VPC announces European marketplace lending agreement

The US-based alternative lender will make loans to European SMEs via Germany-based Zencap. The firm already has a lending agreement with the UK’s Funding Circle.

Victory Park Capital (VPC) has signed a partnership with European online lending platform Zencap. The Chicago-based firm will make loans totalling up to €230 million via the small- and medium-sized enterprise lending platform over the next three years.

Zencap connects borrowers and investors in Germany, Spain and the Netherlands. VPC will invest in loans across the platform’s different geographies. Investors are treated equally and it is not possible for lenders to cherry pick under a pre-defined allocation mechanism, a spokeswoman for Zencap said. 

The tie-up makes VPC the largest institutional investor using the Zencap platform but the lender is still open to other institutional investors, the spokeswoman added.

“While VPC will remain the largest institutional partner for the near future, we are in continued discussions to take on additional interested parties to invest in Zencap loans,” she said. 

VPC will part finance the €230 million investment with a bank credit line, the firm said. “We are impressed with the Zencap team’s ability to execute an ambitious strategy, and their results in the three countries they operate in give us confidence that this emerging platform is serving a critical market need,” said Gordon Watson, principal at VPC.

Zencap, which is based in Berlin, facilitates small business loans of between €5,000 and €250,000. It was founded in March 2014. 

VPC manages a UK-listed investment trust, VPC Speciality Lending, which invests in loans originated by marketplace lending platforms. It already has an agreement with the UK’s Funding Circle.

VPC is currently fundraising for its $400 million VPC Private Debt Fund and has a $650 million target for its third special opportunities closed-ended fund.