Funding Circle raises $65m to fund international growth
Major backing doubles total investment in London-based alternative finance platform
Leading UK peer-to-peer lender Funding Circle today announced the completion of a major $65m Series D round of funding led by Index Ventures, set to back an ambitious programme of international expansion.
The investment takes the total raised by the fast-growing company to $123m, and marks one of the biggest-ever funding rounds in a UK start-up.
Listed in the 2012 Startups 100, Funding Circle allows members of the public to lend to small businesses listed on its website, representing an alternative to traditional bank lending.
Founded in 2010 by Samir Desai, James Meekings and Andrew Mullinger, Funding Circle was one of the first alternative finance platforms in the UK, and has since grown to become one of the world’s biggest online business lenders, facilitating more than half a billion dollars’ worth of deals across around 5,000 pitches.
The current round was led by leading European tech investor Index Ventures, with input from previous tech VC backers including Accel Partners, Union Square Ventures and Ribbit Capital.
Funding Circle said the $65m baking would be used to accelerate a programme of global growth for the business, in addition to expanding its product range and fuelling growth into new international markets.
It follows a particularly strong period of growth for Funding Circle, which has seen increased investment in both its UK and US arms and is on track to lend $600m in 2014.
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As part of the deal, US political and finance veteran Robert K. Steel will join the Funding Circle board as a non-executive director. Currently CEO of financial services firm Perella Weinberg Partners, Steel has previously served as a top official in the US treasury and as deputy mayor of New York, in addition to stints as CEO of Wachovia and vice-chairman of Goldman Sachs.
Sam Hodges, US managing director of Funding Circle, said: “Bob’s decision to join Funding Circle in our mission to revolutionize the antiquated banking sector is further validation of the growing marketplace lending industry on this side of the pond.
“The market potential in the US is huge, and with our strong leadership team and backing from our top-tier venture partners, Funding Circle is well poised to continue our solid growth trajectory and remain focused on helping American small businesses prosper.”
Robert K. Steel added: “I’m delighted to be joining the Funding Circle board. 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.
“I look forward to leveraging my experience and to working with my fellow directors to support the company as it enters its next stage of growth.”
Neil Rimer, partner and co-founder of Index Ventures, said: “We view Funding Circle as a category-defining company that pioneered a marketplace for business loans.
“Its founders exemplify the new class of fintech entrepreneurs who are combining technology and novel business models to offer much better value than banks and other incumbents have been offering their customers.”