French online P2P lending platformPrêt d’Union has raised €31 million from new investors Eurazeo (a European investment company), Pierre Kosciusko-Morizet as well as existing investor Crédit Mutuel ARKEA, SCHIBSTED, AG2R La Mondiale and Weber Investissements. This brings the total funding raised by the company to €47.1 million since its launch in 2011.
In the financial services industry, P2P first emerged in 2005 with a focus on lending and borrowing. P2P lending platforms (also known as marketplace lending platforms) offered an alternative to traditional banking and payment systems since they cater to the underserved with services like consumer lending, student loans, real estate loans and small-business lending. While these primarily online providers create a marketplace for lenders and borrowers, lenders can also expect a higher rate in this system. Disruptive players like Lending Club, Prosper, OnDeck and others have made this a viable and growing opportunity in the US. In France, Prêt d’Union is the leader in P2P lending.
Eurazeo Croissance with Pierre Kosciusko-Morizet contributed €17 million out of the €31 million raised by Prêt d’Union. Eurazeo Croissance will help Prêt d’Union in its plan of European expansion and pursue its development in France with its human and financial support.
Deputy CEO of Eurazeo Virginie Morgon said in a news article, "The investment in Prêt d'Union goes hand in hand with Eurazeo Croissance's philosophy and ambition: contribute to the emergence of future leaders, particularly in sectors driven by growth in the sharing economy and digital transformation, by providing them over the long term with the resources needed to fulfil their ambitions. We are fully committed to assisting Prêt d'Union with its development, in France and abroad, in the markets that Eurazeo has already conquered."
The new funding will be used for European expansion and work on France’s development. In 2016, the company plans to target Italy first, following up with the other European countries after.
So far, the company has granted loans of €200 million in over three years. This brings the average monthly growth of the company to 6%. Currently, more than 80 employees work for the company in France.
With the huge amount of funds raised by these P2P lenders, it is clear that P2P lending is disruptive in nature and is a huge challenge for mainstream financial institutions. It is also set to grow exponentially in the next few years and expand to new product categories including mortgages and other secured loans.