The world’s foremost online marketplace for small business loans has raised $150m in equity funding – the largest round ever staged by a UK platform.
The news comes as Funding Circle crosses the $1b mark in loans extended to SMEs globally. The purpose of this latest fundraise is to consolidate the platform’s position in both the UK and US, whilst in tandem fuelling further growth. The round was led by DST Global, also featuring Baillie Gifford, a fund managed by BlackRock, Sands Capital Ventures and Temasek. Goldman Sachs acted as the exclusive placement agent for what was an oversubscribed round.
This record breaking fundraise brings the total amount of equity capital accumulated by Funding Circle to $273m. The platform closed a Series D round worth $65m in July 2014 – financed by an equally prestigious crop of VCs, including Index Ventures, Accel Partners, Union Square Ventures and Ribbit Capital.
“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.”
The Sunday Times got wind of this deal in late March – suggesting that Funding Circle was on the brink of “Unicorn” status thanks to an impending raise of over $50m. A Unicorn, in Silicon Valley-speak, is a private technology startup that carries a valuation north of $1bn. Although Funding Circle’s exact valuation has never entered the public domain, we suspect the Sunday Times called it correctly.
The equity issue comes accompanied with a pair of high profile appointments. David Yu (former CEO and CTO of Betfair) jumps aboard as Global CPO whilst Chitra Nayak (previously COO of Salesforce’s Platform business) joins as COO of the US operation. Both have substantial track records in bolstering the growth of global businesses, and will doubtless play important roles in supervising the continued development of Funding Circle’s international operation.
Funding Circle is now the fifth largest net lender to small businesses in the UK (based on Q4 2014 figures), where the platform sources capital from the British government, a number of institutional investors and 38,000 individual investors. The company’s US arm is also humming along, having lent seven times more in the first quarter of 2015 than was lent in Q1 the previous year.
Yuri Milner, Founder of the lead investor in the $150m round – DST Global, said simply:
“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.”
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.