Global Marketplace Lending investment on track to surpass funding levels from last year

Almost $5bn has been raised by Marketplace Lending companies in the first six months of 2018

  • Over $33.5bn was invested in the Marketplace Lending sector between 2014 and the first half of 2018, with 1,128 deals completed. The Federal Reserve estimates that there is still unsatisfied credit demand in the hundreds of billions of dollars and consequently Marketplace Lending companies are entering where traditional lenders such as banks have been retreating.
  • Marketplace Lending companies raised $4.8bn in H1 2018, equal to 60% of the capital raised in 2017, setting strong expectations for the second half of 2018.
  • Paris-based Lendix, an SME finance provider, raised $245.1m of debt in Q1 2018 from investors including Zencap Asset Management. Lendix is the market leader in France with 60% market share and this funding, the largest European deal in the subsector to date, will enable it to support the growth of more than 600 SMEs via loans.

Investment has been on an upward trend for the past three quarters

  • Investment in Marketplace lending companies reached almost $3bn in Q3 2017 across 57 transactions.
  • London-based P2P lending platform Lendable, raised $399.8m of debt from Castle Trust in November last year. Using technology, Lendable has made efficiency improvements to the traditional loan application process, enabling the company to make instant decisions on lending.
  • Deal activity between Q4 2017 and Q2 2018 increased from 48 to 53, with investment more than doubling during the same period. Funding in Q2 2018 reached almost $3.3bn, up 10% from Q3 2017. CGTZ, a lending platform in China, raised a $359.3m Series D round In June 2018. This was the largest equity financed deal of the quarter and pushes the company’s total funding above $521m to date.

US companies dominate the top 10 Marketplace Lending deals in Q2 2018

  • More than $2.3bn was raised in the top 10 Marketplace Lending deals globally in Q2 2018, which is just under half of the total funding raised by the subsector this year so far. This ratio is lower compared to other FinTech sectors, highlighting the strong competition for capital in the industry.
  • Marketplace Lending companies in the US were involved in six of the top 10 deals in Q2, raising almost $1.4bn in these transactions, with companies from China, Canada and Ireland making up the rest.
  • LendingPoint, an Atlanta-based online lender, raised $600m of debt funding from Guggenheim Securities in May 2018. The company uses dozens of APIs to gather thousands of data points on each applicant. Its proprietary risk models enable the company to get a more complete financial picture of customers and approve more people who otherwise may have been overlooked by traditional lender.
  • Dublin-based Future Finance, a flexible student loans provider, raised $133.9m of debt funding which was the largest Marketplace Lending deal in Europe last quarter. Funding was led by Waterfall Asset Management, and has allowed Future Finance to expand its student loan portfolio in Europe.

 

North American companies claim almost 60% of the global investment in the Marketplace Lending subsector

  • Over 40% of global Marketplace Lending deals involved companies in North America, with almost $19.9bn raised across these transactions.
  • SoFi, a personal loans and refinancing solutions provider based in San Francisco, raised a $1bn Series E round in Q3 2015, which is the largest Marketplace Lending deal in the region to date. Funding was led by SoftBank and enabled the company to expand its offering from just student loan refinancing to mortgages and personal loans.
  • Companies in Asia have received a fifth of the subsector’s total investment and the new licensing framework for P2P lending introduced by Chinese regulators has pushed investors to seek opportunities in other countries in the region.
  • European companies claimed a quarter of the deals, raising more than $5.7bn between 2014 and H1 2018, with 56% of the funding going to Marketplace Lending companies in the UK. The largest deal in Europe was the previously mentioned $399.8m of debt that Lendable raised from Castle Trust in Q4 2017.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2018 FinTech Global

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