Business lender MarketFinance is gearing up to provide loans to UK businesses as they recover and grow post-pandemic through the government’s Recovery Loan Scheme (RLS), after raising £280m debt and equity in its latest fundraising round.
The British fintech, which hit profitability in March, was one of the first fintechs after Funding Circle to be accredited under the Coronavirus Business Interruption Loan Scheme (CBILS) and lent companies across the UK a total of £250m during the pandemic.
“Fintech was born out of the financial crash in 2008. And now in this crisis, we’ve played an important role in the recovery and helped the Treasury channel money into the places where it was needed most,” CEO Anil Stocker told City AM.
Going forward, MarketFinance will support access to finance for UK companies that can afford to take out additional funds to grow post-pandemic through the British Business Bank’s RLS scheme with loans of between £50k and £250k, repayable over four to six years.
When it comes to balancing the risk profiles of companies post-pandemic, MarketFinance is focused on the sectors it predicts will boom.
“Anything that’s digital or is pivoting more to digital is very exciting for us, but there are also some sectors for whom Covid was just a little bump on the road and will continue to grow,” Stocker said.
An unnamed global investment firm led the debt financing, alongside Italian bank Intesa Sanpaolo, and Black River Ventures led the fintech’s latest equity round, with participation from its existing investor Barclays Bank.
After businesses weathered the pandemic with the help of the CBILS scheme, Stocker said the £280m fundraising round for lending to British businesses signals investors’ growing confidence in the UK’s recovery as growth forecasts are revised up.
“You just need to walk around to see that London is back to life,” Stocker said. “The UK being ahead of the curve on vaccinations and opening up sooner than other places has meant that we’re seeing some industries really swing back into into growth again.”
“So it’s a good time to be lending. At the beginning of a new cycle – what we hope is going to be an upwards cycle now with things getting back on track.”
After the CBILS scheme significantly increased MarketFinance’s lending volumes and it hit profitability in March, the company said it is on course to hit £30m revenue in 2021.