RateSetter, the UK-based FinTech firm, has managed to rake in £13 million in equity funding from its existing investors, bringing the value of the firm to more than £200 million.
The peer-to-peer lending platform attracted the support of backers including Woodford Investment Management and Artemis.
Established in 2010, RateSetter enables ordinary people to invest their money by directly lending it to other consumers at attractive rates. In doing so, it cuts banks, which traditionally lie between the two parties, out of the chain. Although the lender faces an increased amount of risk, potentially, there is a higher return to be earned. The company, which also has an Australian subsidiary, has over 300,000 active lenders and investors on its platform.
Its method of cutting out intermediaries and linking individuals and companies directly with investors willing to lend is similar to other peer-to-peer firms such as Zopa, and Funding Circle. This has proven to be an effective method of attracting customers, promising high rates of interest on the loans they make. This new kind of ISA lets investors put their peer-to-peer loans in an ISA wrapper, ensuring that the lenders earn interest-free of income tax.
According to a statement, RateSetter, having raised £40 million in capital to date, will use the new inflow of funds to scale up ahead of launching its Innovative Finance ISA. Rhydian Lewis, founder, and CEO of RateSetter commented on the news:
RateSetter is giving ordinary investors the opportunity to access better returns and borrowers the opportunity to look beyond their bank. It is important to keep up the momentum of investing in our platform and this further injection of capital, coupled with the appointment of Paul Manduca as chairman, lays the ground for an important new phase of development for our business.
He also mentioned that the platform has already delivered over £70 million in interest to its lenders. RateSetter has also previously raised £10 million and £20 million in venture funding in 2014 and 2015 respectively.
According to RateSetter, the new funding round brings its value to “over £200 million,” but it doesn’t give a specific figure. The company has lent £1.9 billion over its platform since launch.