Peer-to-peer lending platform Prêt d’Union has raised €31 Million from Eurazeo and Priceminister co-founder & business angel Pierre Kosciusko-Morizet. The platform has now provided €200 Million in loans since its launch in Dec. 2011 at a rate of €15 million per month (up from €5 Million per month in September 2013) – not as much growth as one might expect, given the size of the fundraising, but the model set by Lending Club certainly paves the way for Prêt d’Union’s growth modeling.
Lending Club paved the road for P2P Lending, showing that, in the general crowdfunding market, the market size of “crowdfunding for loans” outweighs enormously the more well known “crowdfunding for rewards,” set by players like Kickstarter & Indiegogo. Founded in 2007, Lending Club rose quickly to become the largest P2P lending platform in the United States – their IPO at the end of last year valued the company at $8 Billion
P2P lending is eating away at the banking industry’s main sources of revenue – traditional loans for small businesses – and underscores the rapid change going on in the banking industry. Even today, banks claim that startups can’t touch their core business, with payments players often sitting on top of existing banking infrastructure (like direct debit via GoCardless or SlimPay); however, P2P Lending presents a real threat to the banking system, as players like Lending Club &, increasingly, Prêt d’Union reach critical mass and begin managing larger asset amounts.
Competition in Europe
Of course, Prêt d’Union, who sees Europe as a growth opportunity, isn’t the only player looking to replicate Lending Club’s success across Europe. From Estonia to London, players have been popping up around Europe in the past 5 years, and historical players have come into the market as well. Will €31 Million be enough to enable Prêt d’Union to break out in front of the pack of fintech startups? Only time will tell.