P2P lending platform PeopleFund raises $20M Series C extension led by Bain Capital • TechCrunch
PeopleFund, a South Korean marketplace that connects borrowers and investors to enable loans, recently added $20 million to its $63.4 million Series C.
Existing backer Bain Capital led the expansion, with participation from previous investors including Access Ventures, CLSA Capital Partners Lending Ark Asia, D3 Jubilee Partners, 500 Global, Kakao Investment, TBT Partners and IBX Partners.
The additional funding brings PeopleFund’s total raised to approximately $100 million in equity. Besides capital, PeopleFund also secured $240 million in debt financing in 2022 from Goldman Sachs, CLSA Lending Ark Asia, and Bain Capital. The company did not disclose its valuation when asked.
In 2021, PeopleFund raised $63.4 million (75.9 billion won) in Series C equity, also led by Bain Capital, to further develop its credit rating system.
PeopleFund plans to use its new capital to continue advancing its AI-based risk management and credit scoring system for its users, which include borrowers and lenders. In addition to that, the startup aims to launch a B2B service this year to provide financial institutions with personalized AI-enabled credit scoring system services.
Another reason for its track extension is to meet one of the requirements for a P2P lending license, according to industry sources. In South Korea, P2P lending markets must meet annual requirements to obtain a license from the Financial Services Commission (FSC) to run their business. To operate its business in 2023, PeopleFund, which says it is making a profit loss, must hold minimum capital ranging from $400,000 to $2.4 million, depending on its loan balance. (Loan balance is the remaining amount of loans made by PeopleFund that borrowers have not yet repaid.) PeopleFund’s loan balance was $264.3 million (326.8 billion won) as of December 2022 , the company said. This means that the capital required by the company is around $1.5-2.4 million, according to industry sources and local media.
Joey Kim, Founder of PeopleFund, said in a statement that “2022 will be marked as a turbulent year for fintech, with the global public market adjusting alongside changes in the macro environment. Meanwhile, the Korean market consumer lending has seen a dramatic transition to the mobile sphere, with big players like KakaoPay and Toss leading the change.This transition, coupled with the instability in the credit market, is opening up opportunities for mobile-based digital lenders. technology and its technologies to highlight our competence over traditional financial institutions.
The outfit says its total amount of loans deployed to borrowers to date was estimated at $1.3 billion in December, up from $936 billion in October 2021. The startup claims to have seen growth of more than 56.7 % in the number of borrowers and 9.6% in the number of lenders compared to the previous year. The number of its borrowers and lenders was 20,688 and 2,943,883, respectively, in December last year.
The Seoul-based P2P lending startup, founded in 2015, has successfully completed its expansion. Still, the impact of extremely difficult market conditions was inevitable, resulting in several layoffs across the tech industry in recent months. PeopleFund confirmed that it cut approximately 10% of its workforce in the fourth quarter of 2022 to “operate the business effectively and efficiently” in the run-up to a deteriorating economy. PeopleFund had nearly 150 people in December 2021.
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