LONDON – Peer-to-peer lender RateSetter announced on Monday that it has passed £2 billion in loans over its platform, with more than £1 billion of the total made since the beginning of 2016.
Founded in 2010, RateSetter allows ordinary people looking to lend their money directly to businesses and individuals over its online platform.
About £1.3 billion of the total lent has gone to individuals, with £700 million going to businesses. The company now has 423,000 customers, the majority of whom are borrowers, more than any other UK peer-to-peer lender.
CEO and Founder Rhydian Lewis says in a statement: “Less than seven years ago, we wrote the first RateSetter loan from my living room. It has been fantastic to see the development of the business since and this £2 billion milestone is an exciting moment for RateSetter, as we continue to experience strong growth.
“Of course, the real measure of good lending is whether loans perform and money is repaid. I am delighted that £1.3 billion has been repaid to date, delivering more than £76 million in interest to people across the country who lend through RateSetter’s platform.”
RateSetter is one of the “Big Three” peer-to-peer lenders in the UK, alongside Funding Circle and Zopa. Funding Circle and Zopa have both also lent over £2 billion since launch.
RateSetter pioneered the Provision Fund, which spreads a lender’s risk across the whole loan book and is meant to cover initial losses incurred on loans. Borrowers make risk-weighted payments into the Fund, which steps in to reimburse the lender if a repayment is missed.
Earlier in July, RateSetter announced it had taken over two small businesses and taken a minority stake in a third, to protect investors from possible losses and extend its lending operation. All three companies were RateSetter borrowers, raising questions about whether RateSetter should have taken them on. The company has made clear that the Fund model and occasional intervention does not guarantee the safety of investments.
In May this year, the company announced having secured £13 million in equity funding from existing shareholders, including Woodford Investment Management and Artemis.