LendInvest: Future Unicorn reveals the plan to become a $1bn company with P2P
9 min read
21 March 2016
Winner of the Future Unicorn Award at our Everline Future 50 2016, peer-to-peer lending platform LendInvest has been given a mammoth challenge, but CEO Christian Faes has told Real Business he’s confident the firm can become a $1bn company – by trotting, not galloping.
The most disruptive businesses in Britain were revealed on 3 March at our Everline Future 50 2016 event, which this year took place in London’s Bankside Vaults.
Six of the 50 businesses secured special accolades to highlight particularly standout innovations, and LendInvest, a P2P platform specialising in mortgages, secured the Future Unicorn Award on the big night by demonstrating great potential for future profits.
The company initially opened for business as an offline mortgage lender in 2008 and the founding team was always on the lookout for diverse opportunities for lending capital.
Speaking with Real Business, co-founder and CEO Christian Faes recalled the wake-up to digital when he noticed “success from the likes of Funding Circle, and also Lending Club in the US”.
He noted that the UK government is eager to support the P2P industry – we’ve seen London councils adopt the finance method for small firms – and said they didn’t notice anyone using it for property, thus set out to take the offline experience online and effectively entering the increasingly busy proptech market.
Commenting on the user base, Faes explained: “From the investor side, there’s a whole range of small investors who can get involved for as low as £100 right up to large banks buying loans.
“As a marketplace we’re two-sided and the borrowers we’re targeting at the moment are property entrepreneurs, who are pretty active in buying and selling often, with multiple transactions and capital returns quite quickly.”
Fresh from its victory at the Everline Future 50, which we’ll discuss later, LendInvest raised £17m from Atomico – a tech venture capital firm launched by Skype co-founder Niklas Zennström.
“We’ve been working on it for a while but it feels good to get it completed and announced, so we’re really excited,” said Faes.
“We had GP Bullhound look at opportunities including a Series B raise and met with range of investors. We’ve always been fairly VC-shy, but we met Atomico and found a really good chemistry with the partners and the way they operate.”
The capital will support a thorough expansion of the technology supporting the service and the team building the technology. It will see the firm’s first senior VP of engineering brought on board, while the existing 20 person-strong tech team will be “aggressively” built out, bolstering the existing 90 members of staff in the company overall.
On the topic of the requirements of staff in such an operation, Faes said: “That’s an interesting question. We try and get some level of domain experience from finance or from property. It’s relatively important, but not for everyone we hire. We’re conscious we don’t want a business full of ex-bankers, but people who are familiar with the finance market and reinventing finance.”
Given that National Apprenticeship Week came to a close on 18 March, Faes added that the company is keen to recognise youngsters with a formal graduate programme in place, having seen how successful they have been for other businesses.
It seems that LendInvest is following a certain P2P pattern when it comes to investments. Funding Circle achieved two significant investments in just nine months and LendInvest’s Atomico round comes after it already sealed £22m back in June 2015.
— LendInvest (@LendInvest) March 7, 2016
Detailing why there was such a quick demand for more capital, Faes detailed: “We have significant momentum as a business and as the player to change the mortgage market, so we want to capitalise on the position and really go for it.”
The deal with Atomico will see partner Mattias Ljungman join the LendInvest board. Faes expects a “positive impact” on the dynamics of the business, given that Ljungman has significant experience of fast-growth tech companies, having worked with the likes of Clash of Clans developer Supercell and taxi app Hailo.
Read more on P2P developments:
- Challenger bank director Lord Turner: P2P losses will make bankers look like lending geniuses
- P2P finance exploded in 2015 as loans from Lending Works grew fourfold
- Why Zopa’s CEO believes fintech trailblazers aren’t there to “kill the banks”
Things aren’t all seamless though as Faes said, like any company, there are challenges. Operating in the P2P sector means competing for the same pool of investors, though evidently for LendInvest, that doesn’t appear to be a problem.
Finding good people also keeps the team busy, and while it gets easier as the firm grows, the challenge is being mindful to be competitive to bring staff in.
Prior to securing the investment of London-headquartered Atomico, LendInvest’s £22m round came from a Chinese investor Beijing Kunlun.
Faes said the benefits of an Asian investor aren’t immediately obvious to some at first, but added: “They’re an active tech investor across a range of companies including Grindr. They’ve invested in P2P in the US, but they’re also very active in P2P in China.
“That makes them very knowledgeable and they have a global view, so they’re very tapped into what’s happening across the world.”
The company’s founder Yahui Zhou joined the board during the deal and Faes said he’s young and helpful, which makes sounding ideas off of him great. While the opportunity to scale is within its reach thanks to investment partners, Faes is mindful that the UK is the geography to execute on first.
Having won the Future Unicorn Award at the Everline Future 50, Faes admitted it’s a big expectation but one the firm will grab with both hands.
“We’re very happy to receive the award and we think to be included in the Future 50 was a big accolade. I think for us, we often say that one of our keys is we weren’t an overnight success – in recent years we’ve got a huge profile, but in early years we had to grind it out and do the hard yards. That sets a good foundation to take things forward,” he said.
“Becoming a unicorn is a big expectation, but the mortgage market is huge and entirely offline – it’s a very backwards industry and we’re well placed to be substantial business in the future, while we have fairly significant backing. I think we’re taking a long view; the opportunity is real but we don’t need to do it next week. We want to disrupt the market for many years to come.”
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