PeopleFund, a South Korean marketplace that connects borrowers and investors to enable loans, recently added $20 million to its $63.4 million Series C.
Existing backer Bain Capital led the expansion, with participation from previous investors including Access Ventures, CLSA Capital Partners Lending Ark Asia, D3 Jubilee Partners, 500 Global, Kakao Investment, TBT Partners and IBX Partners.
Additional funding brings PeopleFund’s total funding to approximately $100 million. Apart from capital, PeopleFund has secured his $240 million in debt from Goldman Sachs, CLSA Lending Ark Asia and Bain Capital in 2022. The company did not disclose the valuation when asked.
In 2021, PeopleFund has raised $63.4 million (75.9 billion won) in Series C equity. The Series C was also led by Bain Capital and further developed the credit scoring system.
PeopleFund plans to use the new funds to continue evolving its AI-powered risk management and credit scoring system for its users, including borrowers and lenders. In addition to that, the startup will launch a B2B service this year, aiming to provide an AI-enabled customized credit scoring system service to financial institutions.
Another reason for extending the runway is to meet one of the requirements for a P2P lending license, according to industry sources. In South Korea, P2P lending marketplaces must pass an annual requirement to obtain a license from the Financial Services Commission (FSC) in order to operate their business. To operate in 2023, PeopleFunds reporting loss of income will need to have minimum capital ranging from $400,000 to $2.4 million, depending on their loan balance. (Loan balance is the remaining amount of loans by PeopleFund that borrowers have not yet repaid. PeopleFund’s loan balance is $264.3 million (326.8 billion won) as of December 2022, the company said. According to industry sources and local media, this means the required capital for the costume is about $1.5 million to $2.4 million.
PeopleFund founder Joey Kim said in a statement: Meanwhile, the Korean consumer finance market is undergoing a dramatic shift to the mobile space, with big players such as KakaoPay and Toss leading the change. This shift, coupled with credit market volatility, opens up opportunities for technology-based digital lenders and their technology to underscore our capabilities relative to traditional financial institutions. “
Image credit: people fund
The total amount of loans deployed to borrowers to date is estimated at $1.3 billion in December, up from $936 billion in October 2021, according to the company. The number of lenders increased year-on-year. As of December last year, there were 20,688 borrowers and 2,943,883 lenders.
The Seoul-based P2P lending startup founded in 2015 has successfully completed its expansion. Still, the impact of extremely difficult market conditions was inevitable, with several technology industry layoffs occurring over the past few months. The PeopleFund has confirmed that it has cut about 10% of its staff in the fourth quarter of 2022 in order to “operate efficiently and effectively” in a potentially weaker economy. At the PeopleFund, he has nearly 150 people as of December 2021.
Want more fintech news in your inbox? Sign up here.
