UK BOND Network has agreed to lend £3.5m to a specialist vehicle finance provider for Uber, as the taxi app says its drivers cannot afford to buy their own cars.
The peer-to-peer bond auction platform, which allows investors to buy secured bonds issued by UK businesses, created a financing structure that Upfront Car Finance can draw down in £500,000 tranches.
Upfront was founded by Jonathan Samuels, who set up the alternative finance provider Dragonfly in 2008 and sold it to Octopus Capital in 2013.
Google’s venture capital arm, which owns a stake in Uber, contacted Samuels to address a rising churn rate among its UK drivers caused by high vehicle rental cost.
In response, Samuels created Upfront, a car finance product for hybrid vehicles.
Proceeds of the first £500,000 of UK Bond Network funding have already been used to buy new Toyota Prius cars for drivers who want to join Uber.
Uber currently has 30,000 drivers in the UK, with 1,000 more joining each month.
Chris Maule, chief executive and founder of UK Bond Network, said: “Upfront Car Finance is the sort of business we’re increasingly used to helping – a highly innovative, high potential SME in a growth sector, led by able and well qualified people such as Jonathan and his team.
“We’re delighted to be assisting Upfront in achieving its growth goals, whilst providing investors with some much needed yield in the current meagre interest rate environment.”
Jonathan Samuels of Upfront Car Finance said: “UK Bond Network provided a novel finance solution at an important time for our business. With a driver pipeline greater than cars available, the funding will help us to deploy more vehicles and scale more quickly; UK Bond Network offered what we wanted, with the added benefit of certainty of funding.”