to traditional banks, and this round is a validation of our progress and the future of our business.”

He added, to that end, some money will be invested in continuing to build out Funding Circle’s platform and algorithms “to make it even more robust”.

 The pitch to governments — which both lend on the platform and also benefit from the general boost that it gives to entrepreneurship, jobs and the economy — seems to have accomplished its goal. Chancellor of the Exchequer Philip Hammond, in a statement to TechCrunch, 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.

Currently, Funding Circle works with approximately 60,000 individual accredited investors on its platform — which includes individuals, local and national governments, the European Investment Bank and financial institutions such as pension funds — which have loaned to some 25,000 businesses. What they intend is to build this out to also include retail investors, Desai said. Speaking about returns, he said that in the U.K. the company has paid out more than £100 million, which works out to an annual return of 7 percent.

As a business, Funding Circle plans to continue growing in its own markets, and perhaps acquire operations in other markets as a route to expanding to new places, which is how Funding Circle entered the U.S. when it acquired Endurance Lending Network in 2013. According to Desai, there are “no current plans to IPO” but longer term this will be the aim. He said,

We’ve always said that we’d like Funding Circle to be a listed business, in line with the things that we care about deeply like transparency and being a tech platform versus being a lender ourselves.

This continuity is one reason why Funding Circle appears to be in a comfortable space with its current pool of investors, rather than bringing in new ones. Harry Nelis, partner at Accel, said in a statement,

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.

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