Funding Circle, online marketplace for business loans, has today announced that the business will be joining forces with San Francisco-based lender Endurance Network.
The agreement brings together an established home-grown team with a strong track record in the US, and combines local knowledge with proven experience and game-changing technology.
Accel Partners is fuelling this growth by leading a $37 million series C investment. New investor Ribbit Capital joins early backers New York-based Union Square Ventures and Index Ventures. In total Funding Circle has now raised $58 million in equity funding.
The investment will be used to support the growth of the business in the UK with specific plans to launch new asset finance and commercial property products that will provide significantly more lending opportunities for UK investors. The money will also assist Funding Circle’s US operations, headquartered in San Francisco.
Since launching in the UK in 2010, Funding Circle has generated more than $250 million of loans, creating an estimated 10,000 new jobs in the UK alone. The model has proven so successful that earlier this year the British Government injected $32 million (£20 million) to fund 20% of every business loan made via the marketplace.
“Financial services is going through the most significant disruption for a generation” said Samir Desai, Co-Founder and Chief Executive of Funding Circle. “The way businesses borrow is being transformed by eliminating the obstacles of an outdated banking system and putting owners directly in touch with investors looking to earn attractive returns.”
“Today is a landmark step to achieving our vision of helping many millions of companies around the world access finance in a faster and easier way than through their bank.”
According to the Small Business Administration there is a $100 billion funding shortfall in the US economy with small businesses, the lifeblood of the country, lacking access to the finance they need to create jobs and accelerate economic growth.
Co-founders of Endurance Lending Network, Sam Hodges and Alex Tonelli, will lead Funding Circle’s US operations and Tonelli said, “Like Funding Circle, Endurance Lending Network was created to help the millions of small businesses being starved of the money they need to grow.
“As small business owners ourselves, we know how acute the need is for a viable alternative to bank loans. Joining forces with Funding Circle will allow us to further deliver on this vision.”
Sam Hodges commented: “We are delighted to have found a like-minded partner that is committed to helping more great American businesses thrive. Companies need access to money when it’s needed, not months of waiting and stagnation. Together we will continue to build the world’s leading marketplace for business loans.”
This is a groundbreaking deal to help millions of businesses across America sidestep the broken banking system and borrow directly from investors.
The lending revolution
Harry Nelis, Partner at Accel Partners will be joining the board of Funding Circle. Nelis says, “In Funding Circle, we see the potential to build the category-defining company in online business lending. We very much look forward to working with Funding Circle to make the company a great success as they continue their expansion.”
Through Funding Circle, businesses typically access the capital they need in 7 days compared to 15-20 weeks with a bank. Independent research has found that three in four businesses would come to Funding Circle first in future, ahead of a bank.