Online business lending specialist Funding Circle announced it has raised $65 million in a Series D funding round led by Index Ventures with participation from existing investors, Accel Partners, Union Square Ventures and Ribbit Capital.
The company said the latest funding would be used to continue to fuel the company’s global growth, expand product ranges and explore new international markets.
Launched in 2010, Funding Circle is hoping to change the way small businesses access finance. Through the Funding Circle marketplace, small businesses can borrow directly from thousands of investors, including people and government in the United Kingdom, as well as institutional lenders.
Funding Circle USA’s online marketplace allows accredited investors and institutions to invest in small businesses seeking to borrow $25,000 to $500,000 through whole loans or a passive fund.
"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," Neil Rimer, partner and co-founder of Index Ventures, said in a statement. "Funding Circle’s exciting partnership with Santander reflects the degree to which this proposition has entered the mainstream and is recognized by forward-thinking banks as a massive opportunity."
The news follows Funding Circle’s growth in both the U.S. and U.K. markets over the past 12 months.
The marketplace lender is on track to lend $600 million in 2014. Since launching in the United States at the end of 2013, Funding Circle has increased its lending to American businesses by 500 percent and is expected to lend $100 million by the end of 2014.
In addition, Robert Steel, CEO of Perella Weinberg Partners, will join the Funding Circle board. Steel has approximately 40 years of public and private sector experience, having served as former Under Secretary for Domestic Finance of the United States Treasury, CEO of Wachovia, vice chairman of Goldman Sachs and deputy mayor of New York.
"We are thrilled to welcome Bob to our board. His expertise and experience is unparalleled. This latest round of funding will fuel our global ambitions and power the next phase of our evolution – catering for the increase in demand we expect to see over the next 12 months," Samir Desai, CEO and co-founder of Funding Circle, said in a statement. "Our vision is to build a better financial world, helping more small businesses access finance and offering attractive returns to investors."
In May, the company introduced a new risk tier that allows the company to serve one-quarter more of its U.S. small business loan applicants.
The tier was designed for borrowers who have traditionally faced difficulty in obtaining a loan, and will also provide an opportunity for investors who seek greater returns and diversification.