Funding Circle: A $100m vote of confidence in the UK’s Peer-to-Peer Lending industry
The news that Funding Circle has raised another $100m from a group of well-respected institutional investors is welcome news for the peer-to-peer lending sector, which has been showing signs of vulnerability of late.
The funding round, led by Accel, and supported by investors including Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek and Union Square Ventures, cements Funding Circle’s position as the leading online peer-to-peer marketplace in Europe. To coincide with the announcement, Funding Circle also said yesterday that its total lending to small businesses globally has now reached £2.5bn – including £1.1bn of advances made last year alone.
The latest equity investment takes the total amount of funding raised by the business to £300m since its launch in 2010. By some valuation yardsticks, the company has already exceeded the magic $1bn mark that qualifies it for membership of the ‘unicorn’ club; whether you buy that valuation or not, there’s no doubt that Funding Circle is one of the most successful of all the FinTech businesses launched in the UK so far.
Long may that success continue – in the meantime, one of the most gratifying aspects of this fund-raising is that it appears to reaffirm investors’ belief in the wider peer-to-peer lending industry. That’s an important shot in the arm, for after several years of stellar growth and near universal praise, 2016 was the year in which people began to ask some pressing questions of the sector.
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