iwoca, one of Europe’s premier SME lenders, has unveiled a significant financial milestone in its trajectory.
The company has successfully raised an impressive funding line of £200m, with investments coming from renowned institutions – Barclays and Värde Partners.
iwoca has consistently bridged the funding gap for small and medium-sized enterprises (SMEs). With traditional high-street banks gradually diminishing their capital access for SMEs, iwoca has emerged as a reliable source, fulfilling the increasing demand for working capital among these businesses.
The new funding will be pivotal for iwoca as they endeavour to cater to the burgeoning demand from SMEs. The company’s Q2/23 SME Expert Index reveals an alarming trend where 84% of brokers affirm that high street banks are curtailing their funding enthusiasm for SMEs.
This number has seen an increment of 7 percentage points since Q1 2023. Furthermore, a vast majority (81%) of SME finance experts anticipate the finance demand for SMEs to escalate by the year’s conclusion, suggesting that the funding disparity is poised to grow unless countered by alternative lending solutions like iwoca.
Having commenced its operations in 2012, iwoca has achieved the commendable feat of lending over £2.5bn across more than 120,000 business loans, predominantly in the UK and Germany. Fast-forward to Q3 2023, and the company is on the cusp of doubling its small business loan offerings from the numbers in 2021. It’s noteworthy to mention the sectors that have been the major beneficiaries of iwoca’s funding – construction (15%), retail (11%), and manufacturing & food production (10%).
iwoca CEO and co-founder Christoph Rieche remarked, “We started iwoca after the financial crisis to offer SMEs the support that was so badly needed during uncertain times. Now, over 10 years later, we are fully tested and have proven that we can be there for SMEs when they need us the most. With this new funding, we’re in an even better position to help smaller businesses in the UK and Germany at a time of economic uncertainty. These SME businesses form the basis of a strong economy, and iwoca will lead from the front to help them thrive and achieve their goals.”
Echoing the sentiment, Aneek Mamik, Global Head of Financial Services & Diversified Private Credit at Värde Partners, expressed, “We are pleased to support the expansion of commercial financing opportunities in the UK through iwoca. iwoca’s differentiated sourcing and underwriting capabilities give us access to a high-quality portfolio of commercial businesses. This builds on our leading position in providing commercial lending and leasing solutions to parts of the economy increasingly underserved as banks are less able to meet the full spectrum of the demand.”
Earlier in January, iwoca had fortified its financial standing by augmenting its funding line, in collaboration with its long-standing ally, Pollen Street Capital. The funding line saw an increase from £125m to a substantial £170m, courtesy of the surging demand for SME finance. With the latest £200m injection from Barclays and Värde, the total debt commitments have skyrocketed to over £850m.
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