Funding Circle has announced a partnership with New York-based alternative credit manager Varadero Capital to provide up to £400m of funding to small businesses in the UK.
Varadero will use Funding Circle’s technology and distribution platform, supported by its machine learning capability, to deploy capital over an 18-month period.
The deal extends an existing partnership between the two firms.
“It’s great to see Varadero and Funding Circle’s partnership continue to strengthen. This further commitment will benefit thousands of UK small businesses, who will use this funding to grow, create jobs and invest in their communities,” said Lisa Jacobs, chief executive of Funding Circle. “I’m proud such a diverse range of investors see our technology and distribution platform as an effective way to deploy capital into the real economy.”
Fernando Guerrero, managing partner and chief investment officer at Varadero, added: “Varadero has a successful history and track record of supporting specialty finance companies in the US and Europe to access efficient funding, making them competitive in their respective markets. This transaction represents another milestone in the development of our European franchise.”
Varadero has $2bn (£1.7bn) in assets under management focused on asset-based speciality finance and structured credit. Since it was founded in 2009 it has deployed approximately $13bn in capital.
Funding Circle is the UK’s largest loan platform for small and medium-sized businesses. Investors have lent around £14bn to approximately 120,000 businesses globally through the platform. This is not the first time the group has partnered with an asset manager.
In May, it announced a £1bn lending partnership with Waterfall Asset Management, to deploy funding over a two year period.