April 22, 2015 / 11:01 PM / 5 years ago

Funding Circle raises $150 mln, aims to be top UK lender to SMEs

* Can be UK’s biggest SME net lender in 2 years -CEO

* Will look to enter new markets in next year -CEO

* Former Betfair CEO David Yu appointed product chief

* Investors include Yuri Milner, BlackRock, Temasek

By Matt Scuffham

LONDON, April 23 (Reuters) - British peer-to-peer lender Funding Circle has raised $150 million from new investors, saying the funds would support growth plans aimed at establishing it as Britain’s biggest net lender to small companies.

Funding Circle, which like other peer-to-peer lenders allows investors to lend to businesses via low-cost online platforms, said its new investors included Russian billionaire Yuri Milner’s DST Global, the world’s largest money manager BlackRock and Singapore state investor Temasek.

Funding Circle, which has already lent more than $1 billion to over 8,000 businesses in Britain and the United States since its launch in 2010, said the investment would be used to support growth. That is likely to include expansion into new markets in the next year, co-founder and Chief Executive Samir Desai told Reuters.

“We’ll be exploring more markets to take our business model to. We think it works better as a global business,” Desai said, adding that the company may expand through acquisitions.

Funding Circle, which expects to enable investors to lend $1 billion through its platform over the next year, was the fifth-largest net lender to small business in Britain last year, according to data from the Bank of England, a ranking Desai said he expected to rise.

“I would expect us within a relatively short period of time to become the largest net new lender to small business in the UK, within 2 years I would say,” he told Reuters.

The fundraising is one of the largest involving venture capital investors in Britain in recent years. Other investors included Edinburgh-based asset manager Baillie Gifford and Sands Capital Ventures. Goldman Sachs was sole placement agent.

Funding Circle also said it had appointed David Yu, former chief executive of Betfair, the world’s largest betting exchange, as chief product officer.

The company has now raised $288 million in equity funding since its launch. Existing investors include Index Ventures, known for backing online video-chat service Skype in its early stages.

Peer-to-peer lending has grown rapidly in Britain since the 2007-9 financial crisis, providing an alternative source of finance for small firms as banks cut back on lending to strengthen their balance sheets and meet tougher regulatory demands.

As well as providing small firms with access to funding, the platforms allow retail investors to achieve greater returns at a time when benchmark interest rates are at record lows. (Editing by David Holmes)

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