UK private equity house Maven Capital Partners (Maven) has completed a GBP2 million investment in Lending Works, a UK peer-to-peer (P2P) lender.
The total transaction value also includes GBP800,000 of funding from NVM Private Equity, Pollen Street Capital, and a small number of business angels. The investment will be used to strengthen Lending Works’ sales and marketing function to support the continued expansion of the business, capitalising on the significant growth forecasted in the P2P market, and enabling it to originate and convert more loans through its established sales channels, such as brokers and price comparison sites.
Founded in 2014 by CEO Nick Harding and CFO Matt Powell, Lending Works’ highly scalable platform seamlessly connects private and institutional lenders to borrowers, comprising both corporates and individuals. Lending Works provides an alternative to traditional lenders such as banks and building societies for customers seeking a loan, helping them to take control of their own finances. These loans are both low cost and flexible, and also deliver a strong yield to lenders or investors, which often betters the rate that they could typically receive on their savings.
The business was the first major P2P platform to be fully authorised by the Financial Conduct Authority, the first to be authorised to provide an ISA offering and also is the first P2P provider to have negotiated insurance cover for its lenders, providing protection against borrower debts. This enhanced protection means lenders can take greater comfort that their money is secure.
Having experienced rapid growth in recent years, Lending Works has become one of the largest P2P consumer lending platforms in the UK; customers have already borrowed a total of GBP115 million, 27 per cent of which (GBP32 million) was distributed in the first half of 2018 alone. Today’s investment will help strengthen the operational team to further streamline Lending Works technical platform, as well as adding additional resource to its sales and marketing function to help develop new strategic partnerships.
P2P and crowdfunding platforms are fuelling the UKs growing alternative finance market, with the sector experiencing significant popularity following the economic crisis. The global market size is growing rapidly with the overall P2P segment estimated to reach USD150 billion or more by 2025, in which Lending Works has been steadily gaining market share in the UK.
Melanie Goward, Investment Director at Maven, says: “We are delighted to lead the investment in Lending Works, which has grown to become one of the leading P2P lenders in the UK. The firm has developed a reputation in the market of being a responsible and ethical P2P market leader, which is evidenced by it being the first major platform to have been fully authorised by the FCA and the first to have negotiated insurance cover which provides lenders with protection against borrower defaults. The experienced management team, assembled and led by Nick and Matt, has a clear and executable strategy and we look forward to helping them deliver this in the coming years.”
Nicholas Harding, CEO at Lending Works, adds: “We are very pleased to have secured this investment from Maven, NVM and Pollen Capital. We have very ambitious plans to both dramatically improve the consumer credit market for customers and build a business that funds billions of pounds of loans per year. This investment will enable us to continue on that journey. The team at Maven immediately understood our business model and is hugely supportive of our growth strategy. We look forward to working with them to take the business from strength to strength.”
