Funding Circle, a UK-based online marketplace for business loans, has set its sights on the US market after securing a merger deal with local player Endurance Lending Network and closing a $37 million financing round.
Having facilitated more than $250 million in loans to small firms in the UK since its launch in 2010, Funding Circle is now 'joining forces' with smaller US counterpart Endurance Lending Network.
Launched in 2011, the San-Francisco-based outfit has carved out a niche working with fast food joint franchisees but is not releasing its loan volumes, although they are understood to be considerably lower than Funding Circle's.
However, Funding Circle says that, combined with its back-end technology platform, Endurance's established team of around 15 employees with experience of the US market will help it crack America.
The entire Endurance team will stay on at the firm, which will re-brand as Funding Circle as it targets what the Small Business Administration estimates is a $100 billion funding shortfall in the US economy.
To help do this, a sizeable chunk of the new $37 million series c financing round will be spent on the US operations. The round was led by Accel Partners and joined by new investor Ribbit Capital and early backers New York-based Union Square Ventures and Index Ventures. In total Funding Circle has now raised $58 million.
The money will also be used to extend into asset finance and commercial property products in the UK, with the firm looking to hire in experts in these potentially lucrative untapped areas of the market.
Samir Desai, chief executive, Funding Circle, says: "Financial services is going through the most significant disruption for a generation. The way businesses borrow is being transformed by eliminating the obstacles of an outdated banking system and putting owners directly in touch with investors looking to earn attractive returns."
The potential of P2P lending has also been acknowledged by the UK government, which earlier this year earmarked £55 million in taxpayer funds to be funneled through four providers; Funding Circle, Zopa, Boost and Credit Asset Management.
Funding Circle says that since March it has used the cash to make 11,000 loans, distributing £15 million of the £20 million it was handed. However, despite the success, the firm says that it has had no word yet on whether the government plans to dole out further funds.