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Germany’s Auxmoney secures €250M for its digital-lending platform for consumer credit

Auxmoney is an online peer-to-peer digital-lending platform for consumer credit in Europe. The platform enables private consumers to borrow from private investors for personal loans, thereby providing borrowers a bank-free borrowing system and a return on investment for lenders.

Auxamoney raises funding

In a recent development, the Germany-based fintech company has raised €250M in a fresh round of funding for its marketplace loans from Citigroup and Chenavari Investment Managers. 

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After Auxmoney announced to invest in loans on its own marketplace in November 2020, the fintech company is now co-investing for the first time alongside partners as part of this transaction.

Dan Zakowski, SVP Marketplace Funding at Auxmoney, is heading the deal team for the current transaction.

Funds for the European market

The raised capital from the debt investors further strengthens Auxmoney’s position as it claims to be a leading provider of technology-enabled access to credit in Europe. Daniel Drummer, CFO at Auxmoney, says, “We see enormous momentum for technology-driven credit offerings in the market. Further new partnerships are in the making.”

Hubert Tissier de Mallerais, Senior Portfolio Manager at Chenavari, said, “We are excited that our partnership with Auxmoney will enable us to invest in digital origination of consumer loans in Germany for the first time. The segment has been partially underserved by traditional lenders. By leveraging advanced digital technology, Auxmoney provides more borrowers access to credit while allowing investors to diversify their portfolios into an attractive asset class.”

Chenavari is a credit-focused asset manager, founded in 2008, with core expertise in European markets.

A lending platform for personal loans

On a weekend in 2006, two college friends Raffael Johnen and Philip Kamp, drove through Frankfurt’s banking district. Looking at the mighty, mirrored bank towers, they asked themselves – Why do we actually need banks to lend money from person to person? Why can’t we bring borrowers and investors together directly through a digital marketplace? And, this is how the idea for Auxmoney was born. Since then, they have been working on making people independent of banks.

Founded in Dusseldorf in 2007, Auxmoney is an online P2P lending platform for personal loans. It allows private consumers to borrow personal loans by connecting multiple private investors. 

Through its platform, private and institutional investors directly invest in pre-approved borrowers of different score classes. Auxmoney claims that its investors achieve an average return of 5 per cent on their investment.

Its investment arm offers investors benefit processes, including fully automated onboarding, risk assessment, and investor reporting. With the latest iteration of its scorecard, leveraging advances in Machine Learning, Auxmoney facilitates investors’ access to a digital asset class.

Recently, Auxmoney also started offering loans to small and medium-sized enterprises. Renowned investors such as Index Ventures, Union Square Ventures, and Foundation Capital are invested in Auxmoney.

Raffael Johnen, CEO of Auxmoney, says, “With our investment platform, we are able to set up partnerships at scale, further broadening our base of institutional investors. Today, we are delighted to add another strong set of partners to the Auxmoney platform. With this significant investment, Auxmoney is able to bring the benefit of digital loans to even more consumers.”

Auxmoney charges borrowers a transaction fee for funded loan applications, but no more listing fees. Lenders pay a 1 per cent transaction fee on successful bids. The credit-experienced SWK-Bank takes over the loan processing for the users.

Recent growth and fundraise

Back in February 2021, The German fintech firm launched an investment arm in Dublin, Ireland, called Auxmoney Investments. Boudewijn Dierick was named as managing director for the new company.

In November 2020, Auxmoney reportedly secured an undisclosed amount of funding from the French bank BNP Paribas. The company raised this capital so that it can start buying loans on its own platform and looks to invest up to €500M in loans originated on its platform.

Previously in September 2020, the company raised €150M in a funding round which it claimed was the largest fintech funding round in the eurozone in 2020. The round was financed by investment firm Centerbridge.

Prior to that, in May 2014, the company raised $16M (approx €13.45M) in its Series B round of funding led by Foundation Capital. The round also saw participation from Partech Ventures, Scott Bommer, alongside existing backers Index Ventures and Union Square Ventures.

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