Funding Circle, the largest marketplace lender for small businesses globally, is reshaping its European lending activities. The firm acquired German marketplace lender Zencap in October 2015, thereby breaking into mainland Europe after having already branched out into the States a few years earlier.
Former Zencap CEO Matthias Knecht left what became Funding Circle Continental Europe in June of last year, after what the German press described as a “dispute” with the UK mothership.
Replacing Knecht as managing director for Germany is Thorsten Seeger (pictured above), formerly head of financial markets for SMEs at Lloyds Banking Group, where he was responsible for driving and delivering access to financial markets for small businesses. In addition to Seeger, Belkacem Krimi has joined the company as chief risk officer for continental Europe. Krimi joins from GE Capital, having spent 17 years across multiple countries in Europe and Asia. He was CRO for GE Capital France, where he managed risk for over $10bn consumer and commercial assets. He will report to Funding Circle’s global chief risk officer Jerome Le Luel, who was hired from Barclays in July of 2015.
Seeger said that the financial industry in Germany is going through a “profound” period of change, with companies like Funding Circle “revolutionising the customer experience for small businesses and investors”.
Funding Circle also confirms that it has officially put a stop to new lending in Spain, after pausing in June of last year. In Zencap,Funding Circle inherited a business that was active across Germany, the Netherlands and Spain. AltFi understands that a combination of limited awareness around P2P and a low quality of loan applicant persuaded the firm to curtail its activities in Spain. Its European resources will now be shifted over to the Netherlands and Germany, which are said to be showing significant growth and promise.
A total of €16m had been lent in Spain, approximately 0.1 per cent of the firm’s originations globally. These loans will continue to be serviced on behalf of investors, and the team in Spain have been offered alternative roles within the business.
Funding Circle is not the first platform to have deemed Spain more trouble than it’s worth. Lendico, which like Zencap/Funding Circle is backed by Rocket Internet, withdrew private investment opportunities in Spain from its platform in March of 2015.
“We decided to pause new lending in June last year and we have now taken the formal decision to stop all new loans for the foreseeable future,” said Funding Circle CEO Samir Desai. “We continue to invest in Europe in Germany and the Netherlands where we are growing fast, and expect to enter more countries in the future."
Funding Circle announced the completion of a landmark $100m equity round last week. The firm said that the funds would be used to continue to consolidate its position in the UK, US and continental Europe, whilst also investing heavily in technology and talent.