Utah’s Lendio, an online marketplace for small business loans, gets $55 million

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Lendio, a free online marketplace for small business loans based in Lehi, Utah, has secured $55 million in capital. This includes $31 million in equity led by Mercato Partners’ Traverse fund and a $24 million credit facility from Signature Bank.

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According to the company, the round was oversubscribed by existing investors, including Napier Park Financial Partners, Comcast Ventures, Blumberg Capital, Stereo Capital and Runa Capital. This brings the total raised by Lendio since its inception in 2011 to $108.5 million. The company’s last funding round was a $19 million Series D round, raised at a pre-money valuation of $75 million in October 2016, according to data from Cruchbase.

Lendio plans to use the new capital “to increase the reach and accuracy” of its lending market while developing new accounting and lender services functions.

The startup offers 75 loan products and describes itself as a one-stop-shop for business owners looking for capital to start, operate and grow. Lendio has facilitated over 100,000 loans to nearly 35,000 business owners across the United States to date, totaling over $2 billion. It says its year-over-year growth rate has averaged 75% over the past two years. The company has more than doubled its customer base in the past two years, according to CEO and co-founder Brock Blake.

It has also nearly doubled its workforce, from 170 about a year ago to just over 300 today.

Lendio has reduced its breakeven monthly consumption rate since it entered the Series D funding round in 2016, according to Blake.

“While the company was in a profitable position and had no need to raise funds, this Series E round will allow Lendio to grow several recently launched business units,” he wrote via email.

What he does

The company says it wants to make it easier for small business owners to get loans. Homeowners can complete a 15-minute online loan application which is processed by Lendio’s machine learning algorithms and matched with “a group of suitable lenders”.

Lendio’s lending team reviews these options with business owners, then works to facilitate loans, often within 24 hours, she says.

The company has strategic partnerships with companies like American Express, Heartland Payment Systems, PayPal, LendingClub, Kabbage, NerdWallet, Comcast Business, Staples and Funding Circle.

For Mercato Partners lead investor Ryan Sanders, “Lendio’s ability to combine data analytics with the human touch to quickly and accurately connect small businesses with ideal lending partners has made all the difference in its success. “.

The new capital will be used in part to develop the company’s online accounting platform and further integrate it with its lending marketplace platform, Sunrise by Lendio. It also plans to improve its lender services division. The company gives banks, credit unions and other online lenders access to its white-label online application through a software-as-a-service partnership model.

Meanwhile, lenders are now outsourcing the customer-facing sales function to Lendio, the company said.

The business also has a social component (which I still love). For every new loan facilitated on Lendio’s marketplace platform, Lendio Gives – an employee contribution and employer matching program – provides a microloan to a low-income entrepreneur around the world through Kiva.org.

Blake said Utah was an obvious choice to start a fintech business.

“From a regulatory standpoint, Utah is very business-friendly, the cost of living is affordable, and there is a large pool of talent to tap into,” he said. Additionally, he appreciated “the strong venture capital community and pervasive entrepreneurial culture throughout the state.”

Illustration: Li-Anne Dias

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