Peer-to-peer lending platform RateSetter has entered into a unique referrals partnership with angel-led equity crowdfunder SyndicateRoom.
The two alternative finance platforms will now refer businesses to one another depending on the specific funding requirements of those businesses. The broad intention of the scheme is to ensure that growing companies have easy access to “appropriate” financing options. Between them, RateSetter and SyndicateRoom will be able to service a far broader section of the business lifecycle than either platform could individually. The dream scenario, we suspect, is that businesses that begin by taking on equity money at SyndicateRoom will in time develop to the point that a debt-based solution makes sense, which is when RateSetter comes in. The collaboration is – as far as we’re aware – the first to have been forged between a marketplace lender and an equity crowdfunder in the UK.
The tie-up is another reflection of the increasing importance of business lending at RateSetter. The platform – which initially lent solely to consumers – published an update in November last year, which revealed that 40% of its outstanding loan book was then comprised of loans to businesses (30% in commercial loans and 10% in property loans).
“The success of small and medium sized businesses is vital to the UK economy. Businesses need funds to raise productivity, grow and create jobs, yet traditional finance providers have retreated from this sector leaving customers high and dry. By collaborating to bring together our complementary propositions, RateSetter and SyndicateRoom can better help businesses obtain the right type of finance for their specific needs and circumstances in a timely manner.”
For SyndicateRoom, this is the latest in a string of recent announcements. Most notably, the company is fresh off of announcing the effective acquisition of intermediary status with the London Stock Exchange – thus opening up access to IPOs via the platform. Clearly the current focus at SyndicateRoom is to innovate in search of deal flow and to enhance the flexibility of the product set on offer. This dual focus may well serve to kick volumes up in the coming months. SyndicateRoom has facilitated a little shy of £50m in equity funding to date, according to the Liberum AltFi Volume Index UK.
“SMEs have so much to offer Britain. They provide the kind of innovation that can transform our society for the better, which means that their growth is vital to the UK. We’re proud to have come together with RateSetter, to find a way of supporting that growth.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.