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Iwoca secures £270M debt funding to support SME lending

Iwoca secures £270 million from Citibank and Barclays, boosting its mission to support SMEs with swift, flexible loans, as traditional banks retreat from SME funding.

  • Editorial Team
  • May 10, 2024
  • 2 minutes

In a significant move for the fintech sector, Iwoca has secured a substantial £270 million debt funding package, marking a new chapter in its mission to support small and medium-sized enterprises (SMEs).

With this strategic infusion of capital from banking giants Citibank and Barclays, Iwoca’s commitment to reshaping the SME lending landscape has been emphatically underscored, propelling its total investment beyond the £1 billion mark and setting the stage for an unprecedented expansion of services to businesses in dire need of innovative financial solutions.

The funding package comprises two major commitments: £150 million from Citibank and Insight Investment aimed at bolstering Iwoca’s growth in Germany, and an additional £120 million from Barclays and Vrde to fortify its UK operations. This strategic investment arrives at a time when Iwoca is experiencing a surge in demand for its flexible financing solutions from SMEs.

Christoph Rieche, Iwoca’s CEO and co-founder, sheds light on the significance of this funding. “This investment will enable us to keep up with the high demand from small businesses for our Flexi-Loan product,” he explains. Rieche emphasises the company’s edge over traditional banks, citing rapid lending decisions and flexible terms as key differentiators. Iwoca’s technology-driven approach has processed over 130,000 loans, leveraging data to extend credit to businesses often overlooked by conventional banks.

Iwoca’s funding success is set against a backdrop of high street banks retreating from SME funding. Research data reveals a stark reduction in traditional bank funding for SMEs, with a corresponding increase in demand for alternative finance. The British Business Bank’s annual report corroborates this shift, highlighting the growing market share of specialist and challenger lenders.