people background, a South Korean marketplace that connects borrowers and investors to enable loans, recently added $20 million to its $63.4 million Series C.
Existing backer Bain Capital led the extension, with participation from previous investors including Access Ventures, CLSA Capital Partners Lending Ark Asia, D3 Jubilee Partners, 500 Global, Kakao Investment, TBT Partners and IBX Partners.
The additional funding brings the total raised from PeopleFund to about $100 million in capital. In addition to capital, PeopleFund also secured $240 million in debt financing in 2022 from Goldman Sachs, CLSA Lending Ark Asia, and Bain Capital. The company did not disclose its valuation when asked.
In 2021, PeopleFund raised $63.4 million (75.9 billion won) in capital for Series C, also led by Bain Capital, to further develop its credit rating system.
PeopleFund plans to use its new capital to continue advancing its AI-powered credit scoring and risk management system for its users, which include borrowers and lenders. On top of that, the startup aims to launch a B2B service this year to provide AI-enabled personalized credit scoring system services to financial institutions.
Another reason for its track extension is to meet one of the requirements for a P2P lending license, according to industry sources. In South Korea, P2P lending marketplaces must pass annual requirements to obtain a license from the Financial Services Commission (FSC) to operate their business. To operate its business in 2023, PeopleFund, which reports losing profit, must have minimum capital ranging from $400,000 to $2.4 million, depending on its loan balance. (The loan balance is the remaining amount of PeopleFund loans that borrowers have not yet repaid.) PeopleFund’s loan balance was $264.3 million (326.8 billion won) as of December 2022, the company said. That means the capital required by the team is around $1.5 million to $2.4 million, according to industry sources and local media.
Joey Kim, founder of PeopleFund, said in a statement that “2022 will be marked as a turbulent year for fintech, with the global public market tightening alongside changes in the macro environment. Meanwhile, the Korean consumer lending market has undergone a dramatic transition to the mobile sphere, with big players like KakaoPay and Toss leading the charge. This transition, coupled with credit market instability, is opening up opportunities for technology-based digital lenders and their technologies to highlight our competition compared to traditional financial institutions.”
Image Credits: PeopleBackground
The team says its total amount of loans made to borrowers to date was estimated at $1.3 billion in December, up from $936 billion in October 2021. The startup says it has seen growth of more than 56.7 % in the number of borrowers and 9.6% in the number of lenders compared to the previous year. The number of its borrowers and borrowers was 20,688 and 2,943,883, respectively, as of December last year.
The Seoul-based P2P lending startup, founded in 2015, successfully closed its extension. Still, the impact of extremely difficult market conditions was inevitable, leading to several layoffs in the tech industry in recent months. PeopleFund confirmed that it had cut about 10% of its staff in the fourth quarter of 2022 to “operate the business efficiently and effectively” amid the possibility of a worsening economy. PeopleFund had almost 150 people in December 2021.
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