Small business platform Iwoca has landed €100m from asset manager Insight Investment to lend to “several thousand small businesses” across Germany.
The London-based fintech, founded by chief executive Christoph Rieche (pictured, right) and chief technical officer James Dear (pictured, left) in 2012, said new funds will provide additional credit in Germany where Iwoca is already the largest fintech small business lender. Iwoca, which employs over 300 staff, operates mainly in the UK and Germany.
The platform said it has issued over €1bn in loans to small businesses since it was formed eight years ago to over 50,000 firms. It typically provides loans ranging between £1,000 and £250,000.
The startup said as its loan book grows it is able to give more institutional investors access to the German small businesses credit market.
Money manager Insight Investment manages £660bn and was founded in 2002 by Bank of New York Mellon.
‘High-quality cashflow streams’
Insight Investment head of secured finance Shaheer Guirguis said: “Our team is always looking for opportunities to expand our investment universe to new frontiers, in collaboration with high quality partners. This investment in Iwoca’s fintech loans allows us to diversify into a new sector in Europe’s largest economy and we believe it also provides our clients with diversification and high-quality cashflow streams.”
Iwoca’s Rieche added: “More than 90 per cent of companies in Germany are small businesses, yet many of them suffer from poor access to finance as traditional lenders can’t support them the way they need it. Our mission is to change that. With Insight Investment we have found a very agile and responsive partner that complements our mission-driven way of working. They provide the perfect basis for us to enter a new phase of growth in Germany.”
More than three million small businesses in Germany employ less than 10 workers, according to public data group IfM Bonn.
Usually, Iwoca is a profitable fintech startup. Unlike consumer-focused platforms, the small business lender does not have to offer costly free offers to tempt customers away from established banks and insurers.
Iwoca returned a profit of £1.3m in the year to the end of December 2018, compared to a loss of £2.6m in the previous 12 months. Sales leapt by 88 per cent to £48m over the same period, according to Companies House filings.