Today, Funding Circle announced that they have closed on a $100 million equity round. The round was led by Accel with participation from existing investors Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek and Union Square Ventures. In total, Funding Circle has now raised $373 million.
According to the release, Funding Circle UK had 90 percent year over year growth in Q4 and is now profitable. Lending in Q4 2016 was approximately $485 million. Another vote of confidence came just a week ago when it was announced that the British Business Bank (a state owned entity) was investing an additional £40 million on the platform to support small businesses. The bank had previously committed £60 million, invested over the last several years.
CEO and Co-Founder of Funding Circle Samir Desai stated:
Funding Circle is changing the financial landscape for small businesses and investors globally, ensuring a better deal for everyone and helping to create a more sustainable and fairer economy. Today’s news is the next step on our journey to create a category-defining company that helps thousands of small businesses access finance and create jobs. Over the next 12 months, lending through the Funding Circle platform will create a further 50,000 new jobs, supporting economic growth in the UK, US and continental Europe.
Harry Nelis, Partner at Accel highlighted that this investment makes Funding Circle the largest and best capitalized SME lending platform in the world.
Conclusion
This new round is a testament to what the team at Funding Circle has built. While it has been widely reported that VC funding has dried up over the last year we still have seen some deals get done. Clearly the easy money is gone but I think what this round and several others show is that investors still believe in companies in this industry, particularly the ones built to last. Funding Circle is one of few of a platforms that have been able to get to profitability and they are certainly one to watch out for in 2017.
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