Funding Circle announces $150 million investment to fuel growth
Investment comes as lending through the Funding Circle marketplace passes $1 billion globally, benefitting over 8,000 businesses in UK and US.
Funding Circle, the world’s leading online marketplace for business lending, today announces it has raised $150 million (~£100 million) in equity capital, in a round led by DST Global, with participation from Baillie Gifford, a fund managed by BlackRock, Sands Capital Ventures and Temasek. Goldman Sachs acted as exclusive placement agent for the oversubscribed round. The new funding will be used to consolidate the UK and US markets and fuel further growth.
The investment comes as lending to small businesses via the marketplace surges past the $1 billion mark globally, following sustained growth in both the UK and US markets. Investors at Funding Circle are on track to lend $1 billion over the next year, showcasing the huge potential of marketplace lending on the global economy.
Launched in 2010, Funding Circle is sparking a revolution in the way small businesses access finance, disrupting the traditional model of banking. Through the Funding Circle marketplace, small businesses can access finance, whilst thousands of investors, including 38,000 people, the UK government and financial institutions can earn attractive returns. In the UK, the Funding Circle marketplace is currently the fifth largest net lender to small businesses*, while in the US, lending in the first quarter of this year was seven times larger than lending in the first quarter of 2014.
Samir Desai, CEO and co-founder of Funding Circle said: “We believe Funding Circle is the future of small business finance globally, and it’s a vision we share with some of the largest and most respected investors in the world. Today’s news is the next step on our journey to creating a sustainable, category-defining business in a multi-billion dollar global market, where businesses will come to the marketplace to borrow from all types of investors. This investment, alongside prudent risk management, will ensure Funding Circle’s long term future.”
“We are delighted to support Samir and the team at Funding Circle as they continue to grow and deliver value to both sides of their marketplace,” said Yuri Milner, founder of DST Global.
In addition, Funding Circle has bolstered its leadership team with the appointments of David Yu as Global Chief Product Officer and Chitra Nayak as US Chief Operating Officer.
The former CEO and CTO of Betfair, Yu has extensive experience driving forward successful technology companies. As Betfair’s CEO, he grew revenues to over $600 million by emphasizing the development of new products and spearheading the company’s geographic expansion. Nayak, the former COO of Platform at Salesforce, also has extensive experience building global businesses. Ms Nayak grew Salesforce’s pipeline from $350 million to $2 billion during her time leading the company’s global sales development.
In total, Funding Circle has now raised $273 million in equity funding, and existing investors include Index Ventures, Accel Partners, Union Square Ventures and Ribbit Capital. In July last year, Funding Circle announced its Series D round for $65 million, and welcomed Robert K. Steel, CEO of Perella Weinberg Partners, to the board.
Michael Rubin, Managing Partner of Sands Capital Ventures said: "We look forward to supporting Funding Circle as it continues to transform small business lending with efficiency, transparency and industry leading customer service."
By bringing together industry leading risk management and cutting edge technology, Funding Circle’s proven marketplace model enables businesses to access finance in days compared to months with a bank. Independent research has found that three in four businesses would come to Funding Circle first in the future, ahead of a bank.**
About Funding Circle
Funding Circle (www.fundingcircle.com) is the world’s leading online marketplace for business loans, matching small businesses who want to borrow with investors who want to lend in both the UK and the US. Since launching in 2010, investors at Funding Circle - including 38,000 individuals, financial institutions and even the UK Government - have now invested more than $1 billion in 8,000 businesses globally, and currently lend ~$80 million per month. Funding Circle was the first financial technology company to announce a formal referral partnership with Santander, one of the UK’s leading high street banks, and has since announced a similar partnership with RBS. It has raised $273 million in equity capital from the same investors that backed Facebook, Twitter, Airbnb and Alibaba.
** Nesta, Banking on Each Other, 2013 – Funding Circle UK data only.