It’s another feather in the hat for London’s fintech (financial technology) community today as superstar Funding Circle announces that it has raised a colossal $65m in its series D funding round.
That’s one of Europe’s biggest ever funding rounds.
And Funding Circle was only launched in 2010.
Funding Circle provides loans to SMEs, but it’s very different from a bank, because the money lent can, in theory, come from anyone.
It started with retail investors, but now various local authorities, the government and institutional lenders are also investing through Funding Circle, and it recently struck a large deal with Santander.
Funding Circle is expecting to lend $600m to small businesses in 2014. In pounds, it has lent more than £316m in total at time of writing.
Investors get an average 6.1% return and can choose the level of risk they want, while Funding Circle takes a 1% annual fee on money received in payment for a loan, and 0.25% if you sell on a loan.
Funding Circle was co-founded by Samir Desai (CEO), James Meekings (CMO) and Andrew Mullinger.
Betfair co-founder Ed Wray is a director and a private investor, and Carphone Warehouse co-founder Charles Dunstone has also invested in the business.
Funding Circle has raised $123m in equity funding in total. It rasied $58m of that in October 2013.
This latest round was led by Index Ventures, and existing investors Accel Partners, Union Square Ventures and Ribbit Capital also contributed.
Neil Rimer, partner and co-founder of Index Ventures said: “We view Funding Circle as a category-defining company that pioneered a marketplace for business loans.
“Its founders exemplify the new class of fintech entrepreneurs who are combining technology and novel business models to offer much better value than banks and other incumbents have been offering their customers.”