By Ryan Weeks on Monday 18 September 2017
Invoice finance platform enters partnership with German private bank.
MarketInvoice has signed another £45m funding deal with another bank. Varengold Bank AG will provide £45m in debt funding annually to the platform, to be lent to UK SMEs.
Varengold is a German private bank, headquartered in Hamburg. Launched in 1995 as a boutique asset manager, the company morphed into a fully-fledged bank in 2013, when it was granted a commercial banking licence.
Varengold is the second bank to have committed to funding loans via the MarketInvoice platform in recent months. The firm struck a very similar partnership with Portuguese challenger bank Banco BNI Europa in May of this year.
Part of what is driving the extra room for these institutional investors is MarketInvoice’s longer term product, MarketInvoice Pro, which went live in February. Unlike MarketInvoice Select, which allows small businesses to finance individual invoices, Pro allows SMEs to take an open funding line secured against all outstanding invoices.
The product has been shown, using AltFi Data’s analytics tool, to have increased the platform's capacity for taking on institutional funding. MarketInvoice itself says that its institutional investment volumes have increased more than 4-fold since 2014, from £27.8m to £116.3m so far in 2017. Cumulative funds advanced to small businesses by institutions via the platform stands at £296.2m, which accounts for 26 per cent of the total lending facilitated by MarketInvoice.
MarketInvoice just hit £1.5bn in invoices financed, after having crossed the £1bn mark as recently as December 2016. Over 70,000 invoices have been funded through the platform to date.
“We have been looking at the fintech sector for some time,” said Dan Walker, head of Varengold’s London office. “MarketInvoice and its peer-to-peer invoice finance platform presented a fitting opportunity for us. In particular, we were attracted by their products, approach to risk management and ambition for growth.”