Brazilian Fintech firm IOUU, which offers a peer to peer (P2P) marketplace solution, has managed to secure funding from several venture capital firms. IOUU has acquired R$6 million (appr.$1.3 million) in funding from DOMO, which led the firm’s latest investment round. Indicator Capital and Devas Invest also took part in the round, according to a company announcement made on February 10.
The Brazil-based Fintech company aims to use the funds raised to develop several business applications. IOUU says it will also improve its existing technology stack. The company intends to upgrade its risk analysis assessment tools.
It will also use the capital acquired for supporting its ongoing marketing and sales activities. Additionally, the company hopes to onboard more firms to its P2P lending platform.
The Fintech firm previously secured R$2 million (appr. $461,000) through a separate funding round.
Unlike most other lending firms, which directly issue loans to small and medium-sized enterprises (SMEs), IOUU is actually a marketplace.
The Fintech firm’s platform allows market participants to issue micro-loans to businesses, and in exchange for their contribution, they can charge borrowers interest. Platform users can take out loans starting as low as R$500 (appr. $115), IOUU’s website states.
Any entity that provides loans via the platform must be aware that there’s no guarantee their capital will be recovered (in case of defaulters). However, the Fintech startup aims to offer assistance in this area through its credit risk analysis tools and by verifying the borrower’s documentation.
The Fintech firm then officially began its business operations in 2018. It presently manages R$15 million (appr. $3.4 million) in outstanding loans issued by 11,000 registered investors.
Lenders are only earning between 1.3% to 3.9% for issuing loans via the IOUU platform