There is some big news out of Funding Circle this afternoon. They have raised $65 million in a Series D offering led by Index Ventures with participation from several of their existing investors. They also announced that Bob Steel, who has a very impressive resume, has been added to their board of directors.
This large raise more than doubles the total amount that Funding Circle has raised to date to a total of $123 million. This comes only eight months after their $37 million raise in October of last year when Funding Circle merged with Endurance Lending Network to create Funding Circle USA.
Also part of this announcement today is the appointment of the former vice chairman of Goldman Sachs, Bob Steel, to the Funding Circle board. Steel was the CEO of Wachovia until their merger with Wells Fargo in 2008 and was also the Under Secretary of Domestic Finance at the US Treasury from 2006 to 2008. Clearly, he brings some serious expertise and knowledge to the Funding Circle board.
I chatted with the Sam Hodges, the managing director of Funding Circle USA about this new funding round and he was quick to point out that they are doing this Series D round from a position of strength. They are not in need of this money today, in fact he pointed out that the majority of the $37 million raised last year is still sitting on their balance sheet.
When I asked Hodges specifically what the money from this $65 million round would be used for he indicated that the majority of this money would be spent in the US and there were three areas of focus:
- Continue their investment in tech, systems and people.
- Expand their marketing – they want more small businesses to learn about Funding Circle as a loan option.
- Exploring new product lines and geographies.
When I pressed Hodges on some more details he was, not surprisingly, tightlipped. But he did say this. In the UK they have started issuing loans for commercial property, so they will be looking to add this product in the US as well. He said that Funding Circle wants to eventually have a range of products to help the small business owner with all of their lending needs.
Interestingly, they will also be looking to expand their horizon beyond the UK and US – selectively looking at some of the more developed markets. Nothing is imminent and no clues as to what countries are high on their list but we could see Funding Circle expand to a third country soon. My guess is Australia, although I have no inside information on this whatsoever.
This year continues to go well for Funding Circle both in the US and the UK. Hodges said that they are on target to hit their goal of $100 million in originations this year in the US. The UK expects to lend around $500 million this year. At $600 million in new loans that establishes Funding Circle as the clear small business leader in the marketplace lending industry globally.
Here is a link to the official press release as well as coverage in The New York Times.