After Declining Wonga Offers, On Deck Lands $42M From IVP, SAP & First Round To Bring Online Lending To Main Street
By Rip Empson – February 13, 2013
Not all small businesses and startups are lucky enough to raise venture capital. When Main Street business owners, like your local tailor, barber or florist find themselves in need of capital to help grow their businesses, they typically are forced to turn to banks for a loan. But applying for these loan packages is time-consuming and expensive.
Launched in 2007, On Deck Capital set out on a mission to simplify the borrowing process for Main Street businesses by giving them access to fast, short-term lending online. Leveraging data aggregation and electronic payment technologies, the startup gives banks an alternative method for evaluating the creditworthiness of local businesses (to avoid relying on personal credit scores), in turn making it easier for mom-and-pop shops to secure a loan.
Over the last two years, On Deck’s alternative approach to lending and evaluating the health of small businesses has begun to catch on: Today, the startup has deployed $400 million in loans to small businesses and, in 2012, the company raised $100 million in credit facility commitments from Goldman Sachs and Fortress Investment Group, tripled its distribution partners to 1,500 nationwide and grew to 160 employees. From 2008 to 2011, the company saw 1,233 percent revenue growth, increasing annual revenue from $1.5 million to just under $20 million in 2011 — and to $37 million in 2012.
Click here to read the article in full.