Snapshot for week beginning 11 April. Europe’s fintech startups have continued raising vast amounts of capital over the lockdown period. One sub-sector that has particularly benefited from the funding wave is online lending.
Case in point, Auxmoney, a European digital lending platform for consumer credit, has continued to rake in funds from big name investors eager to get in on the lucrative digital lending business.
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By GlobalDataAuxmoney is an online peer-to-peer loan marketplace founded in 2007. Its lending platform allows individual consumers to borrow personal loans from individual investors.
During the week, US Citigroup and Luxembourg-based asset manager Chenavari ploughed €250m into the Germany-based fintech.
Last November, Auxmoney entered into a partnership with the France-based bank BNP Paribas in 2020, with whose help Auxmoney plans to invest up to €500m in digital loans.
This came as Centerbridge became the new majority shareholder of Auxmoney after leading a €150m (£133m) equity fundraising round in September.
Auxmoney Raised Over $ 3bn in 11 rounds, four of which are debt lending. In 2017, it received a $ 1.5bn injection from AEGON, a major investor.
Existing venture capital backers including Foundation Capital, Index Ventures and Union Square Ventures, remain fully invested.
Deal of the week: Auxmoney raises €250m to fund consumer loans
Auxmoney has received €250m in investment from Citigroup and Chenavari Investment Managers.
The investment, along with its own funds, will support loans on its own marketplace. Germany-headquartered Auxmoney enables consumers to secure finance from private individuals.
Its peer-to-peer lending platform provides automated processes for onboarding, risk assessment and investor reporting, and draws on advances in machine learning to match borrowers and lenders.
Raffael Johnen, chief executive officer of Auxmoney, commented:
“Our investment platform enables us to start new partnerships in a scalable manner and thus continuously expand our investor base. We are pleased to bring more strong partners to the Auxmoney platform today. With this trend-setting investment, even more people benefit from the advantages of digital loans through Auxmoney.”
Daniel Drummer, chief financial officer at Auxmoney, said:
“This financing commitment from a leading global debt investor underlines once again the attractiveness of digital loans as an asset class. The investment strengthens Auxmoney’s position as a leading provider of digital access to credit in Europe. We see enormous momentum for technology-based loan offers in the market. Further new partnerships are already in preparation.”
Sebastian Walf, managing director at Citigroup, added:
“We finance fintechs across Europe. The credit performance of Auxmoney’s marketplace loans continues to be remarkably stable even in the corona pandemic. We are pleased to enter into this partnership with one of the leading European fintechs.”
Disruptive newcomers upend an old game
The fintech ecosystem is loaded with disruptive companies, though perhaps none more so than those in the lending sector.
Employing artificial intelligence, big data and even blockchain, financial institutions — both new and old — are using technology to solve longstanding issues.
The mortgage industry, for example, is an industry that can greatly benefit from new lending technology.
Haunted by the mistakes of their predecessors during the 2008 financial crisis, a new breed of fintech-powered mortgage companies are executing responsible and transparent loan agreements at scale — in effect, personalised loans that are vastly different than the one-size-fits-all breed that proved so problematic a decade ago.
The fintech investment boom is likely to continue. investors seem confident that long-term macro trends (including accelerated digital adoption) will broadly favour the sector.
