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Bondora Looks to Scale Up Cross Border Investment




By Ryan Weeks on 2nd March 2015


The first platform to facilitate cross-border peer-to-peer investment has just closed a Series A fundraise.

 

Estonian lender Bondoraformerly known as isePankur – has raised $5m in a round led by Valinor Management. The platform currently writes loans to consumer borrowers in Estonia, Spain, Finland and Slovakia. Its investors hail from all over Europe. Bondora boasts a cumulative lending figure just shy of €35m, according to the Liberum AltFi Volume Index Europe.

 

The $5m will reportedly be used to implement the necessary infrastructure for an expansion of the platform’s cross-border lending model. CEO and Co-Founder Pärtel Tomberg indicated that the central goal is to construct a global marketplace – spanning the breadth of Europe and beyond. The Bondora boss stated:

 

“There are no precedents in the world on many of the things we want to do.”

 

That may be correct, but Bondora is not the only player eyeing up the globalization opportunity. Claus Lehmann of P2P-Banking.com pointed to Lending Club as a potential mid-term competitor. However, Renaud Laplanche recently suggested that the money raised by via the P2P titan's IPO would not be spent on international expansion plans for the meanwhile, but there can be little doubt that the platform will be closely monitoring the international scene.

 

The more obvious and immediate competitor – and indeed the more comparable competitor in terms of scale – is Rocket Internet-backed Lendico. The German consumer lending specialist already has a presence in 6 countries spread across both Europe and Africa. Indeed, Lendico Managing Director Dominik Steinkühler recently explained to AltFi that he sees facilitating cross border investment as central to the evolution of the peer-to-peer lending sector.

 

Bondora is also looking to far-off institutions (particularly those in the US) as a means of funneling overseas capital through the online marketplace. As Mr. Tomberg told Tracy Alloway of the FT:

 

“Global investors are looking for yield, they’re looking for exposure to an asset class that banks have been able to monopolise for all these years and Europe is, for the first time ever, a single market with millions of consumers, all within the same payment structure and currency.”

 

The platform will no doubt be encouraged by the recent activity of Victory Park Capital – which has made sizable investment commitments to Funding Circle and Assetz Capital over the past few months. Victory Park will invest $420m via Funding Circle’s UK and US arms over the next 3 years, and £150m through the Assetz platform over the next 5 years.

 

The Assetz deal will be of particular interest to Bondora. Whilst one platform makes loans to consumers and the other to businesses, these platforms stand at a not vastly dissimilar stage in their development, even if Assetz is perhaps a touch ahead. By way of illustration:

 

  • Bondora launched in March 2012 under the title of isePankur. Assetz was born a year later in March 2013.
  • Bondora has lent around €35m. Assetz cumulative lending figure stands at just above £60m. These volumes make sense when you consider the advanced state of the UK market.
  • Bondora has now closed a Series A $5m round. Assetz very recently announced a Series A £6m round – part of which has been funded via equity crowdfunding platform Seedrs.
  • Both have an appetite for international activity. We’ve heard all about Bondora’s global ambitions. Assetz not only secured the above-mentioned investment commitment from Victory Park, the platform also struck a deal with US invoice finance specialists The Interface Financial Group, in order to bring a new online invoice finance product to UK shores.

 

Owing no doubt to a forecasted uptick in transactional flows, the Assetz team were able to secure an investment commitment that almost tripled the value of the platform’s cumulative lending to date. We therefore see no reason why Bondora couldn’t raise a hefty sum of overseas money – presuming of course that the platform is able to satisfy institutional due diligence criteria. 

 

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