Investor appetite for disruptive financial services appears to be showing no signs of slowing down as Lending Works, a peer-to-peer lending platform announces its £3.5m seed funding round.
Banking’s old guard turns to tech
Lending Works was launched by Nick Harding and Mathew Powell [pictured above] back in January 2013 and offers their lenders protection against borrower defaults, fraud and cybercrime.
They claim this triple lock of security is an industry first which offers confidence for lenders on the platform.
David Kyte led today’s investment. Kyte is a city trader who’s been credited for his role in making electronic trading mainstream.
Commenting on the investment David Kyte said:
Innovative technology is underpinning this personal finance revolution, just as it did in financial markets trading two decades years ago
Rise of peer-to-peer lending
The peer-to-peer lending industry has been growing rapidly as an alternative to traditional bank loans. Despite this, the industry currently represents just 1% of Britain’s personal loan market which is estimated to be worth £25 billion.
Fintech worth £1bn?
Today’s news in the latest is a series of fintech investments announced in London.
Last week we reported on GoCardless’ $7m series B funding, with the direct debit payments startup reporting 700% growth in the past 12 months and the Open Data Institute now forecasts the sector could be worth £1bn by 2016.
Andy Haldane, executive director of financial stability at the Bank of England also believes the peer-to-peer finance market could have the potential to drastically change the face of banking, he recently told the Financial Times:
At present, these companies [P2P lending companies] are tiny…But so, a decade and a half ago, was Google