Funding Circle is Closing its Forum
May 1, 2017
One notable remaining aspect of Funding Circle’s peer-to-peer roots has been its own online forum. If you haven’t been part of that community, you’re too late, since it’s shutting down on Tuesday.
According to a forum admin, “there has been a developing trend towards a small number of investors asking questions about a narrow range of technical topics – most of which are better dealt with through our Investor Support team. Therefore we have taken the decision to close the forum at 6pm [UK time] on Tuesday 2nd May. We hope you will all continue sharing your views on Funding Circle over on the P2P Independent Forum, which we will continue to monitor.”
One forum user jokingly theorized that the move was really about silencing investors who use the forum to complain about delinquent borrowers, going so far as to create a humorously custom-captioned movie clip.
According to P2P Finance News, a Funding Circle spokesperson said, “The closure has nothing to do with the performance of Funding Circle property development loans over the last three years which continue to outperform expectations. Investors have earned an average of seven per cent since launch and more than £22m in interest on property loans alone.”
Update 5/2: The Funding Circle Forum has officially been taken down. The URL now just redirects to a general FAQ page
CIM Commits Additional $100M to Funding Circle to Help Fuel Small Businesses
March 1, 2017SAN FRANCISCO, March 1, 2017 /PRNewswire/ — Funding Circle, the world’s leading lending platform focused exclusively on small business, today confirmed Community Investment Management (“CIM”), an impact investment firm focused on marketplace lending, will finance an additional $100 million in loans to businesses originated through Funding Circle in the U.S.
The multi-year agreement, which extends the existing relationship between Funding Circle and CIM, will allow Funding Circle to provide a much-needed, further injection of capital into America’s small business sector.
“We are thrilled to extend our partnership with CIM, who shares our values and mission to help small businesses grow and thrive,” said Sam Hodges, co-founder and US managing director at Funding Circle. “Together, through this additional investment, we can help even more businesses access the transparent and responsible financing they need to stimulate job creation and economic growth in their local communities.”
Since launching in 2010, investors at Funding Circle – including 60,000 individuals, financial institutions, government, and the listed Funding Circle SME Income Fund – have helped more than 25,000 businesses globally access $3 billion in transparent and affordable financing. CIM was one of Funding Circle’s earliest institutional partners in the U.S.
“Funding Circle is a leader in innovative lending to small businesses who are underserved by traditional lenders,” said Jacob Haar, Managing Partner at CIM. “We are pleased to expand our relationship to further empower small businesses across the United States with responsible financing.”
About CIM
Community Investment Management (“CIM”) is an impact investment firm focused on marketplace lending. CIM provides responsible and transparent financing to small businesses in the United States in partnership with a select group of technology-driven lenders. CIM combines experience, innovation, and values to align the interests of small business borrowers and investors. More information is available at http://www.cim-llc.com.
About Funding Circle
Funding Circle (www.fundingcircle.com) is the world’s leading lending platform for business loans, matching small businesses who want to borrow with investors who want to lend in the UK, US and Europe. Since launching in 2010, investors at Funding Circle – including 60,000 individuals, financial institutions, the listed Funding Circle SME Income Fund and Government – have lent more than $3 billion to 25,000 businesses globally. Funding Circle has raised $373m in equity capital from the same investors that backed Facebook, Twitter and Airbnb.
Why Funding Circle Exited Spain
January 24, 2017
Funding Circle operates in the US, UK, Germany, and the Netherlands. Up until recently, they also counted Spain among its active European markets, but no longer. The timing is curious, right after the company raised $100 million through a round led by Accel, but upon a closer look, Spain was never really their thing to begin with.
“We inherited Spain following our acquisition of Zencap in 2015,” Funding Circle Samir Desai said. “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. 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.”
Zencap was once said to be the fastest growing online lending marketplace in Continental Europe. In August 2015, Victory Park Capital had agreed to invest up to €230 million in loans originated by Zencap over a three year period. Funding Circle acquired them a mere two months after that, inheriting their operations in Germany, Spain and the Netherlands.
“Funding Circle will continue working on behalf of all investors to service the existing loan book,” the company said. “In total €16 million of loans have been completed in Spain, which is approximately 0.1% of cumulative global originations. Alternative roles in the company have been offered to the team and the company will retain part of the team to service the existing loans.”
Ryan Weeks of AltFi, wrote of the decision to exit Spain, that it was a combination of limited awareness around P2P lending there and low quality loan applicants.
With more resources at their disposal now to focus on Germany and the Netherlands, the company also announced two new senior appointments. Thorsten Seeger has joined as Managing Director for Germany and Belkacem Krimi has joined as Chief Risk Officer for Continental Europe. Thorsten Seeger joins from Lloyds Banking Group, where he was Head of Financial Markets for SMEs and was responsible for driving and delivering access to financial markets for small businesses. Belkacem joins from GE Capital and brings extensive experience in credit risk and operational risk management, developed over 17 years across multiple countries in Europe and Asia. In his last role, he was the CRO for GE Capital France, based out of Paris – managing risk for over $10Bn consumer and commercial assets.
Desai, of Funding Circle, said, “We’re delighted to welcome Thorsten and Belkacem to the team. Both are hugely talented and have extensive experience and understanding of small business lending across Europe.”
But for now, it’s Adios to Spain.
Funding Circle’s New $100 Million Funding Round is a Surprise, But it’s Really Not
January 13, 2017The alternative small business lender that is arguably offering the longest terms with the lowest rates has secured a $100 Million Series F Round, according to an announcement on Wednesday.
With the round led by Accel, the strong sign of confidence contradicts the sentiment felt by many in the US about their business model. In the last few months, several of Funding Circle’s US competitors have suspended operations, shut their doors, or integrated into other companies. Most of the questions we’ve received lately have centered around “who’s next to fall?” not “who’s next to raise $100 million?”
So what’s going on here?
Imagine in an alternate universe that the US government was using Funding Circle’s platform to fund millions of dollars to small businesses, that the US Treasury Secretary was publicly cheering them on, and that they sat on Capitol Hill drawing up new laws that would regulate their industry in a way that would help them succeed, would you bet on them to win?
That alternate universe exists and it’s called the United Kingdom. It’s also Funding Circle’s primary market. Just last week the UK government lent Funding Circle another £40 million on top of the previous £60 million to lend to small businesses amid credit concerns related to Brexit and it’s only one example of how cozy government relations are over there.
Chancellor of the Exchequer (the US Treasury Secretary equivalent), Philip Hammond, said: “Funding Circle has become a real success story for British Fintech and news that it has attracted £80 million (US $100 mil) of investment is further evidence of the growing importance of this industry. This is another vote of confidence in a UK firm that plays an important role in our economy – helping businesses to grow and create jobs.”
And in a TV interview with Bloomberg, Funding Circle co-founder James Meekings said that the company is working with the government to help draft the regulations that they would have to abide by. Sounds like a nice arrangement.
The UK is still their biggest market but part of their $100 million funding round will be used to further develop their US business, Meekings said on Bloomberg. To date, the company has raised $375 million. Less than two years ago, their private market valuation was $1 billion, more than twice OnDeck’s current market cap. Funding Circle’s valuation in this round was not disclosed.
Funding Circle’s global loan volume these days rivals OnDeck’s. £400 million was lent by Funding Circle in Q4 versus $613 million lent by OnDeck in Q3, setting up the possibility that the former could surpass the latter in volume this year.
Funding Circle’s publicly traded SME Income Fund has also held up pretty well over the last year:
Shortly after announcing their funding round, a trade group they co-founded in the US, the Marketplace Lending Association, welcomed 11 new members. Might Funding Circle eventually gain the same favor in the US that they’ve nurtured in the UK? Would you bet on them?
Funding Circle announces $100 million equity investment to help thousands more small businesses globally
January 11, 2017
- Round led by Accel, with participation from other existing equity investors
- Investment comes as UK business reached profitability for Q4 2016
- Lending through Funding Circle passes $3 billion globally, benefitting over 25,000 businesses in the UK, US and Europe – creating more than 50,000 new jobs
Funding Circle, the world’s leading lending platform focused exclusively on small business finance, today announced it has raised a further $100 million in equity capital. Led by Accel, the round saw participation from existing Funding Circle investors, including Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek and Union Square Ventures.
The new investment follows significant growth at Funding Circle over the last 12 months. Globally, investors on the Funding Circle platform have lent more than $1.4 billion to small businesses in 2016, with approximately $485 million lent in Q4 alone, a record amount for any SME direct lending platform. Additionally, in Q4 Funding Circle UK recorded 90 percent year-on-year growth and reached profitability.
Samir Desai, CEO and co-founder of Funding Circle, said: “Funding Circle is changing the financial landscape for small businesses and investors globally, ensuring a better deal for everyone and helping to create a more sustainable and fairer economy. Today’s news is the next step on our journey to create a category-defining company that helps thousands of small businesses access finance and create jobs. Over the next 12 months, lending through the Funding Circle platform will create a further 50,000 new jobs, supporting economic growth in the UK, US and continental Europe.”
Funding Circle facilitates lending to small businesses from investors including 60,000 individuals, local and national government, the European Investment Bank and financial institutions such as pension funds. The investment comes as lending to small businesses through the platform passes $3 billion globally, benefitting over 25,000 businesses and creating 50,000 new jobs.
Harry Nelis, Partner at Accel, said: “We’ve been impressed by the Funding Circle team since our early investment in the company. It has achieved significant growth across multiple international markets by delivering an appealing lending option to SMEs and attractive risk-adjusted returns to investors on the platform. This investment makes Funding Circle the largest and best capitalized SME lending platform in the world, and we’re thrilled to continue to support its journey.”
Launched in 2010, the Funding Circle model has opened up small business lending to a wide range of investors, improving competition in the market, creating jobs and reducing dependency on bank lending. This latest investment is recognition of the efficiency of the direct lending model, and its ability to channel much-needed funds to the real economy, while providing investors with attractive, stable returns. In total, Funding Circle has now raised $373 million in equity funding from some of the world’s largest and most respected investors.
By bringing together industry leading risk management and cutting edge technology, creditworthy businesses typically access the capital they need in days rather than months.
About Funding Circle
Funding Circle (www.fundingcircle.com) is the world’s leading lending platform for business loans, matching small businesses who want to borrow with investors who want to lend in the UK, US and Europe. Since launching in 2010, investors at Funding Circle – including 60,000 individuals, financial institutions, the listed Funding Circle SME Income Fund and Government – have lent more than $3 billion to 25,000 businesses globally. Approximately 10 percent of investor money now comes from Government sources, including the British Business Bank, European Investment Bank, KfW, the German government-owned development bank, and local councils across the UK. Funding Circle was the first lending platform to announce a formal referral partnership with Santander, one of the UK’s leading high street banks, and has since announced a similar partnership with RBS. It has raised $373m in equity capital from the same investors that backed Facebook, Twitter and Airbnb.
About Accel
Accel is a leading early- and growth-stage venture capital firm, powering a global community of entrepreneurs. Accel backs entrepreneurs who have what it takes to build a world-class, category-defining business. Founded in 1983, Accel brings more than three decades of experience building and supporting hundreds of companies. Accel’s vision for entrepreneurship and business enables it to identify and invest in the companies that will be responsible for the growth of next-generation industries. Accel has backed a number of iconic global platforms, which are powering new experiences for mobile consumers and the modern enterprise, including Atlassian, Avito, BlaBlaCar, Deliveroo, Dropbox, Etsy, Facebook, Flipkart, Funding Circle, Kayak, QlikTech, Simplivity, Slack, Spotify, Supercell, WorldRemit and others.
From Small to Big: Why Funding Circle is Building its Intermediary Channel
April 21, 2016
If online lenders want to disrupt banking, they need bankers.
Small business marketplace lender Funding Circle hired an intermediary finance veteran Neil Mullane to expand the company’s reach among small merchants. Mullane comes with eight years of experience in commercial finance at Barclays, where he oversaw business and corporate banking working with small businesses with a £250,000 to £25 million turnover.
The London-based P2P lender has channeled more than $2 billion of loans from individual and institutional investors to businesses in the U.S., U.K. and Europe since 2010 and has said that it remains dedicated to two principles, “marketplace and small business.”
And its gaze is set on Europe. Last year, it acquired German marketplace lender Zencap for an immediate footprint in Germany, Spain and Netherlands. Additionally, its SME Income Fund that was listed on the London Stock Exchange in November 2015, raised £150 million from shareholders and started lending to small businesses in those markets last month.
Last week (April 14), the company also launched UK’s first P2P securitized ABS backed by loans worth £130 million.
Speaking at LendIt USA recently, the company’s US co-founder and managing director Sam Hodges envisioned the golden age for marketplace lending where it takes “seconds to issue credit,” from a broad network of global investors. “A loan should get funded by a network of investors all over the world — be it a pensioner in London, a hedge fund manager in Sydney or a family office in New York simultaneously putting money to work through a global platform,” he said.
He elaborated further to note that the industry will have to work on four key tenets to get there: Stable lending capital, taking controlled risks, maintaining operational discipline to make sure that unit economics favor scaling and lastly, maintaining integrity around infrastructure and transparency.
The company has noted its intention to move in this direction at least with hiring the right talent, whether through the former Executive Board Member of the European Central Bank (ECB), Jörg Asmussen Mullane to lead business development or beefing up its risk compliance and product engineering teams in San Francisco.
Funding Circle Still Focused on “Marketplace” and Small Business
April 13, 2016
At Lendit, AltFinanceDaily asked Funding Circle co-founder and US market head Sam Hodges if the company’s domestic loan volume would eventually outpace originations in the UK. Hodges expressed optimism that it would and explained that the company’s UK origins had simply given that operation a 12-24 month head start.
The company has originated more than $2 billion in loans since inception. A page on their UK site specifies that 1,212,223,380 pounds have gone to british businesses, the equivalent of about $1.7 billion.
Asked if the company would branch out into other types of lending such as consumer, Hodges responded that the company remains dedicated to two principles, “marketplace and small business.” On that note however, he said their UK branch already engages in commercial property loans and didn’t rule out that such a product could eventually be made available in the US.
Funding Circle To Expand Bay Area Staff
March 17, 2016P2P Lender Funding Circle will expand its Bay Area staff by ten percent.
The company plans to hire 20 people in risk and compliance, product engineering and sales teams. Funding Circle’s marketplace connects borrowers, mostly small business merchants and investors. The company makes money in origination and servicing fees.
The San Francisco-based company was founded in 2010 in the United Kingdom and was launched in the US in 2013. It employs 550 people globally and has so far funded $2 billion to 15,000 businesses.
Earlier this month, Funding Circle announced that it hired former Executive Board Member of the European Central Bank (ECB), Jörg Asmussen, to join its board. This aligns with the company’s streak of boosting manpower. Last year, it hired top executives from Barclays and American Express to head its global risk and analytics team.
