Fundera, the online credit marketplace that helps small business secure loans started by GroupMe cofounder Jared Hecht, has today announced the close of a $11.5 million Series B funding round led by Susquehanna Growth Equity with participation from existing investors including QED Investors, Khosla Ventures, and First Round Capital.
Alongside the funding, SGE’s Scott Feldman and QED’s Frank Rotman are joining the Fundera board.
At its core, Fundera works as a match-maker for SMB lending, letting entrepreneurs who need a small financial infusion (but aren’t interested in the VC path) search for lenders that are trusted and shop around for the best possible deal.
SMBs looking for lending are wandering into the modern-day wild wild west, with brokers and lenders both lacking transparency and looking to get the highest interest rates on short-term loans, which can often put businesses into a cycle of owing lenders instead of using the invested capital to grow their business.
Fundera, which is also a broker, has recently joined a coalition of lenders, brokers, credit marketplaces and non-profit organizations to introduce the Small Business Borrowers Bill of Rights, to help add responsible and accountable best practices to what is a relatively unregulated space.
“With this funding, we were searching for a partner who has helped a business like Fundera grow and were searching for analogs on the consumer side of the market,” explained Hecht. “SGE grilled us harder and got deeper under the hood than anyone we’ve spoken to. SGE also shares our passion for bringing transparency to markets where the internet has had little to no impact and empowering consumers with the tools and services they need to have ultimate buying power.”
Unlike the traditional model, which taxes between 5 percent and 15 percent on the borrower side, Fundera only receives a 1-3 percent origination fee, from lenders only.
“We work a growing network of 25+ different lenders and a small business owner can secure a loan from almost every single one of them without ever leaving the Fundera website,” said Hecht. “That’s an incredibly difficult challenge to tackle on both the product and engineering front. There’s a lot that goes on behind the scenes to ensure that a customer has a seamless experience and never has to think or worry about the individual integrations with the funding providers we work with.”
The company has raised a total of $15 million and has helped secure more than $60 million in credit for more than 1,200 small businesses since launch.
If you want to learn more about Fundera, hit up the website here.
