Orca launches £500k crowdfunding raise

But is aggregation really the future of P2P?

P2P supermarket Orca Money is looking to raise £500k via equity crowdfunding site Seedrs. The campaign, which went live today, raised 69 per cent of its target from pre-registered investors.

The half a million pounds will be parted with in exchange for 22.23 per cent of the company, giving Orca a pre-money valuation of around £1.75m.

In announcing the fundraise, Orca stressed the need for aggregation in what is an increasingly complex and equally crowded market.

Iain Niblock, CEO of Orca, said in a statement: “We believe that aggregation is the next logical step for alternative lending. We are concentrating on developing our product to deliver greater value to our customer-base. This includes integrating with more lenders.”

Orca began by offering research on the P2P market to investors. Then, in March of this year, it expanded its services by allowing investors to build and manage portfolios of P2P loans on its platform.

If successful, Orca will use the money to grow its customer base, integrate with more lenders, enhance its product features, further develop its research service and prepare for European expansion.

While aggregation might seem like a natural next-step for peer-to-peer lending, the model has proven problematic. Several startups in this sub-sector of the industry have had to stage strategic pivots – in some instances merely delaying the inevitable.

Part of the issue is that aggregators represent an added layer of intermediation – usually meaning an added layer of fees – in a famously disintermediated industry. Aggregators' ultimate mission is to own investor relationships. If they were to succeed, their P2P platform partners would take on more of a background role.

It is perhaps for this reason that Orca is not currently integrated with any of the ‘big three’ peer-to-peer lenders – Funding Circle, Zopa and RateSetter.

It must be said, however, that Orca’s roster of partners – Octopus Choice, LendingCrowd, LendingWorks, Landbay and Assetz Capital – represents a solid second tier of platforms. Orca also claims to have another 11 partners in the pipeline.

Orca contends that platforms find it hard to attract retail investors, a problem its differentiated offering can help solve. 

Interested backers will no doubt want to seek clarity from Orca on how the FCA's proposed P2P marketing restrictions will affect its business model. If the proposals go through, ordinary investors will not be able to invest more than 10 per cent of their net investible portfolio in peer-to-peer agreements. 

There is a significant opportunity lurking for any aggregator that can properly crack the P2P market. Do Seedrs investors believe Orca is the one to do it?