Funding Circle Facts

Peer to peer lending is super hot right now.  The new approach to providing loans by leveraging technology to match investor with borrower had it’s genesis in the United Kingdom.  Since then it has quickly spread across the globe as compelling efficiencies have been delivered to the lending market.  Banks, challenged by antiquated systems, geriatric cultures, over-regulation and a general aversion to innovation have largely watched on the sidelines.  This will change of course as traditional banks rouse from their slumber and realize they are quickly being disrupted.  We are already seeing this exemplified by agreements like Santander and Funding Circle recently announced.

Georgia Quinn, a securities attorney, peer to peer expert, and Senior Contributor to Crowdfund Insider, commented on the announcement by Funding Circle of the $65 Georgia Head Shot NYCmillion investment stating;

“This is huge for Funding Circle and a validating moment for the industry. Having such influential figures from the financial industry join the team truly legitimizes marketplace lending. Of course, I hope the real winners today are the small and startup businesses struggling for capital and that Funding Circle turns today’s news into thousands of success stories.”

With some industry followers predicting that peer to peer lending will quickly become a $1 trillion industry – this is an exciting time for Funding Circle and their peers.

Funding Circle Logo

What is Funding Circle?

Funding Circle is a peer to peer or “marketplace lender” exclusively focused on small business. They help accredited and institutional investors lend money to American and UK small business owners looking for finance to grow their business, create new jobs and ultimately accelerate economic growth.

Every day, thousands of successful small business owners struggle to get loans to grow their businesses, battling endless streams of paperwork and unreasonable lending terms. By combining cutting edge technology with industry-leading risk management models, Funding Circle provides small businesses with access to fast, fair and transparent finance; and investors with the opportunity to access attractive returns through an online marketplace.

Funding Circle believes the old banking system is broken, so they are “building a better solution”.

Their mission: to build a better financial world.

Basic Stats

  • Year founded: 2010
  • Launched in the U.S.: October 2013
  • Amount lent to small businesses globally to-date: $525 million
  • Expect to lend $600 million internationally in 2014
  • Expect to lend U.S. small businesses approx. $100 million in 2014
  • Number of employees: 160 (as of Q1 2014)
  • Headquarters: San Francisco and London

Why Funding Circle?

  • Flexible Loan Size: $25,000 to $500,000 small business loans (up to £1 million in UK)
  • Affordable Interest Rates: From 9.99% to 20.99%
  • Simple and Manageable Payments: 3 to 5 year terms and fixed monthly payments
  • Transparent fees: Only a 2.99% origination fee
  • No Prepayment Fees: Funding Circle doesn’t penalize borrowers who repay early
  • Quick Application Process: Full application takes less than 10 minutes
  • Fast Decision: Pre-approval within 48 hours and funds in under 14 days
  • Paperless Process: Electronic documentation and signatures save time and paper

COMPANY STORY

U.S. Management Team

  • Sam Hodges: Co-Founder and U.S. Managing Director
  • Andrew Mullinger: Co-Founder and Global Head of Credit 2

UK Management Team

  • Samir Desai:  Co-Founder and CEO
  • James Meekings:  Co-Founder and CMO
  • Andrew Mullinger:  Co-Founder

Equity Funding

  • Total funding to date: $123M
    • Seed Funding (Feb. 2010) – $1.1M. Investors: Founders, Friends and Families
    • Series A – $ 4.14M (April 2011). Investors:

Index Ventures

  • Series B – $16M (April 2012). Investors:
    • Union Square Ventures
    • And prior investors
  • Series C – $37M (October 2013). Investors:
    • Accel Partners
    • Ribbit Capital
    • And prior investors
  • Series D – $65M (July 2014). Investors:
    • Index Ventures
    • Accel Partners
    • Union Square Ventures
    • Ribbit Capital

Funding Circle’s U.S. Founding Story

Funding Circle was born out of frustration with the traditional small business loan process. As small business owners themselves, Funding Circle’s two U.S. founders, Alex Tonelli and Sam Hodges, experienced first-hand how hard it is for small businesses to access finance.

Alex and Sam were classmates at Stanford Business School and after first embarking on separate successful careers in finance and technology, opened a chain of successful fitness centers together. When they couldn’t get a small business loan to grow the business – despite the company’s great success – they knew something was wrong not just for them, but for the majority of the engine of the economy. So, they set out to build a better solution for American small business owners.

About Sam Hodges

As Co-Founder and U.S. Managing Director, Sam is responsible for overseeing the overall strategic direction and day-to-day operation of Funding Circle in the U.S. Under his leadership, the U.S. business has grown exponentially since its foundation in 2012 and has emerged as the world’s largest online marketplace exclusively focused on small business loans. He co-founded the company after seeing how hard it was to get a loan for the small business he helped build, a successful gym franchise.

Before co-founding Funding Circle, Sam served as vice president of business development at SecondMarket, the leading marketplace for alternative investments. There, Sam was responsible for corporate and business development and the company’s geographic expansion efforts. Sam was also part of the investment team at Pequot Capital, an $8 billion global fund manager, where he covered investments in financial technology and information services. He started his career as a strategy consultant at Katzenbach Partners, where he advised financial services and technology companies. Sam currently serves on the boards of two private companies. He received his MBA and MS from Stanford University and graduated, magna cum laude, from Brown University.

 

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