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South Korean marketplace PeopleFund, which connects borrowers and investors to facilitate lending, recently raised $20 million in a $63.4 million Series C round.
Existing backer Bain Capital led the extension, with participation from investors such as Access Ventures, CLSA Capital Partners Lending Ark Asia, D3 Jubilee Partners, 500 Global, Kakao Investment, TBT Partners and IBX Partners.
The additional funding brings PeopleFund’s total equity to $100 million. In addition to the capital, People Fund has secured $240 million in debt financing from Goldman Sachs, CLSA Lending Arc Asia and Bain Capital in 2022. The company did not disclose the valuation when asked.
In the year In 2021, People Fund raised $63.4 million (75.9 billion won) in Series C, also led by Bain Capital, to further develop its credit-taking system.
People Fund plans to use the new capital to continue its AI-powered risk management and lending system for its users, including borrowers and lenders. On top of that, the startup aims to launch B2B services this year to provide an AI-enabled customized lending system to financial institutions.
According to industry sources, another reason for the extension of the airport is to fulfill one of the requirements for P2P lending license. In South Korea, P2P lending marketplaces must pass annual requirements to obtain a license from the Financial Services Commission (FSC) to conduct their business. In the year To run the business by 2023, People Fund, which reports that it is turning a profit, must have a minimum capital of $400,000 to $2.4 million, according to its loan portfolio. (The loan balance is the amount of PeopleFund loans that borrowers have not yet paid.) PeopleFund’s loan balance as of December 2022 was $264.3 million ($326.8 billion won), the company said. Industry sources and local media reported that the clothing standard’s capital is around $1.5 million to $2.4 million.
“2022 will be a turbulent year for fintech, with global public market adjustments coupled with changes in the macro environment,” People’s Fund founder Joy Kim said in a statement. Meanwhile, Korea’s consumer loan market has made a dramatic shift into the mobile sphere, with big players like Kakaopay and Thos leading the change. This transition, coupled with the uncertainty of the credit market, is opening up opportunities for technology-based digital lenders and the technologies to leverage our strengths compared to traditional financial institutions.
Image Credits: People Fund
The group’s year-to-date total lending to borrowers was estimated at $1.3 billion in December, up from $936 billion in October 2021. Number of lenders compared to last year. As of December last year, the number of borrowers and lenders was 20,688 and 2,943,883 respectively.
The Seoul-based P2P lending startup, founded in 2015, has successfully closed its extension. Still, the impact of the extremely difficult market conditions was inevitable, causing several layoffs in the tech industry over the past few months. PeopleFund confirmed it will cut 10 percent of its workforce in the fourth quarter of 2022 to “run the business efficiently and effectively” due to the worsening economy. The People Fund had about 150 people by December 2021.
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