Here at MonJa we have a strong pulse on what’s happening in the marketplace lending space. During our weekly team meetings, we always spend time discussing recent peer to peer lending activity. This week we discussed the increase in venture capital funding amongst financial tech companies. These past months, VCs have invested heavily in this space- a sign of much future growth and opportunity. Specifically, here are three companies who recently raised rounds-
1. Prosper Marketplace
In early April this San Francisco based company raised $165M in funding. Since its early days in 2006, Prosper has gained over 2.2 million users and has funded over $2B in private loans. With the recent funding, the company is now valued at $1.7 billion, and they plan to use the new money toward growing its user base and diversifying the kinds of loan services is has to offer. (source: NY Times). This diversification strategy fits in with recent moves, as earlier this year Prosper acquired American HealthCare Lending. CEO Aaron Vermut cites an intention to expand into new verticals, saying “we have an opportunity to bring a consumer-friendly and potentially disruptive option for financing elective medical procedures to an industry that has been characterized by high rates and a lack of options.” (source: Prosper Website)
2. Funding Circle
Also joining the financial tech club of startups valued at $1+ club, Funding Club Circle raised $150 led by ST Global. Based in London, Funding Circle is currently active in the US and UK markets, with the intention of expanding to other countries. Launched in 2010, there are roughly 40,000 investors putting money up for loans on its platform, from individuals to large institutions such as the UK government. (source: Tech Crunch)
3. Smava
Keeping pace with the US and United, Smava, a German based company, recently raised $16M by Phenomen Venturesm, whose financial tech investments also include Prosper. Smava’s loan originations grew by 100% last year, and they have loaned out $600 million through its platform. CEO Alexander Artopé said “This fresh capital enables us to accelerate our business growth as well as to fulfill our vision of offering fully-automated loans to borrowers at best rates in the near future” (source: Tech Crunch)
Along with these three big players, the MonJa team noticed an immersion of several marketplace lending platforms at the annual Lendit conference. Since 2009, there has been a growth of +130% of marketplace lending, increasing from $1 million to around $9 billion (source: Lending Club), a main reason so many new players have entered the space that is ripe for opportunity
For a comprehensive list of all the players, check out this marketplace landscape map:
It goes without saying, MonJa is excited to be in this opportunistic industry. Stay tuned for a preview into more discussions that happen during our weekly meetings. Potential topics include lending club loan analysis, active vs. passive investment strategies, and finding the efficient frontier in marketplace lending. What are you most interested in hearing about? Let us know!