Borro, The High-End Online Pawnshop, Raises $112M To Fill Its Finance Pool, Expand In U.S.


Borro, an online platform that lets people borrow cash and put up luxury watches, art and other fine goods as collateral, is today announcing a new funding round of $112 million, coming entirely from one backer that focuses on finance investments, Victory Park Capital. Paul Aitken, Borro’s founder and CEO, tells me that the money will be used to continue to grow out its business in the markets where it is active — the UK and the U.S. — and specifically to expand the pool of money that Borro has available to offer for financing.

The funding comes on the back of strong growth at the company. In 2013, Borrow saw about $50 million of lending, Aitken told me in an interview. This year, it expects to lend $100 million. Last year’s revenues on those loans were $17 million; this year Borro expects “just over $30 million,” he says.

Prior to today’s round, Borro, which has been around since 2007, had raised just over $40 million from investors that include Canaan Partners, Eden Ventures, European Founders Fund, Augmentum and Ribbit Capital.

So how does Borro work?

The basic idea is, yes, rooted in the concept of a pawn shop, but then it is taken to a tech level: users who need cash and have valuable items in categories like fine art, jewellery, watches, precious metal, luxury cars and fine wine, which they can hold up as collateral, reach out to Borro via its website. Initial applications are made there, but then the next stage is taken offline. Borro has built up a network of object experts in different fields, along with a network of logistics experts, who come directly to a person to evaluate and collect an item, and to give the customer cash in return, typically at around 65%-70% of the value of the good.

As with a pawn shop, a customer then has a period of time in which he or she can pay back the money, plus interest. Typically an item is kept for about six months before money is returned to Borro, at an interest rate of between 3.5% and 4% on average. If the item doesn’t get collected in about 10 months, then Borro starts to look at liquidating. That can be through private direct sales, through dealers, or commonly at auction.

BorroHIRES-0115What’s interesting is that if it finds that an item then sells for more than the value for which it was consigned, Borro will return the difference to the customer. Aitken told me of such a recent case, when a piece of antique Harry Winston jewellery, consigned for around $100,000, eventually sold at auction for more than $300,000 — giving the original owner an unexpected boost. Sometimes the selling stage is also conducted online — “online, then offline, then online again,” is how Aitken describes it. “Not unlike Amazon when you think about it.”

As e-commerce continues to mature, we are starting to see people more willing to transact in larger and larger sums online, and Borro has been one benefactor of that trend.

“We’re seeing a lot more opportunities in the $50,000 loan plus range,” Aitken told me. “If you look back three years our average loan was couple of thousand dollars, but now it is $12,000. Bigger-ticket clients are coming in and using our services.”

Borro’s rise comes at a time when we are also seeing a number of other startups in the financing space — Lending Club perhaps being one of the best-known examples, but also from the likes of Square, which is reportedly working on a new initiative called Square Capital to provide loans to merchants with the option of paying the money back via transactions on the Square platform.

Some of the funding, Aitken tells me, will be to set up more extensive localised operations in the U.S., so that people can drop in to see the company more easily with their items. Right now, Borro has offices in London and New York, where it is co-headquartered; and future locations could include Los Angeles or Las Vegas (a city that is not a stranger to the pawnshop business model).

Why the turn to Victory Park Capital for this round? “VC firms aren’t typically funding loan books, and they don’t want to have their capital deployed into funding loans,” Aitken explains. Victory Park, on the other hand, has a track record in this area, investing in AvantCredit, Kabbage, ZestCash and Think Finance.

“We are very excited about the opportunity to partner with Borro, especially at this point in the company’s lifecycle as it continues into new geographical markets,” Brendan Carroll, Partner, Victory Park Capital said in a statement. “Paul has surrounded himself with an accomplished team and we look forward to helping Borro take its innovative business model to the next level.”

That next level, Aitken tells me, will also eventually include working with other e-commerce platforms and others who can either help sell goods or are conduits for consumers who are in need of a large cash sum. Given that Amazon has recently made a move into selling fine art, you can see how that strategy may start to find willing partners.

More TechCrunch

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

13 hours ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

15 hours ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares

Meta, the parent company of Facebook, launched an enterprise version of the prominent social network in 2015. It always seemed like a stretch for a company built on a consumer…

With the end of Workplace, it’s fair to wonder if Meta was ever serious about the enterprise

X, formerly Twitter, turned TweetDeck into X Pro and pushed it behind a paywall. But there is a new column-based social media tool in town, and it’s from Instagram Threads.…

Meta Threads is testing pinned columns on the web, similar to the old TweetDeck

As part of 2024’s Accessibility Awareness Day, Google is showing off some updates to Android that should be useful to folks with mobility or vision impairments. Project Gameface allows gamers…

Google expands hands-free and eyes-free interfaces on Android