Auxmoney Raises Series D from Seven Ventures

Auxmoney Logo 2016Auxmoney, one of the oldest German p2p lending marketplaces, has completed a Series D round with Seven Ventures as lead investor. The specifics were not disclosed, only that Seven Ventures along with Index Ventures, Union Square Ventures und Foundation Capital invested a double digit million Euro amount. Seven Ventures is the investment arm of ProSiebenSat.1 Media SE, which operates large TV channels in Germany.

Raffael Johnen, co-founder and CEO of Auxmoney stated: „The partnership with ProSiebenSat1 is an important milestone on our path to change the public awareness for p2p lending in Germany. We will make a big step towards our goal to enable access to loans for more people. The raised capital and the better access to TV advertising will help us to make p2p lending part of everyday life of millions of people.” (original quote in German; own translation)

Auxmoney trippled loan volume in 2015 compared to 2014.  As of January 31st, 2016, according to numbers on file with P2P-Banking.com, the company had originated 441 million EUR in loans since launch, with a monthly loan origination volume of 10.6M for the last month on file (January 2016).

Auxmoney management
Auxmoney management

German P2P Lending Service Auxmoney Raises 16M US$ Series B

German p2p lending service Auxmoney completed a 16M US$ series B round, financed by Foundation Capital, joined by Partech Ventures and Scott Bommer, alongside existing backers Index Ventures and Union Square Venture. Index Ventures and Union Squre Ventures already invested in the Series A in the end of 2012.

Auxmoney was founded in 2007, and has originated 94.4 million EUR in p2p loans since.

The proceeds will be used for auxmoney’s ambitious expansion plans, by further enhancing the Düsseldorf-based lending and investment platform and expanding the company’s 60-strong team.

auxmoney CEO and co-founder Raffael Johnen said the investment marked a tipping-point for peer-to-peer lending in Germany, with the market set to go mainstream. “We are about to witness a major shift in consumer behaviour towards peer-to-peer loans. As clear market leader in Germany, auxmoney is right at the forefront of this development,” he said. “With our new partners on board, we are ready to turn crowdlending into an integral and mainstream element of Germany’s consumer finance landscape.”

Auxmoney Now Sets Interest Rates Based on Own Score Classes

Auxmoney introduced a major change to the way interest rates are set. Instead of letting borrowers select the interest rate they are willing to pay, p2p lending service Auxmoney sets interest rates based on self-computed credit scores starting today. Auxmoney says it uses over 300 factors to grade borrowers either AAA, AA, A, B, C, D, E or X. The model now resembles the models Lending Club and Prosper use to set interest rates. In an earlier article I had compared different models p2p lending services use to set interest rates.

Near-term I expect borrower demand to rise due to this change since for most borrowers interest rates will be lower. However lower interest rates will lessen attractiveness for lenders and probably reduce funding percentage (in the weeks before this change approx. 30 to 40% of loan request got funded).

(via P2P-Kredite.com)

Auxmoney Changes Display Rules for Credit Scores

P2P lending service Auxmoney changed its TOS today. Auxmoney will make display of pulled credit scores mandatory (there are 3 score types obtained from different bureaus). In the past the display of credit scores was optional and borrowers could decide, if they want them in their listing. In fact borrowers could decide to remove credit scores from their loan listing should they consider a low score to hurt funding chances.

In practise only loan applications with displayed scores had realistic funding chances in the past – over 90% of the funded loans had at least one credit score information (see chart). But this is still a positive step, offering more transparency for lenders and allowing easier comparision of the over 2,000 open loan listings.

Auxmoney Raised 12M from Union Square Ventures and Index Ventures

As reported earlier German p2p lending service Auxmoney completed a series A round in the end of 2012. Today the company disclosed that Union Square Ventures and Index Ventures participated in that round and invested 12 million US$. Together they hold 21,8% of the Auxmoney ownership.

Both VC have made previous investments in p2p lending companies. Union Square Ventures invested in Lending Club and Funding Circle. Index Ventures invested in Funding Circle.

CEO Raffael Johnen told P2P-Banking.com: “We are happy to have won Union Square Ventures and Index Ventures as investors. Both have comprehensive experience with online marketplaces nad their expertise will help us to accomplish our plans to grow”. Johnen plans to use the raised amount to continue development of the technology. Furthermore he want to increase the staff (currently about 30). Main goal of Aumxoney is the growth of the loan volume.