Funding Circle closes £10m Series B round

Funding Circle, an online lending marketplace for small businesses, has closed a £10m Series B funding round led by Index Ventures and US-based Union Square.

A number of angel investors, including Better Capital founder Jon Moulton and Betfair co-founder Edward Wray, also made significant investments in the funding round, which takes the total amount invested in Funding Circle thus far to £13.2m.

Since launching in August 2010, Funding Circle has helped more than 670 small firms secure finance via its peer-to-peer exchange, which enables investors to lend to early-stage companies without the need for banks or intermediaries.

The site has grown at a yearly rate of more than 400% over the last two years, and the total value of loans it facilitates now exceeds £1m per week.

Plans are in place to double the company’s staff base over the next 12 months, and co-founder Samir Desai hopes the Series B money will fuel continued innovation.

Desai said: “At present 90% of the small business lending market is made up by five major high street banks. This lack of competition has continually stifled the attempts of small businesses to gain access to much-needed finance. At the same time investors continue to receive pitiful returns on their savings.

“At Funding Circle, we are delivering an innovative service that removes the outdated and laborious processes of the banks. We deliver a better deal for businesses and a better deal for investors.”