Avant is the latest marketplace lending platform to raise substantial equity from an array of leading investors.
Avant announced this week that it has closed a $325 million Series E equity finance round led by global growth equity firm General Atlantic, with participation from J.P. Morgan, Balyasny Asset Management and existing investors Tiger Global Management and August Capital.
Avant is one of the fastest growing marketplace lending platforms and through the use of technology has transformed the personal loan process into a streamlined consumer-friendly experience.
The platform uses advanced machine-learning algorithms and big data to provide consumers with secure personal loan products and with operations in the UK, US and Canada, Avant claims to have served over 310,000 customers by the end of 2015 and expects over £2 billion in loans to have been originated through their technology platform.
This newest round of funding brings Avant’s total equity raised to over $650 million and according to reports, in the next phase of the company’s growth, will expand its suite of financial products and launch in new geographic regions.
“Avant is serving unmet demand on a global scale and providing millions of consumers with access to responsible credit in a clear and timely manner. We are proud of Avant’s tremendous growth over the last three years and continue to believe in the power of technology to innovate and improve the customer experience,” said Al Goldstein, Chief Executive Officer of Avant. “Our partnership with a leading growth equity firm like General Atlantic signifies our commitment to building a premier technology brand. We look forward to the continued growth of our core consumer loan product, as well as the successful launch of additional financial products and services to support our customers.”
Avant’s large funding round follows similar investments made this year into other marketplace lenders. Softbank’s $1 billion investment into US alternative finance start-up SoFi, which provides student loan refinancing, mortgages and other types of loans, earlier this month has been the biggest so far this year. However, UK Peer-to-Peer (P2P) lender Funding Circle also acquired German marketplace lender Zencap, which has operations in Germany, Spain and the Netherlands a few weeks ago.
Marketplace lending is one of the fastest growing areas in fintech, with successful companies such as Lending Club and On Deck in the US and RateSetter and Funding Circle in the UK, enabling businesses and individuals to secure loans directly from investors online, rather than having to going through banks.
Morgan Stanley has predicted that marketplace lending will reach $290 billion by 2020, a figure which indicates a 51 per cent growth rate per year. The rise in the popularity of marketplace lending has also caught the attention of the FCA chairman John Griffith-Jones who recently expressed his concerns about it because he belives it is starting to look like banking, and Conservative MP Chris Philp said it is likely to be “the next big scandal”, the FT reports.