UK's Funding Circle, an online marketplace lender, raises $100 million

NEW YORK (Reuters) - Funding Circle, a peer-to-peer lending marketplace used by small- and medium-sized companies, has raised $100 million in an investment round led by venture capital firm Accel.

Existing investors including Baillie Gifford, DST Global and Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek and Union Square Ventures also participated in the round, the company said. Accel, formerly Accel Partners, first backed the company in 2013.

Funding Circle, a London-based website founded in 2010 with a presence in the United States and several European countries, is one of Europe’s largest and most valuable fin-tech startups. It connects a small business looking for a loan to investors through its online platform and has originated more than $3 billion in loans for 25,000 businesses globally so far.

The company raised $150 million from investors in April 2015, in a round valuing it at more than $1 billion. Valuation for the latest investment was not disclosed.

The investment is the largest venture capital funding round in a UK-based fintech startup since the country voted to leave the European Union in June, according to data provider CB Insights. The referendum’s outcome has raised concerns about its impact on Britain’s fintech sector.

Tandem Bank in December raised the second largest investment for a UK fintech company since the Brexit vote in a $43.3 million corporate minority round.

The round follows a year of increased lending volume for the company, despite some growing pains for the wider peer-to-peer lending industry.

Listed P2P lender LendingClub sent shockwaves through the U.S. marketplace lending sector in May when its chief executive and co-founder, Renaud Laplanche, resigned abruptly after an internal review into loan practices. U.S. marketplace lenders had already been experiencing a softening of institutional investor demand for loans.

Funding Circle said it has experienced significant growth over the past 12 months, with $483 million lent through its platform alone. In April, it became the first marketplace lending platform in Europe to have its loans securitized.

Reporting by Anna Irrera; Editing by Steve Orlofsky