Time to make way for another startup juggernaut out of the financial world. Funding Circle — a London-based peer-to-peer platform for small businesses to get loans, and investors to put up money to finance those loans — is today announcing that it has raised $150 million in venture funding, in a round that we have confirmed values the startup at over $1 billion.
News of the financing leaked out ear earlier this month; now we have the details: this latest round was led by DST Global, with participation also from Baillie Gifford, a fund managed by BlackRock, Sands Capital Ventures and Temasek.
“We are delighted to support Samir and the team at Funding Circle as they continue to grow and deliver value to both sides of their marketplace,” said Yuri Milner, founder of DST Global in a statement.
While the company’s valuation vaults it into the so-called “unicorn” club, it’s about to pass another billion landmark. Funding Circle is on target to loan out $1 billion on its platform this calendar year.
Additionally, it’s announcing some key appointments to bolster its growth. David Yu, formerly the CEO and CTO of online betting business Betfair, is Funding Circle’s new chief product officer. It has also appointed Chitra Nayak, previously COO of Salesforce’s Platform business, as its U.S. COO.
Samir Desai, the co-founder and CEO of Funding Circle, tells me that the company was not actively looking to raise the money and doesn’t even actually need it at the moment (sound familiar?). Of the $65 million it raised last summer, the “vast majority is still on the balance sheet,” he said in an interview.
The company is currently active in the U.S. and UK markets, and it has plans to expand to further countries later this year. But even with the volumes of transactions it is already seeing there is a lot of room to grow.
“Even in the UK where we’ve lent over £600 million the amount of awareness among small businesses is still low,” he said. “Less than 5% of businesses have heard of us, and the proportion is even less in the U.S.” So part of the investment the company will make going forward will be in marketing “To drive more users to our services,” he said.
Launched in 2010, Desai says that Funding Circle currently has around 40,000 investors putting money up for loans on its platform, with lenders ranging from individuals through to large institutions like the UK government.
Funding Circle has now raised $273 million to date, with other investors including Index Ventures, Accel Partners, Union Square Ventures and Ribbit Capital.
More to come.
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