Alternative credit startup CommuterClub has raised more than $1m over the past six months to build its low-cost loan business that helps commuters pay for annual travel passes in London.

CommuterClub closed an initial $800,000 angel round at the end of last year, with funders including Peter Jackson, CEO of Travelex, Kevin Reynolds, founder of Bridgepoint equity investment, and Adam Knight, founder of SAS Capital and  investor in the Bitcoin exchange Coinfloor.

The company smashed the $1m mark in March and will be raising additional angel funds, and opening up a public crowdfunding round, in the coming months. CommuterClub hopes to reach a multi-million dollar funding figure in the next quarter.

CommuterClub enables people who want to buy an annual Travelcard, which works out cheaper than getting daily, weekly or monthly tickets, but are unable to pay from £964 to £3,348 upfront, or get a loan from their employer.

CommuterClub charges 5.6% of the cost of the annual pass in return for the loan, which is facilitated by peer-to-peer lender RateSetter, and the customer pays back a monthly ‘subscription’ fee. Should you fail to pay or want to cancel, CommuterClub simply cancels the card and cashes in the pass.

“Commuting in London is expensive, especially if you want to keep things hassle free and sort out your travel for the year – an annual travel card, which is the most discounted, still costs thousands of pounds,” said founder Petko Plachov. “For many consumers there is a clear issue of cashflow. People are paid monthly, whilst needing to have enough money for payment of a full year’s travel. In providing access to a flexible, affordable alternative yearly travel card, Commuter Club is helping solve this miss-match.”

Having launched in January last year, by August, the Southwark-based startup had already lent £1m for around 500 annual Travelcards.

Image credit: Julius Kielaitis