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P2P Loan Startups Raised 15 Billion In 2014, Headed For More In 2015

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With two lending startups, Lending Club and OnDeck Capital, both going public last year, it seems kind of obvious that the space is starting to mature.

Another sign is how much funding the category was able to rise in 2014. So much, in fact, that it was the most ever for the space, according to data out from CB Insights.

In all, over $1.5 billion raised in equity financings across 48 deals last year, the most ever for the lending space, up from just $382 million in 25 deals in all of 2013. Every quarter of 2014 had a least 10 deals and over $300 million raised.

Even better for the space is how well it is already doing so far this year. In the first quarter of 2012 there has already been $389 million raised across 18 deals, though it should be noted that Social Finance raised $200 million of that in February, valuing it at a $1.3 billion.
As some of the older lending companies begin to mature, and to exit, there seems to be a new crop of companies springing up. In fact, there were 24 companies in this space that raised their first funding in 2014.

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Editor’s Notes:

♦  When it comes to "fintech", VatorNews is mainly focused on the "tech" part of the equation, because of that, the article eventually veers off into tech investment comparisons with other companies in other spaces not directly related to the finance industry. The comparisons with the health and on-demand mobile space were interesting, but the main points of interest for those in the world of peer-to-peer lending is the expansive growth in funding that happened in 2014 in comparison to the funding that preceded it in 2013. The growth and difference is staggering.

♦  Even more exciting news is that we are sure to see similar stories at the end of 2015, funding for p2p lending platforms has not slowed down one bit. Major banks are investing in p2p lending and deals between peer-to-peer lending platforms are happening nearly every month of 2015 in one form or another.

♦  The article also highlighted how huge p2p lending is becoming in China, the funding in that country is exploding as well. It seems that the best peer to peer lending companies are reaping the benefits of creating a new investment and financing avenue for normal folks and business lending. New companies are joining the fray everyday, it will be interesting to see how huge peer-to-peer lending becomes and what eventual impact it will have in the loan and finance sector. Not only in the U.S. and U.K., but globally.

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