Fintech investor Gustav Andersson leads equity round in leading Spanish business lending marketplace, also committing €2 million of lending capital support to LoanBook’s marketplace

October 20, 2015– LoanBook Capital announces the completion of a €1.1 million equity investment round, bringing the company’s total equity funding since its launch in 2013 to €2.7 million. European fintech investor Gustav Andersson leads the round, alongside new and existing investors, in what represents the largest equity investment in a Spanish business lending marketplace to date.

Andersson will also invest an additional €2 million of lending capital through LoanBook’s marketplace, which focuses on the provision of working capital loans and other types of working capital finance to Spanish SMEs. He will also be joining the company's board of directors.

The equity capital raised will be invested primarily in the development of new channels to market and operational and technology development, to support rapid growth in 2016.

Gustav Andersson has invested in a range of fintech projects throughout Europe and currently has equity or lending capital investments in 3 platforms.

Andersson says, “The next phase of growth in Spanish P2P lending platforms will be driven largely by sophisticated investors and LoanBook’s institutional-quality team is uniquely positioned to benefit from this trend. I am looking forward to working with LoanBook in this exciting phase of expansion.”

LoanBook CEO James Buckland comments, “We are delighted to complete this equity round and to be supported by an investor with Gustav’s expertise and entrepreneurial spirit. During the last two years, we have made a significant investment in our team and operational capability and have developed a strong track record and market presence. The P2P lending model has also gained recognition and traction in Spain, in large part through the introduction of favourable regulation. We believe that 2016 will see the P2P lending sector in Spain begin to achieve the growth rates seen in other major markets. With this equity round, we are well-positioned to take advantage of this exciting market opportunity. ”

LoanBook has had a strong 2015 and has funded nearly €5 million of loans since launch, with over 100% growth in monthly credit origination during the last six months. Buckland says, “We plan to become the largest business lending marketplace in Spain, catering for investors of all types, both in Spain and overseas, and at the same time providing small businesses in Spain with a much-needed alternative to bank financing.”

According to recent research by Cambridge University and EY, peer-to-peer business lending in Europe reached €93.1 million in 2014 (excluding the UK), a 272% increase on the previous year. LoanBook estimates that P2P business lending in Spain grew at an annualised rate of approximately 250% between 2013 and 2014.

Johnathan Ransom, Managing Director, Investment Management & Operations, is the focus of this months interview, representing LoanBook's management team.

1.  What is your role in LoanBook?

My title is Managing Director, Investment Management & Operations which means that I am primarily responsible for developing and overseeing business processes, systems and controls. In practice, we have a very capable team with a huge amount of experience, which means that I can focus my attention on those areas that we need to improve. I have a background in operational performance improvement at the consultancy firm, Ernst & Young, so we like to do things right.

My next big task is to prepare LoanBook for the regulatory changes that we are soon to be subject to; a development that is very exciting for our industry and that we are fully embracing, having been closely involved in its development.

2. What goes through the mind of an Englishman to start a project in Spain?

I am very fond of Spain as a place to both live and work. I think that there is a huge opportunity for us to help improve the efficiency and effectiveness of the financial markets in Spain. LoanBook’s crowdlending, or peer-to-peer, model is one that is being used to great success in the UK and US and there is every reason to expect it to be as beneficial to businesses and investors here.  

3. What did you learned during your tenure in large firms such as Ernst & Young, Invesco and GPT Halverton that can be applied in such an innovative project as a crowdlending platform?

At Ernst & Young I learnt how important it is for businesses to provide a service that their clients want, at Invesco the importance of getting the right balance between risk and return and at GPT Halverton the benefits of openness and transparency. We try to apply each of those principles to LoanBook’s products and services.  

4. Is alternative financing a passing trend?

If economies are starved of alternative sources of finance then they will be much less efficient for it. I believe that borrowers and investors should have a choice of products and services and should not be limited by those that are offered by banks, which has traditionally been the case, to a large degree, in Spain. So, provided Spain continues to work towards developing competitive markets (a core objective of the European Union in its desire to develop and sustain an internal market where competition is free and undistorted) I think that ‘alternative finance’ is here to stay.

Now, alternative finance can take many forms. But I truly believe that the principles that we adopt as part of the peer-to-peer finance model will make our sector sustainable, as those principles of fairness, transparency and trust are ones that should stand the test of time.

5. How would you describe crowdlending in 140 characters?

Crowdlending is the financing of businesses, individuals or projects from multiple sources of capital. The crowd element refers to multiple sources pooling resources and sharing risk. The lending element refers to the fact that those resources are put to work in the form of a loan, on which interest is paid, thus generating a return for the ‘crowd’, and helping the borrowing business grow in the process!

6. In your opinion, what are LoanBook’s key characteristics?

LoanBook is made up of a group of individuals, each with a lot of experience in the traditional world of finance, fixed-income investment, technology and customer service, who are striving to play a part in restoring trust in financial markets by helping to empower investors and borrowers alike. We are characterised by our desire to make a sustainable change for the better and our commitment to do it in the best interests of our customers.

7. What are the main advantages of crowdlending over traditional banking?

I mention some of the benefits previously. Others include:

• Commission transparency: our revenues are based on a simple, transparent fee linked to the service we provide. We do not make profit by putting client’s funds at risk by utilising them for creative financial purposes.
• Disintermediation: crowdlending puts the end user of capital together with the source of capital, which means that the lender is empowered to make their own decision based on their own investment goals, rather than paying someone else to do it for them.
• The marketplace model, where investors can influence the interest rate on the loan, is efficient and transparent, removing conflicts of interests that often occur when a third party is in control of other people’s capital and the decision to lend.  

8. What are your hobbies? Do you have any recent recommendations?

As an Englishman in Spain I am still obsessed with sitting in the sun, particularly at this time of year when it is wet and cold at home – I am making up for years of sun deprivation! But it’s not really a hobby, so combine sun with skis and fresh snow and you have my recommendation!