TechCrunch-Funding Circle, a Kickstarter for SMBs, Picks Up $16M From Index, Union Square Ventures

TechCrunch ? Some great news for small business owners, and perhaps a sign of more crowdsourced funding coming to the U.S. soon: the UK startup Funding Circle ? a Kickstarter for small businesses ? has just announced that it has raised a $16 million round of funding to further build up its business of enabling non-bank lending to small businesses. ~ The investment included participation from existing investor Index Ventures as well as new investor Union Square Ventures ? a sign of how Funding Circle may have its sights set on taking advantage of new crowdfunding laws to expand to the U.S. This Series B round takes the total raised by Funding Circle to $21 million. ~ Funding Circle has made some amazing strides since launching in the UK 18 months ago: it?s facilitated lending to 670 ...More small businesses in the UK, with funds totaling ?28 million ($45 million), representing annual growth of over 400 percent. More than 10,000 people have registered on the site to date; the company claims ?inflation-beating average yields of 8.4 percent? for investors. ~ Funding Circle says it lets businesses pick up to ?1 million ($1.6 million) per week through its site. ~ The startup is a sign of the times not only in its crowdsourced, P2P roots, but also in the fact that it is aimed at bypassing banks, the subject of so much? criticism for their practices over the last several years ? the thinking goes: why give them the benefit of making money off of lending when you can find others to do that instead? ~ And there is something decidedly more efficient-sounding about Funding Circle compared to banks: whereas it can take months to finalize a bank loan and get the money flowing, Funding Circle claims that a deal can be secured and funded through its site within days. ~ There is also a big opportunity there to take some business away from the banks:? Funding Circle notes that currently some 90 percent of small business lending in the UK still goes through the traditional bank channel. ~ The impetus behind F... ...Less

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