UK P2P boosted by private equity investment

Lending Works is targeting further expansion following a £2m investment from private equity group NVM.

NVM Private Equity has invested £2 million into the London-headquartered peer-to-peer (P2P) lender Lending Works to assist in further growth of its operations.

It’s a vote of confidence in the P2P lender, which was first established only two years ago by Nick Harding, who before founding the P2P lender held director roles at NFHi and the Royal Bank of Scotland.

“NVM brings significant experience in key areas including business scalability, risk and business development and we consider their backing to be a ringing endorsement of our rapid progress as a company,” said Harding.

According to the firm, the introduction of the Innovative Finance ISA and the FCA legislation covering P2P lenders in the UK has enhanced the image of the nascent market. Research from AltFi Data cited by Lending Works said that total P2P lending volumes hit £2.8 billion last year, and is expected to rise to £4.3 billion this year.

Charlie Pidgeon, an investment manager at NVM, said: “We believe the P2P market has significant growth ahead and through the partnerships the company has built over the last 12 months the business will be able to scale rapidly post investment.”

The European Commission (EC) is also keen to push marketplace lending as an alternative source of financing for small and medium-sized enterprises. In May, the EC published a report outlining concerns that the market operates with a domestic perspective, rather than across member states’ borders.

One step in the direction of increased cross-border activity in the P2P market was announced today as Spanish authorities granted French P2P lender Lendix the right to operate in the country. The Comision Nacional del Mercado de Valores, the body responsible for regulating crowdfunding platforms in the country, confirmed that Lendix can provide capital to SMEs in the country.

Lendix is targeting the appointment of six people to work in the Spanish office and is eyeing an additional 10 hires next year. The firm hopes to start lending by the end of this year. Ticket sizes will range between €30,000 and €2 million at interest rates between 5.5 percent and 12 percent. SMEs qualifying for loans are required to have a turnover of at least €400,000 per annum.

“Spain is a high potential market with a network of companies that benefit from a rebound in the economy. Crowdlending as a new source of funding for SMEs, has the ability to contribute further to this dynamic. Thanks to the green light from the Spanish regulator, Lendix is now in position to put in motion its launch plan with the creation of a Spanish entity and the recruitment of a local team,” said Olivier Goy, founder of Lendix.