October 22, 2014
The New York City, New York-based Orchard Platform, a direct lending, investing and analytics platform, announced that it raised $12 million in Series A funding led by Spark Capital and Canaan Partners. With this new investment, Orchard Platform has raised a total of $14.7 million.
Other participants in this round of financing include many additional individual investors, including John Mack, former chairman and CEO of Morgan Stanley; Hans Morris, former president of Visa and managing partner at NYCA; Nigel Morris, managing partner at QED Investors and co-founder of Capital One Financial Services; and others. Existing investors Tom Glocer, Max Levchin, and Vikram Pandit also got involved. According to the company, this recent funding will enable Orchard to grow its team and to further develop its platform.
Online direct lending (otherwise known as “marketplace lending”) allows borrowers to apply for loans online, funded by a set of multiple, diverse investors. Through Orchard Platform, institutional investors are connected to loan originators. Initially an industry dominated by peer-to-peer lending (in which two parties engage in lending without the involvement of a traditional banking institution), larger firms and institutions are increasingly looking to get involved. With Orchard, these larger, institutional players have a way to connect and to fund these loans.
“The growth in marketplace lending and the institutional investor interest in it has been nothing short of exponential,” said Dan Ciporin of Canaan Partners, in a statement. “The need for investors to be able to manage their assets across originators in this ecosystem has become acute. Orchard provides the perfect solution to this problem with a broad-based platform that enables any institutional investor to manage all their marketplace lending assets, wherever they may be located.”
One of the participants in this round, John Mack added:
“For institutional investors, the direct lending market wasn’t even a blip 18 months ago,” said John Mack, former chairman and CEO of Morgan Stanley. “Now we’re seeing a situation where investor demand is outstripping supply. That isn’t going to last as more and more lenders recognize the opportunity to scale and diversify their capital by embracing marketplace funding.”
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