Small business lender iwoca closes $20m Series B funding

Startups-100 listed company will use investment to support European expansion and fuel development of its platform

Startups 100-listed iwoca, the alternative small business loans provider, has secured a $20m Series B funding round led by Acton Capital Partners and CommerzVentures.

Venture capital firm Redline Capital and existing investors also participated in the round.

Founded in 2011 by 2013 Young Guns Christoph Rieche and James Dear, iwoca offers flexible credit loans to small and medium-sized firms struggling to access traditional finance.

It approves loans based on real time performance data obtained by integrating with high-street banks and platforms such as Sage Pay and PayPal.

The lender, which now operates in UK, Germany, Spain and Poland, said it achieved over 250% year-on-year growth in loan issuance in the last 12 months and has seen an estimated 7,500 transactions through its platform since 2012.

The investment will fuel expansion in  Europe and support development of its platform, with the goal to issue an additional $150m of loans to new and existing customers.

This latest investment follows an early £5m raise from European investors to fund its first stage of expansion in January 2014 and builds on news that the UK’s alternative finance market is expected to increase from $2.5bn in 2014 to $7bn in 2015, with equity crowdfunding platform Seedrs having also raised major funding this week.

Rieche commented: “We’re aiming to offer a flexible finance option to all of Europe’s 20 million small businesses.

“Raising investment from Acton, CommerzVentures and our existing investors is a vote of confidence in iwoca and a sign of the growing interest not only of financial investors but also of leading banks in alternative financial technology lenders.

“This will be crucial to increasing access to credit and supporting growth amongst European small and medium-sized enterprises.”

Patrick Meisberger, managing director at CommerzVentures, said:

“iwoca’s cutting edge technology provides a scalable way to understand and lend to small businesses, and is therefore a very attractive business model. With its impressive track record, we are convinced the company is set to show extraordinary growth.”

Comments

(will not be published)