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Peer2Peer Finance News | January 24, 2018

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The biggest P2P funding deals of 2017

The biggest P2P funding deals of 2017
Marc Shoffman

INSTITUTIONS have become an important source of finance in the peer-to-peer sector and interest from organisations such as state-backed banks and asset managers has grown during 2017.

The latest Cambridge Centre for Alternative Finance (CCAF) report on the industry found the role of institutions is on the up, accounting for 25 per cent of property lending, 28 per cent of business lending and 32 per cent of consumer lending, last year.

But 2017 has been a busy year for institutions backing P2P.

In January, the government-backed British Business Bank pledged a further £40m for lending through business P2P platform Funding Circle.

The investment takes the total amount lent by the UK government through the platform to £100m.

The government’s Business Finance Partnership was an early backer of Funding Circle, making a £20m investment in 2013, while the British Business Bank lent a £40m sum in 2014 through its commercial arm British Business Bank Investments.

Funding Circle also secured an agreement with Dutch insurer Aegon in August to back £160m of loans on the platform.

Invoice finance and business loans provider MarketInvoice has also been pretty busy this year, having secured funding deals with Portuguese online bank Banco BNI Europa worth £45m a year, another £45m from German private bank Varengold and £50m from an Investec partnership.

In October, business lender ThinCats, alongside its parent firm ESF Capital, announced the conclusion of a £200m institutional funding programme, made up of £30m already committed by ESO Capital, £70m from Waterfall Asset Management, with the balance provided by Waterfall and other institutional investors, subject to certain conditions.

Outside the business lending space, property investment platforms have also reaped the benefits of institutional support.

LandlordInvest received financial backing from London property investor Alan Gabbay in July.
The P2P buy-to-let platform raised an undisclosed sum of seed funding from Gabbay, director of property investment firm O&H Properties.

Filip Karadaghi, chief executive of LandlordInvest, said the funding would be invested in technology on the platform.

Meanwhile, alternative property lender LendInvest announced a new long-term financing partnership with Citi to fund loans in the buy-to-let space.

LendInvest, which no-longer operates in the peer-to-peer space, revealed that it now manages more than £500m of lending capital on behalf of its institutional lenders, and more than £750m in total.

Not everyone is comfortable with the role of institutional money in the sector, with some raising concerns that it may conflict with the retail investor base, but its record speaks for itself and so far the industry seems to be thriving for both cohorts.