Money Pours Into Fintech As Three Startups Raise $115 Million

Financial data startup Orchard just raised $30 million from high-profile investors–in the third such announcement this week alone.

Orchard Platform, a financial data startup focused on the booming alternative lending market, has raised $30 million in Series B funding, the New York company announced Thursday morning.

It’s only the latest fundraising announcement this week from financial technology, or fintech, startups, as investors step up their bets on the fast-growing market. CommonBond, a student lending platform, on Tuesday announced a $35 million round; Fundbox, which provides small-business financing, on Thursday announced a $50 million round. (Last year alone, global investment in fintech companies tripled, to more than $12 billion, with most of that happening in the United States, according to CBInsights.)

“There’s definitely a lot of investor interest in the space. Overall it’s another validation,” Matt Burton, co-founder and chief executive officer of Orchard, told me on Wednesday.

That interest is coming from pretty high-profile investors, too. Orchard has already attracted several prominent Wall Street veterans, including former Citigroup CEO Vikram Pandit, former Morgan Stanley chairman John Mack, former Visa president Hans Morris, and Capital One co-founder Nigel Morris.

Orchard’s round announced Thursday, led by venture firm Thrive Capital, also included an investment from former Goldman Sachs co-president Jon Winkelried, a man who was in the running to take over the investment bank before he left in 2009. He’s now a special adviser to Thrive, a firm that Fortune last year dubbed “New York’s quietest success story,” in part for its investments in companies including Warby Parker, Spotify, and Instagram.

Orchard is much less of a household name than those companies, and what it does it much less sexy or, indeed, relevant to many Americans. But it’s found and filled an important niche in the world of the online “marketplace” lending made increasingly popular by the success of Lending Club and Prosper.

When you apply online for a Lending Club loan, what you’re often getting is money provided by hedge funds or other institutional investors, which buy and fund many of the loans that Lending Club arranges. Orchard makes the technology that many of those investors use to vet and choose the marketplace loans they buy.

Started just two years ago by Burton, a former ad-tech guy who sold his company to Google, and Angela Ceresnie, a risk-management veteran of American Express and Citi, Orchard now connects its investor clients with some 130 marketplace lenders. (Its two other founders are David Snitkof and Jonathan Kelfer.)

Orchard also provides services directly to three of the biggest lending platforms–Lending Club, Prosper, and Funding Circle–and Burton says the new money will help expand Orchard’s services, and client list, on the loan originator side. He predicts that the company’s head count, currently at 45, will double next year, as Orchard also looks to expand offices. Its 2015 revenues are on track to be around $3 million, he said this week.

The round announced Thursday brings Orchard’s total funding to $44.7 million. Valuation in the latest round was not disclosed.

Source: Inc., Maria Aspan
Photo: Getty Images