Ready Union, the “Lending Club” French, engages a gear

Difficult for a French startup, raising more than 10 million? Not for Loan Union, anyway. This platform crowdfunding, specializing in loans between individuals, announced Thursday, July 2 has completed a capital increase of 31 million euros. Funds raised from Anglo-Saxon investors? Not even! Most of this amount, the FinTech has the luxury to find with French financiers. Starting with the private equity firm Eurazeo, which with Kernel Investments – the holding company owned by Pierre Kosciusko-Morizet, PriceMinister founder – has brought 17 million.

The balance of 14 million is the historical shareholders of Loan Union, namely Crédit Mutuel Arkéa, AG2R La Mondiale, Kima Ventures – the venture capital fund of Xavier Niel, founder of Free – Weber Investments – the holding of founder of Financière de l’Echiquier – and Schibsted, the Norwegian media group editor of the daily 20 Minutes and site leboncoin.fr. After this round, Eurazeo is one of the three major shareholders of Ready Union, alongside Crédit Mutuel Arkéa and Schibsted. “This investment demonstrates our desire to contribute to the emergence of tomorrow’s leaders, especially in sectors supported by the development of the collaborative economy and digital transformation,” said Virginie Morgon, CEO of Eurazeo.

It must be recognized that Ready Union has everything a “French Lending Club ‘, named after the American platform become world number one lending between individuals. Instead of “peer-to-peer lending”, it should also be better to speak of “online lending.” For, whether on loan Union or Lending Club lenders, investors are not only individuals but also legal persons, such as family offices (family wealth managers), foundations, unions pension and small management companies. A little world of sophisticated investors, more than ever in search for yield in the current environment of very low-interest rates.

Opposite, borrowers are themselves of French households, who need 3,000 to 40,000 euros to buy a car, renovate their homes or to finance the studies of the youngest. Amounts that lenders agree to them over periods of two to five years, at an interest rate of between 3.4% and 6.65%, plus 1.8% handling fee. Cheaper rates than traditional actors of consumer credit, and a simpler and faster service, this is the promise of Loan Union. A promise that seduced since its commercial launch in December 2011, 200 million euros were lent to French households via the platform, which corresponds to a doubling of volume each year.

In terms of the economic model, the FinTech is remunerated through fees charged to borrowers on the amounts collected and the average management fees collected from lenders-investors. “We strive for financial balance in France for summer 2016,” said Charles Egly, co-founder, and CEO of Ready Union. “However, we will continue to invest heavily in growth because we have a real boulevard ahead of us,” warned the young leader. Hence the fundraising of € 31 million announced Thursday. If Ready Union seems far from having exhausted the potential of the French market, where the FinTech will also carry 30 or 40 recruits by the end of 2016, however, the startup judge that the time of its internationalization came.