P2P lending platform PeopleFund raises $20 million in Series C round led by Bain Capital • TechCrunch

PeopleFund, a South Korean marketplace that connects borrowers and investors to enable lending, recently raised $20 million to its $63.4 million Series C round.

Existing backer Bain Capital led the expansion, with participation from previous investors such as Access Ventures, CLSA Capital Partners Lending Ark Asia, D3 Jubilee Partners, 500 Global, Kakao Investment, TBT Partners and IBX Partners.

The additional funding brings PeopleFund’s total equity raised to approximately $100 million. In addition to the capital, PeopleFund also secured $240 million in debt financing in 2022 from Goldman Sachs, CLSA Lending Ark Asia and Bain Capital. The company did not disclose its valuation when asked.

In 2021, PeopleFund raised $63.4 million (75.9 billion won) in Series C equity, also led by Bain Capital, to further develop its credit scoring system.

PeopleFund plans to use its new capital to continue promoting its AI-powered risk management and credit scoring system to its users, which include borrowers and lenders. On top of that, the startup aims to launch a B2B service this year to offer AI-enabled customized credit scoring system services to financial institutions.

Another reason for the runway extension is to fulfill one of the requirements for a P2P lending license, according to industry sources. In South Korea, P2P lending marketplaces must meet annual requirements to obtain a license from the Financial Services Commission (FSC) to operate their business. To operate its business in 2023, PeopleFund, which reports that it is operating at a profit, must hold a minimum capital that ranges from $400,000 to $2.4 million, depending on its loan balance. (The loan balance is the remaining amount of loans provided by PeopleFund that borrowers have not yet repaid.) PeopleFund’s loan balance was $264.3 million (326.8 billion won) as of December 2022, the company said. That means the outfit’s capital needs are around $1.5 million to $2.4 million, according to industry sources and local media.

Joey Kim, founder of PeopleFund, said in a statement that “2022 will be marked as a year of turbulence for fintech, with the global public market adjustment along with changes in the macro environment. Meanwhile, the Korean consumer loan market has undergone a dramatic transition into the mobile sphere, with major players such as KakaoPay and Toss leading the change. This transition, combined with the instability of the credit market, opens up opportunities for technology-based digital lenders and their technologies to highlight our expertise compared to traditional financial institutions.”

Image credit: PeopleFund

The outfit says the total amount of loans deployed to borrowers to date was estimated at $1.3 billion in December, up from $936 billion in October 2021. The startup says it has seen more than 56.7% growth in the number borrowers and 9.6% in the number of borrowers. number of lenders compared to the previous year. The number of borrowers and lenders was 20,688 and 2,943,883 respectively as of December last year.

The Seoul-based P2P lending startup, founded in 2015, successfully completed its expansion. Still, the impact of the extremely tough market conditions was inevitable, leading to several layoffs in the tech industry in recent months. PeopleFund confirmed it had cut around 10% of its staff in the fourth quarter of 2022 to “run the business efficiently” amid the possibility of a worsening economy. PeopleFund had almost 150 people as of December 2021.

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