The technology driven, institutional investor-facing Orchard Platform has now raised a grand total of $44.7m to date. The company last raised equity money in October 2014, when Spark Capital and Canaan Partners led a $12m Series A round. This latest $30m fundraise was led by Thrive Capital – a private equity and VC firm that specialises in technology and media investments. Jon Winkelried, former President and Co-Chief Operating Officer of Goldman Sachs, also participated. Spark and Canaan joined in on the Series B too, as did existing investors Nyca Partners, QED Investors, Conversion Capital, John Mack and Tom Glocer. Quite the pantheon of investors.
It’s not clear at this stage where this leaves Orchard’s valuation. There aren’t too many comparisons to draw upon either, as there really isn’t a huge amount of competition in the institutional investment management portal space. And if there are competitors to the Orchard platform out there, they’re certainly nowhere near as well developed (or well funded).
The significant injection of Series B funding will be used to accelerate the growth of Orchard’s technology platform. Matt Burton, CEO of Orchard Platform, commented:
“Our core business vision – of facilitating a faster and more fluid flow of capital through technology and access to data – has gained enormous traction. The market has responded and investors are committed to helping Orchard flourish. We're excited to help continue shaping the future of credit."
Orchard already claims to have helped to facilitate billions of dollars of investment into marketplace lending platforms in the US. But the UK market, which surely looms large on Orchard’s radar, might be more difficult to crack. The fundamental point of difference between the two markets (from Orchard’s perspective at least) is that the UK P2P platforms generally do not allow institutional investors to “cherry pick” loans in the way that the US platforms do. As such, it’s difficult for Orchard’s systems – no matter how advanced they may be – to optimise institutional portfolios in the UK. Loans on, say, Funding Circle, are randomly allocated to an institutional investor pool, just as they are to the retail pool.
Still, with over $20 billion in cumulative lending already facilitated by the major US marketplace lenders, and the major platforms working so closely with institutional investors, the growth potential for Orchard is vast. Forbes recently named Orchard on its “Next Billion Dollar Startups” list. This $30m Series B round is certainly a major step towards fulfilling that prophecy.