Funding Circle Raises 65M US$ Series D

British p2p lending service Funding Circle raised 65 million US$ series D in a round led by Index Ventures with participation from existing investors, Accel Partners, Union Square Ventures and Ribbit Capital. The new funding will be used to continue to fuel the company’s rapid global growth, expand product ranges and explore new international markets.

Today’s news follows Funding Circle’s record growth in both the US and UK markets over the past twelve months. The p2p lending marketplace is on track to lend 600 million US$ in 2014.

Samir Desai, CEO and co-founder of Funding Circle said: “We are thrilled to welcome Bob to our board. His expertise and experience is unparalleled. This latest round of funding will fuel our global ambitions and power the next phase of our evolution – catering for the increase in demand we expect to see over the next 12 months. Our vision is to build a better financial world, helping more small businesses access finance and offering attractive returns to investors.”

This news comes less than a year after the previous 37 million US$ round. In total, Funding Circle has now raised $123 million in equity funding.

(Source: press release)

Funding Circle Raises 37M US$ – Will Merge With Endurance Lending Network

UK p2p lending service Funding Circle which facilitates loans to businesses has raised 37 million US$. Funding Circle, launched in 2010, has raised a total of 58 million US$ venture capital now. The series C funding round was led by new investor Accel Partners, with participation from Ribbit Capital (another new investor) and Union Square Ventures and Index Ventures.

Funding Circle also announced that it will merge with smaller US service Endurance Lending Network. Launched in 2011, the Endurance Lending Network has carved out a niche working with fast food joint franchisees but is not releasing its loan volumes, although they are understood to be considerably lower than Funding Circle’s. Funding Circle says that, combined with its back-end technology platform, Endurance’s established team of around 15 employees with experience of the US market will help it crack America.  The entire Endurance team will stay on at the firm, which will re-brand as Funding Circle as it targets what the Small Business Administration estimates is a $100 billion funding shortfall in the US economy.

In the US, the model will be modified says Samir Desai, CEO of unding Circle: lending will only be open to accredited investors. This is partly because of regulatory issues.

This is a very big step as it is the first merger of large p2p lending service and at the same time the first international merger. Funding Circle will be able to target a huge market.

Source: press release (via Techcrunch, Venturebeat)

Funding Circle Raises 10M

British p2c lending marketplace Funding Circle announced that they have raised 10 million GBP (approx 16M US$) from Index Ventures and Union Square Ventures. Funding Circle enables individual lenders to lend to establishes businesses in the UK. Since its launch a loan volume of 28.6 million GBP has been funded. According to numbers published by Funding Circle so far only 5 out of 686 loans have defaulted giving lenders an average gross yield (annualised, compounded return lenders are earning before fees or any bad debts) of 8.4%.

Samir Desai, co-founder of Funding Circle, said: “This deal represents the next step in the growth of Funding Circle and will help us to create a lasting alternative to banks for small business loans. Index has been a prominent supporter and advocate of what the business is trying to achieve, and we are delighted to continue our partnership together. We are also excited to welcome Union Square Ventures as co-investors. They bring with them a wealth of expertise and experience …”.

Prosper Raises 14.7 million US$ Series D Funding

Prosper Marketplace Inc., has successfully closed a the new funding round, which it announced two weeks ago.  Prosper receives 14.7 million US$ from new investors Tomorrow Ventures and CompuCredit Holdings and existing investors Accel Partners, Benchmark Capital, DAG Ventures, Meritech Capital Partners, Omidyar Network, QED Investors and Volition Capital. TomorrowVentures is the investment vehicle for Google CEO Eric Schmidt.

P2P Lending Service Lending Club Raises 24.5 Million US$ Series C Round

P2P Lending service successfully raised further capital. The 24.5 million US$ series C round was led by Foundation Capital and joined by existing investors including Morgenthaler Ventures, Norwest Venture Partners and Canaan Partners.

Lending Club so far raised 52.7 million US$ in total funding.

Lending Club, on which lenders have funded loans to private borrowers for a total volume of over 103 million US$ since inception, is growing fast. Currently about 10,000 loans are originated per month equaling a loan volume of about 8 to 9 million US$ per month.
The monthly volume  is a multiple of that of Prosper Marketplace, the main competitor in the US peer-to-peer lending market.

Renaud Laplanche, CEO of Lending Club says  “This latest investment gives us considerable resources to further develop our platform, launch new products, offer better service to our existing customers and expand our reach to a whole new set of customers.”.

(Sources: press release via TechCrunch, Lending Club Statistics, own data)

Smava raises 4 million Euro in second VC round

Smava, offering p2p lending in Germany, today successfully closed it’s second VC round. Earlybird and Neuhaus Partners invested 4 million Euro (approx 5.5 million US$). Earlybird did already invest 4 million Euro in Smava in the first round. Smava CEO Alexander Artopé announced that Smava will use the money for product development, marketing and internationalization.

Smava funded a loan volume of 535,000 Euro in September generating revenues (1percent origination fee) of 5,350 Euro plus an undisclosed amount (my estimate:<1,000 Euro) in commissions for insurance products.

The growth of the funded volumes per month can be seen in this chart.

Greennote – p2p student loans at a fixed low interest rate will offer p2p loans to help college students pay for their education. Unlike at the competitor Fynanz, at Greennote interest rates are equal for all loans – at launch 6.8%.

Greennote puts a lot of trust in students. All that's required is a school id. No credit checks.
From the Greennote Lender FAQ:

Q: Is there any collateral for the loan? Does the student go through a credit check?

No collateral is provided. This is an unsecured loan. And there is no credit check for the student. You are making this loan because you are helping your student and believe in his or her potential. It’s an investment in someone’s future. At the same time, this is not a handout and you will receive a return on your money.

However, as with any loan, there are risks involved. GreenNote cannot guarantee the repayment of any loan. If a student is unable to repay the loan and defaults after leaving school, GreenNote will provide collections services. We will report delinquencies to credit agencies, which will impact the student’s ability to get credit in the future.

The terms sound certainly attractive for students, especially for those with a low or no credit grade. Students can defer payments while in school:

Payments begin six months after the student finishes (or leaves) school. The student can also defer payments for the entire time he or she is enrolled in school, for up to a maximum of five years.

Student then have 10 years to pay back the loan. They can pay it back early any time without a penalty.

Whether this model appeals to lenders remains to be shown. A slogan on the site says: "Help students you know" – so Greennote is targeting relatives and friends who lend to students.

According to TechCrunch, Greennote raised 4.2 million US$ venture capital from Menlo Ventures and Glenbrook Partners last year.

Lendingclub receives 10 million VC funding

Lendingclub has received a 10.26 million US$ venture capital investment from Norwest Venture Partners and Canaan Partners. The CEO Renaud Laplanche announced that the money will be used to expand Lendingclub beyond the Facebook platform.

In an interview, Daniel Ciporin of Canaan Partners says:

P2P services and functionality in general has been at the heart of web market disruption, from Ebay to MySpace to Facebook, using only a few of the most prominent examples. I think the opportunity is ripe now to apply P2P functionality in the consumer lending space, especially with the particular focus on pre-existing affiliations that Lending Club has.