Uniting European markets under the roof of a single platform creates a huge opportunity given the size of the population in the continent and the volume of outstanding debt. Thus, Eurozone countries alone account for 340 million people and EUR 1.1 trillion in outstanding consumer credit debt, a market equivalent to US. Lending to borrowers in markets that are independently relatively small (even Germany, the largest economy in Europe is only approximately twice the size of California in terms of GDP) allows earning premium returns due to lack of competition among traditional lenders.
Pärtel Tomberg, CEO and co-founder of Bondora, said he hoped the cash infusion from Valinor Management, the hedge fund run by David Gallo, will allow his company to build the more complex infrastructure needed to make more cross-border loans. ‘The goal is really to become a global market,’ Pärtel Tomberg said in an interview. ‘There are no precedents in the world on many of the things we want to do.’
The company also wants to attract institutional lenders from the US.
A possible mid-term competitor might be Lending Club. But Lending Club said in the investor conference call on Tuesday that they will focus on the US market and will not use the capital raised in their December IPO on international expansion plans in the near future. Renauld Laplanche is however monitoring international developments in the market: ‘We’ll see what model is really the winning model in any particular geography.’
Phil Austern from Valinor will be joining Bondora’s board. This round comes after a previous round in April 2014.