RateSetter, the UK peer-to-peer lending site that competes with Zopa and, less directly, Funding Circle, has raised a further £600,000 in a new round of funding from existing and new undisclosed investors. This brings the total raised by the startup to £1.5m, while the new cash injection will be spent primarily on marketing.
RateSetter, which launched in October 2010 and saw £1m lent by users in its first two months, works along the lines of other P2P or so-called social lending sites. By cutting down the size of the ‘middle person’, lenders and borrowers are said to get a better deal.
In the case of RateSetter, it tries to set itself apart from similar offerings by giving lenders a short term one-month rolling option in which they can withdraw their money at short notice, but also through the way it protects lenders in case of missed payments. RateSetter’s ‘Provision Fund’ is a reserve of money kept separately, which is used to compensate savers in cases where a borrower defaults.
The site claims 7,000 registered users in just over three months, with transactions hitting over 1,500 per-month.