LendKey, a cloud-based lending technology company, has raised $12.5 million in Series B funding. Led by Updata Partners and TTV Capital and joined by existing investor Draper Fisher Jurvetson and Gotham Ventures, the round brings LendKey to a total of $22 million in funding.
Formerly known as Fynanz, LendKey switched its branding at the beginning of this year to distinguish itself from its previous services. It started as a peer-to-peer lending platform like Prosper and Lending Club, but has since taken its platform to the institutional level. LendKey currently serves 253 lending partners and manages about $400 million in student loans through its service.
The startup provides a comprehensive solution for managing lending transactions, from creating and scoring credit applications to pulling funds from lending institutions to issuing electronic invoices. “It’s your brand and it’s your balance sheet,” LendKey founder and CEO Vince Passione says. “It’s our technology and our people, and we take care of the entire end-to-end process.” This approach cuts out any unnecessary staff, since LendKey takes care of most of the processes.
Passione says the funding will go to expanding the company’s tech, sales and operational teams as well as a new office in Ohio. The startup’s first product was managing in-school student loans in 2009, and moved into student consolidation loans in 2011. Passione tells me LendKey will be adding a green loan service by the end of the year, to finance loans for high-efficiency home retrofits and solar panels.
The expansion of services will help LendKey stand out among other competitors that offer student loan financing solutions, such as First Marblehead. Passione tells me a large advantage is that the service takes care of the entire loan procedure. Another way the company mitigates work for its clients is by offers services instead of finance management software like FiServ and Jack Henry. LendKey charges an origination fee on all loans originated, as well as an annual servicing fee.