Fintech small business lender iwoca will receive € 100 million to finance new loans for several thousand small businesses across Germany. The debt capital is provided by Insight Investment, one of the largest global asset managers in the world.
iwoca, which was set up by a German-British duo of co-founders, has already issued over € 1bn in loans to small businesses primarily in the UK and Germany. The new funds will be used to provide credit in Germany where iwoca is already the largest fintech small business lender. Overall, Insight’s investment will take the total amount of equity and debt finance raised by iwoca to over € 500 million.
In late 2019, after years of strong initial growth, iwoca announced plans to strengthen its German presence by doubling the headcount – largely in its regional Frankfurt office – from 50 to 100 employees. As iwoca’s loan book grows, it is giving more institutional investors access to the German credit market for small businesses – a group which they have not been able to target at such a large scale in the past.
Shaheer Guirguis, Head of Secured Finance at Insight Investment, commented: “Our team is always looking for opportunities to expand our investment universe to new frontiers, in collaboration with high quality partners. This investment in iwoca’s fintech loans allows us to diversify into a new sector in Europe’s largest economy and we believe it also provides our clients with diversification and high-quality cashflow streams. iwoca is at the forefront of this emerging sector and we are pleased to help them support German small businesses.”
Christoph Rieche, CEO and Co-Founder of iwoca, said: “More than 90% of companies in Germany are small businesses, yet many of them suffer from poor access to finance as traditional lenders can’t support them the way they need it. Our mission is to change that. With Insight Investment we have found a very agile and responsive partner that complements our mission-driven way of working. They provide the perfect basis for us to enter a new phase of growth in Germany.”
According to data from public research institute IfM Bonn, there are more than 3 million small businesses with less than 10 employees in Germany.