Digital lender Selina Finance raises GBP42 million in Series A round
Digital lender Selina Finance has completed a GBP42 million Series A fundraise, which includes GBP12 million in equity and GBP30 million in debt lines.
The equity funding, raised from a range of leading fintech investors including Picus Capital, Global Founders Capital and others, will enable the business to accelerate its growth plans and investment in technology as it prepares to enter the consumer lending market later this year, subject to regulatory approval. In addition, the London-based fintech has secured GBP30 million in debt lines that will be used to support more SMEs and, post-regulatory approval, consumers across the UK.
Founded in 2019 by Andrea Olivari, Hubert Fenwick and Leonard Benning, Selina Finance offers overdraft-style credit facilities up to GBP1 million which allow SMEs and consumers to borrow against the equity tied up in their homes or investment property. In contrast to existing providers, the solution is feeless – with no setup, early repayment, or valuation fees - and, unlike conventional term loans, has built-in flexibility: borrowers can draw (and repay) funds whenever they choose, and pay interest on what is outstanding. Selina Finance's credit facilities are secured against physical property, meaning customers can borrow much larger amounts (up to GBP1 million) at more competitive rates (starting from 4.95 per cent APR) versus unsecured loans.
“We’re bringing a completely new product to the lending market which, unlike a conventional loan, offers customers real flexibility. Our customers can save time and money by only drawing down and repaying when they need to without the need to re-apply, plus the product is feeless and transparent which is what customers have come to expect in the 21st century.” explains one of the co-founders Leonard Benning.
Selina Finance’s highly automated platform allows borrowers to go from application to funding in less than 5 days, and the process is entirely online. Advanced proprietary technology powers the valuation and underwriting process, enabling loans without the need for property surveyors or other face-to-face visits. The new funding will be used to develop this technology even further, making access to credit for property owners more seamless.
“Homeowners deserve to be able to unlock the value tied up in the home they’ve worked so hard for, both at an affordable price and in a flexible manner. We want to help people tap into their real estate wealth whenever they need to borrow funds, by making the whole process, from application to funding, as seamless and as fast as possible,” adds co-founder Hubert Fenwick.
Demand for Selina Finance’s product, which is aimed at borrowers with a strong credit profile and positioned as a cheaper and more dynamic option to an unsecured loan, has continued during the UK lockdown. The company is still hiring despite the Covid-19 disruption, with all operations continuing remotely.
Selina Finance works with more than 200 commercial finance and mortgage distribution partners across the UK and is planning to offer its product to UK consumers later in 2020. Since lending started last year, they have recorded zero defaults and no arrears.
Co-founder Andrea Olivari says: “This Series A funding is a significant milestone in Selina Finance’s mission to offer homeowners flexible and affordable credit. Despite the uncertainty and disruption caused by Covid-19, our investors have demonstrated their belief in our unique proposition and the team we have built to bring our vision to the UK market.”
Robin Godenrath, Managing Director at Picus Capital, adds: “Selina Finance is bringing much-needed innovation to the UK lending space by allowing customers to access the equity locked up in their residential property, seamlessly and on flexible terms. The team impressed us with their strong focus on building a fully digital customer experience and have already achieved great product-market fit with their business loan use case. We’re excited and confident that Selina’s consumer proposition will also become an attractive alternative in the consumer lending space.”