Business Startups Venture

Utah’s Lendio, An Online Marketplace For Small Business Loans, Secures $55M

Lendio, a Lehi, Utah-based free online marketplace for small business loans, has secured $55 million in capital. That includes $31 million in equity led by Mercato Partners’ Traverse Fund and a $24 million debt facility from Signature Bank.

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According to the company, the equity round was oversubscribed by existing investors including Napier Park Financial Partners, Comcast Ventures, Blumberg Capital, Stereo Capital and Runa Capital. It brings Lendio’s total raised since it was founded in 2011 to $108.5 million. The company’s last funding was a $19 million Series D, raised at a pre-money valuation of $75 million in October 2016, according to Cruchbase data.

Lendio plans to use the new capital “to increase the scope and precision” of its loan marketplace while expanding new bookkeeping and lender services functions.

The startup has 75 loan products on tap and describes itself as a one-stop-shop for business owners looking for capital to start, operate and grow. Lendio has facilitated more than 100,000 loans to nearly 35,000 business owners across the U.S. to date, totaling over $2 billion. It says its year-over-year growth rate has averaged 75 percent over the past two years. The company has more than doubled its customer base in the last two years, according to CEO and co-founder Brock Blake.

It’s also nearly doubled its headcount from 170 people about one year ago to just over 300 today.

Lendio reduced its monthly burn rate to break-even since taking on the Series D round of funding in 2016, according to Blake.

“While the company was in a position of profitability and didn’t need to raise funds, this Series E round will allow Lendio to grow several recently-launched business units,” he wrote via email.

What it does

The company says it wants to make it easy for small business owners to get loans. Owners can complete a 15-minute online loan application that is processed by Lendio’s machine-learning algorithms and matched with” a pool of suitable lenders.”

Lendio’s loan team reviews those options with the business owners and then works to facilitate the loans, often within 24 hours, it claims.

The company has strategic partnerships with the likes of American Express, Heartland Payment Systems, PayPal, LendingClub, Kabbage, NerdWallet, Comcast Business, Staples and Funding Circle.

For Mercato Partners’ Senior Investor Ryan Sanders, Lendio’s “ability to combine data analytics with the human touch to connect small businesses quickly and precisely with ideal lending partners has made all the difference in its success.”

The new capital will be used in part to expand the company’s online bookkeeping platform and further integrate it with its loan marketplace platform, Sunrise by Lendio. It also plans to enhance its lender services division. The company gives banks, credit unions and other online lenders access to its white-labeled online application via a software-as-a-service partnership model.

Meanwhile, lenders are now outsourcing the customer-facing sales function to Lendio, the company said.

The company also has a social component (which I always love). For every new loan facilitated on Lendio’s marketplace platform, Lendio Gives–an employee contribution and employer matching program–provides a microloan to a low-income entrepreneur around the world through Kiva.org.

Blake said Utah was an obvious choice to start a fintech company.

“From a regulatory standpoint, Utah is very business friendly, the cost of living is affordable, and there’s a deep talent pool to draw from,” he said. Plus, he appreciated “the strong VC community and the entrepreneurial culture pervasive across the state.”

Illustration: Li-Anne Dias

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