FundThrough, a marketplace lender for small businesses, has launched in Canada.
The platform has raised $2.2 million in financing from a group of investors led by Real Ventures, Canada’s largest and most active seed venture fund. These funds will be used to scale the platform, allowing it to fund more growing businesses. Other investors in the round include Origin Merchant Partners, Five Elements Ventures, Barlow Lane Holdings, Jim Case and Peter Carrescia.
"For a long time Canadian business owners have relied on big banks for financing, and often have not had attractive alternatives if they were turned down or could not wait. FundThrough uses technology to provide an alternative to traditional lending sources, giving small- and medium-sized business owners access to a more convenient way of borrowing, enabling them to unlock the growth potential of their business."
Janet Bannister, General Partner at Real Ventures, added:
"We are thrilled to be investing in FundThrough. Online marketplace lenders like FundThrough are using technology to change the way businesses borrow money. They are disrupting the financial services industry by putting more power in the hands of business owners. We look forward to working closely with the FundThrough team as they grow their company in Canada and internationally."
The three founders, Steven Uster, Graham McBride and Deepak Ramachandran, saw a gap in the market for FundThrough. They think that there are not enough options for businesses to get fast and affordable financing quickly, and so they aimed to create a composite solution.
The Canadian peer-to-peer market is developing at quite a slow pace, especially when compared to the US. It is easy to think of the Canadian market as a mere extension of its US equivalent, however it is very different and consumers and businesses in the region act in very different ways. The number of alternative finance platforms in Canada is still in the single digits and the market can be compared to the UK in 2006 when Zopa had launched but there wasn’t much activity in the sector. However, this means there is a huge opportunity in Canada that not many people are as yet attempting to exploit, and FundThrough is well placed to take advantage of this.