Global investment in Marketplace Lending companies reaches a record, with almost $10bn raised last year

More than $40bn has been raised by Marketplace Lending companies since 2014

  • Almost $40.3bn was invested in the Marketplace Lending sector between 2014 and 2018, across 1,219 deals. The sector has expanded rapidly since the great financial crisis of 2008, as alternative lenders fill the void created by tougher lending standards imposed on banks by regulations such as Basel III.
  • Marketplace Lending companies raised just under $10bn in 2018, across 188 transactions, pushing the average deal size to $53.2m, up from $39.3m in 2017.
  • Lending Point, an online direct loan provider in the US, raised a $600m credit facility from Guggenheim Securities in Q2 2018. This was the largest deal in the sector last year and has enabled the company to increase its volume of direct to consumer online loans of between $2,000 and $26,500.

 

Investment in Q3 2018 set a record with funding topping $3.3bn

  • Investment and deal activity in the sector was in an upward trend between Q1 2018 and Q3 2018, before dipping in the last quarter of the year. Funding in Q4 2018 fell to $2.4bn across 30 transactions but the average deal size reached $80.5m, up from $54.3m in Q3 2018.
  • Funding in Q3 2018 set a record for quarterly investment in the subsector, with Marketplace Lending companies raising almost $3.4bn across 62 deals.
  • London-based Prodigy Finance, a postgraduate loan provider to international students, raised $996.8m of debt from Sumitomo Mitsui Banking Corporation, M&G Investments, Goldman Sachs and Deutsche Bank. This was the largest Marketplace Lending deal in Q3 2018, with CEO Cameron Stevens mentioning that it will allow even more students “with limited or no funding” to study abroad.

 

Asian companies’ share of Marketplace Lending deals has doubled over the last five years

  • There were 1,219 Marketplace Lending deals between 2014 and 2018, with these transactions spread across all regions of the world, however North America has dominated investment activity over the past five years.
  • In 2014, more than half of all Marketplace Lending deals were closed in North America, however this figure declined to just under a third last year as investors look for opportunities in emerging FinTech hubs of the world.
  • Asia saw the largest increase between 2014 and 2018, with the proportion of deals in the region doubling from 17.3% to 34.1% during the period. Linklogis, a supply chain finance provider based in Shenzhen and backed by Tencent Holdings, raised a $220m Series C round which was the largest Asian Marketplace Lending deal of Q4 2018. This funding, led by GIG, will enable Linklogis to further leverage AI and blockchain to help solve financing difficulties for Chinese SMEs.

 

More than $2bn was raised in the top 10 Marketplace Lending deals in Q4 2018 alone

  • More than $2.1bn was raised in the top 10 marketplace Lending deals in Q4 2018, which is equal to 87.6% of the total capital raised in the sector last quarter, with the top 10 deals spread across North America, Asia and Europe.
  • London- based Funding Circle, a lending platform connecting debt investors with SMEs, raised more than $1.1bn of debt from Waterfall Asset Management in December 2018, following its $390m IPO in September 2018. This debt facility was the largest Marketplace Lending deal in Q4 2018 and will support approximately 14,000 small businesses.
  • Earnin enables consumers to get an advance against their salary instead of having to wait until the end of the month to receive a pay check. The San Francisco-based company raised a $125m Series C round in December, which was the largest deal in the subsector in North America last quarter. Funding was led by Spark Capital, DST Global and Andreesen Horowitz.
  • Oriente raised a $105m Series A round in December 2018, from investors such as Sinar Mas Group and JG Summit Holdings in November 2018. This was the largest deal in Hong Kong in Q4 2018 and the P2P lending solution provider, founded by Skype co-founder Geoff Prentice, is now looking to launch operations in Vietnam.

 

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. ©2019 FinTech Global

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