Small business lending challenger Iwoca is planning to close its next funding round within weeks, as the first stage of investment is revealed.
London-listed fund Augmentum Fintech has plugged £7.5m into the round, which City A.M. understands to be part of a much larger series D raise to be announced in early February.
A representative for Iwoca declined to confirm the final amount, but said the upcoming round would be "much more significant" than Iwoca's previous raises.
The fintech firm, which offers credit facilities to small businesses across the UK, has raised just under £50m in equity funding to date. Its existing investors include Etsy-backer Acton Capital Partners, the venture arm of Commerzbank, and Prime Ventures among others.
Launched in 2012, Iwoca now employs a team of 70 staff at its headquarters in central London. It has funded more than 25,000 small and medium-sized businesses (also known as SMEs) across the UK, Germany and Poland.
The news comes after Augmentum also closed an investment into probate startup Farewill earlier this week, injecting £4m into a £7.5m round alongside the venture arms of Daily Mail-owner DMGT and M&C Saatchi.
City A.M. understands that today's funding from Augmentum is the fintech fund's largest one-off investment since it went public in March last year.
Chief executive Tim Levene said of the investment: "Whilst there are many companies attempting to address SME lending, few have a credit product as advanced as Iwoca.
"We believe their industry-leading analytics and technology set them apart from other lenders and give them a competitive advantage others will find hard to replicate. We are confident that Iwoca will emerge as one of the winners in the SME space."