Funding Circle, a U.K.-based peer-to-peer loans platform that lets small businesses connect with individuals for funding, has acquired U.S.-based stealth startup LeapPay to speed up its ability to approve loans, according to according to TechCrunch.
The price of the acquisition wasn't made public. But Funding Circle is primarily interested in LeapPay's underwriting technology, which will help Funding Circle vet and ultimately approve businesses and potential backers more quickly. That tech, which integrates with products like Quickbooks, Freshbooks and Xero, will be put to use immediately to let Funding Circle offer a wider variety of loans, said Sam Hodges, Funding Circle’s co-founder and U.S. managing director.
The company expects to cut its current approval time of about a week by 30 percent, and expects the acquisition to help it expand in the U.S.
Funding Circle will also get LeapPay's technology for offering loans with invoices as collateral, put won't use it for the moment. It also won't put LeapPay’s three co-founders to work. David Golden, Allan Fisch and Alex Kress, who have experience in areas such as hedge funds, will go on to new ventures instead of joining Funding Circle.
Along with quicker approval of a wider range of loan terms, Funding Circle hopes to expand it business in other ways with the acquisition. The company has a commercial property loans business in the U.K., but not in the U.S. "We think there is an opportunity there," Hodges said.