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Online lender draws QED, Blackstone in 119m pounds fundraising

Monday, March 14, 2016 - 08:38

[SEATTLE] Future Finance Loan Corp, a two-year-old startup that lends to students online, raised 119 million pounds (S$235 million) from firms including QED Investors, and Blackstone Group LP to expand its business and fund new loans.

The fundraising includes 100 million pounds for loans, supplementing an existing facility from Goldman Sachs Group Inc, according to a statement from the Dublin-based company. Investors in its equity include QED, Blackstone Strategic Opportunity Fund and other money managers focusing on startups, private-equity holdings, credit investments and consumer-lending operations.

A growing number of online ventures are muscling into financial services, increasingly drawing backing from banks and institutional investors - both for the platforms themselves and the debt they create. While many websites focus on consolidating credit-card balances or lending to small businesses, there are platforms financing elective medical procedures, used boats or even the opening of a restaurant franchise.

Future Finance has drawn more than 37,000 applications - amounting to about 1.5 per cent of the UK's student population - since it opened in May 2014, and it has loaned out about 25 million pounds so far, according to the statement. A page on its website lists interest rates as high as 15 per cent for some undergraduate loans, though they are lower for more advanced degrees and typically decline after graduation.

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The injection "will enable many more students in the UK to access higher education and invest in their future careers," chief executive officer Brian Norton said in the statement. The company recently began lending in Germany as it expands in Europe, it said.

QED Investors, a venture-capital firm led by Capital One Financial Corp co-founder Nigel Morris, has invested in Prosper Marketplace Inc, Social Finance Inc and more than a dozen other lending platforms.

QED sees "enormous potential for the business in what is still a nascent market for student finance in the UK," Mr Morris said of Future Finance in the statement.

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