iwoca, one of Europe’s largest SME lenders, has secured a new £270 million package of debt funding, taking total gross investment in the company to over £1 billion since it was founded in 2012.

iwoca has received £150m in debt financing commitments from Citibank and Insight Investment to support the company’s growth in Germany, and a further £120m from Barclays and Värde for the UK business.

The new investment follows £200m in funding from Barclays and Värde Partners in October last year, and £170m from Pollen Street Capital in January 2023

Iwoca, which has provided £3bn in loans to SMEs in need of working capital in the UK and Germany, says it aims to respond to mounting demand for finance from small businesses.

The company has already broken its record for the volume of loans issued in the first quarter of this year, with over £200m lent across 9,000 business loans in the UK and Germany from January to March 2024.

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iwoca has been growing its share of the lending market through embedded finance technology and increasing its number of partners — allowing businesses to access loans directly through a range of platforms including Qonto and Countingup.

“This investment will enable us to keep up with the high demand from small businesses for our Flexi-Loan product,” said Christoph Rieche, CEO and co-founder.

“Business owners choose us over high-street banks because we make faster lending decisions, typically within 24 hours, and our loan terms are much more flexible. Both of these features are crucial for small business owners, and are only possible due to the technology we have developed over the last decade. 

“With more than 130,000 small business loans processed, we have ample data to build market-leading risk models. 

“This data-driven approach also allows us to lend to businesses that are outside the restrictions imposed by the high-street banks, especially when they don’t have multiple years of trading.”

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