April 27, 2015

Lendio raises $20 million to invigorate online lending

Online lending marketplace Lendio recently raised more than $20 million through a funding round led by Napier Park Financial Partners. South Jordan, Utah-based Lendio, which uses innovative technology to connect small businesses with lenders, plans to use the money to enhance its relationships with lenders, invest in improving its online resources and expand its partnership program. 

Rapid expansion
Lendio is looking to further capitalize on a rapidly expanding market, as figures provided by Accenture reveal that between 2008 and 2013, global investment in financial technology rose by more than 200 percent. 

Amid this torrid growth, Lendio has thus far managed to raise more than $30 million from investors, Brock Blake, CEO and co-founder of Lendio, told The Wall Street Journal.

Funding success
The latest funding round involved Blumberg Capital, Pivot Investment Partners and North Hill Ventures, along with Napier Park Financial Partners. Runa Capital, Tribeca Venture Partners and Highway 12 Ventures, who provided funding earlier, returned to contribute to this most recent round. 

Following the success of its latest round, both Dan Kittredge, managing director for Napier Park, and Chris Gottschalk, principal for Blumberg Capital, will take seats on Lendio's board. 

Kittredge emphasized the company's success in a statement, noting its ability to forge partnerships with brands such as Staples, enjoy rapid growth and provide an innovative platform that assists borrowers and lenders in finding each other. 

Lendio's innovative model
The company currently leverages machine learning - along with other programs - to help create connections between borrowers and lenders, Brock Blake, CEO and co-founder of Lendio, told The Wall Street Journal. 

To start the process, potential borrowers answer several questions, providing some basic information on their business, The Wall Street Journal reported. Next, the platform gathers other key information about the applicant, including its revenue, credit score and collateral.

The software then takes this information and uses it to link the potential borrower with lenders that might be a good fit, according to The Wall Street Journal. Because Lendio has a network boasting more than 100 lenders of different types, a business seeking money may find opportunities with a traditional bank or a more fledgling company such as Kabbage. 

Once these lenders originate loans to borrowers, they might consider selling their loan portfolios for a variety of reasons. In such circumstances, financial institutions could work with Garnet Capital Advisors, a loan sale advisory firm that can leverage its relationships with banks and distribution channels to facilitate such transactions.