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Funding Circle acquires Zencap to expand P2P lending to SMEs across Europe

3 min read

20 October 2015

Former deputy editor

London-based firm Funding Circle had already gone beyond its British roots with a US expansion, but the P2P business lender has now expanded across additional countries in Europe, which has been achieved with the acquisition of German counterpart Zencap.

The fintech company has had a huge year, having most notably been charged up by a $150m funding round in April – one of the largest VC investments in British history – just nine months after securing a $65m injection in 2014.

Real Business spoke to Funding Circle CEO Samir Desai in May, at which time he said the firm would build on operations in the UK and US, but was tightlipped on the specifics.

“We have visited many countries in the world and very few, if any, have a well functioning small business lending sector,” he said.

“We cannot disclose at this time where we will go next. Small businesses are under-served across the world, which is why we believe the Funding Circle marketplace model can be global.”

However, Funding Circle has now revealed it has pushed across Europe – specifically into Germany, Spain and the Netherlands. It’s been achieved with the acquisition of German counterpart Zencap, which was already operational in the aforementioned markets.

In conjunction with the expansion the firm has released latest lending figures, which show that more than $1.5bn has been lent to 12,000 companies across the UK and US.

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That’s set to grow further with access to new territories as Zencap has now been rebranded under the Funding Circle name, though its founders Matthias Knecht and Christian Grobe will continue to lead. The German business has lent over €35m to 520 firms since launching 18 months ago.

“Our vision is to help millions of businesses across the world sidestep the outdated and inefficient banking system and borrow from investors. Today’s news is the next exciting stage of this journey,” Desai said of the deal.

“We have been hugely impressed with what the Zencap team have achieved so far. By coming together we combine Funding Circle’s leading position in the UK and US with Zencap’s deep understanding of local markets to create the first truly global marketplace lending platform.”

Funding Circle's CEO on raising $65m and $150m from VCs in just nine months

Grobe has also been named the COO of Funding Circle in Continental Europe. He noted that the two firms have “one common mission to create a better financial world.” The growth of Zencap attracted the attention of Victory Park Capital, which agreed to lend €230m through the P2P marketplace.