iwoca, which provides short-term loans to online retailers based in the UK, announced today that it has raised £5 million (about $8.2 million) from Global Founders Capital, a new private investment fund launched by the Samwer brothers of Rocket Internet fame, and Luxembourg-based Redline Capital Management. All of iwoca’s existing investors also returned for the current round, which brings the total iwoca has raised so far to about £7 million (about $11.5 million). The startup, which is based in London, says it will use its latest funding to scale up its UK operations and expand into Europe.
In a statement, iwoca co-founder and CEO Christoph Reich said that the new investment will allow his company to provide short-term financing to 5,000 more small businesses in the UK in 2014. The investment will also give iwoca the opportunity to leverage the Samwer brothers’ experience in building high-growth businesses.
Their investment in iwoca is interesting because Berlin-based Rocket Internet has focused lately on pouring funds into e-commerce startups in emerging markets like Southeast Asia, the Middle East and Africa. But although retail sales in Europe have slowed since the 2008 global financial crisis, there are signs that consumers in the U.K. are now more willing to open their pocketbooks as the economy gradually recovers. E-commerce businesses in the U.K. were expected to reach a total sales value of £87 billion in 2013, representing 12 percent year-over-year growth, according to research firms IMRG and Capgemini.
Rieche said that the new investment will allow iwoca to tap into a market of more than 4.6 million businesses in the UK: “This latest round of funding will allow us to leverage our existing operations and drive growth. Our highly innovative approach to data-analysis and credit scoring coupled with Oliver Samwer’s experience in franchise building puts us in an incredibly strong position to take advantage of the structural change within the business lending industry.”
The funding may also help iwoca compete against Ezbob, which was launched in September 2012 and has raised a total of $5 million in funding so far. Both companies cater to eBay and Amazon sellers, as well as vendors on other online platforms, and use data- and credit-scoring tools to provide loan applicants with quick decisions.
The €150 million Global Founders Capital fund will invest in Internet businesses throughout the world at different stages of funding and is run by Marc and Oliver Samwer, along with Fabian Siegel, the co-founder of Delivery Hero.
In a statement, Siegel said “We invest in proven concepts with huge market potential. The team at iwoca has demonstrated extraordinary execution skills and are committed to breaking new ground in business lending. We will put our expertise in building internet companies and our global network at their disposal to help them drive growth.”