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LendInvest Secures £22m in Funding from Chinese Investor




By Ryan Weeks on 16th June 2015


LendInvest’s first round of external equity funding has come from the East.

 

The listed Chinese technology company Beijing Kunlun has invested £22m in the platform. LendInvest is the UK’s largest P2P real estate mortgage provider. The high growth platform has been extremely patient in identifying the right VC to partner with. Beijing Kunlun was originally backed by Sequoia Capital. Chief Executive Yahui Zhou will be joining LendInvest’s board.

 

As the FT’s Emma Dunkley points out, the investment represents the latest in a string of interactions between Asian companies and the Western alternative finance scene. Alibaba has tied up with LendingClub in the States and with Ezbob and Iwoca in Europe in order to provide funding to allow US/EU businesses to purchase from Chinese suppliers. Furthermore, a Chinese social networking firm by the name of Renren participated in LendingHome’s $70m fundraise in April.

 

This steady flow of cross-border activity likely stems from the sophistication of the Western P2P markets. The regulatory clarity and high level of operational transparency that exists in, say, the UK market, stands in stark contrast to the still shady Chinese sector. A newly minted regulatory framework for P2P lending will reportedly arrive in China within the month, but to date the tumultuous growth of the industry has been somewhat marred by a heap of platform closures and many more incidences of fraud.

 

LendInvest hinted in January that its IPO would take place before the close of 2016. The fresh £22m of funding may shift the floatation deadline backwards a little. Beijing Kunlun’s capital injection will reportedly be used to accelerate growth ahead of the IPO, which will now likely take place within the next year – rather than before the end of this year.

 

LendInvest has already been expanding at a breathless pace. At the close of 2014, AltFi Data predicted that the real estate specialists would originate £195m in loan volume in 2015. After a rapid start, that estimate was recently revised to nearly £400m, which, if achieved, would take the platform’s cumulative lending volume to just shy of £600m.

 

Christian Faes, Co-Founder and CEO of the platform, commented:

 

“You have seen peer-to-peer take off in lending to consumers and businesses, and now property and mortgages is the next big thing.”

 

Comments

Daniel

24 Jun 2015 09:46am

The problem with LendInvest is that there is no liquidity. The existing model will not gain any traction with the mainstream. A handful of professional investors maybe. £22m wont change that, but a rethink of your business model might. Good luck, you are in the right direction but not on the money, as yet.

LendInvest

17 Jun 2015 09:34am

Hi Robert, this investment is an equity investment into the LendInvest business strengthening the companies balance sheet and making it one of the best funded marketplace platforms in the UK. LendInvest has been running an anniversary promotion during June listing a number of loan transactions at 9%. This is as a thank you to its investors, who have supported the platform for the past two years. LendInvest peers match their investments directly with loans of the underlying borrowers, meaning redemption occur as borrowers repay and not before. I hope that answers your questions. Many thanks, The LendInvest Team.

Robert

16 Jun 2015 07:26pm

Is Lendinvest going through a slight cash flow crunch at present? I note it has a big investor redemption coming up in August, and the interest rates it pays to investors on deals has increased dramatically to 9% recently, both making me wonder if it has had a need to attract fresh investor cash more quickly than previously? I hope I am wrong, but could it make an investor a little 'twitchy'?


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