Lender Dealstruck Plans Expansion With $58M Equity, Credit Funding
Dealstruck, the San Diego-based lender to small- and medium-sized businesses, announced it has raised an $8.3 million round of equity funding led by Trinity Ventures and a new $50 million credit facility led by Brevet Capital Management.
The new financing brings Dealstruck’s lending capacity to more than $100 million, the company said, and will be used to lend more money to small businesses nationally. Since its launch in October 2013, the company has made more than $50 million in loans.
Dealstruck offers loans of between $50,000 to $250,000 to qualifying small- and medium-sized businesses—typically those that have more than $20,000 in revenue, the company says on its website. Dealstruck’s roots are in crowdsourcing the loans from accredited investors, rather than operating solely as a direct lender to the businesses, as Xconomy’s Bruce Bigelow detailed during an interview with CEO Ethan Senturia in 2013.
Dealstruck’s business has migrated from being a pure peer-to-peer lender, however, and now primarily funds loans from its own balance sheet and institutional investors, Senturia wrote in an e-mail after Wednesday’s announcement.
The company has customers in 43 states and offers three base product: a term loan, an asset-based line of credit, and an inventory line of credit. Duration of the loans ranges from six to 48 months, and the interest rates are slightly higher than that of a bank, in the low teens, Senturia wrote.
Dealstruck is a part of an active alternative lending market, with new entrants such as Fundbox, which offers short-term loans for a single fee, and more established public companies such as San Francisco’s Lending Club (NYSE: LC) and New York-based On Deck Capital (NYSE: ONDK). Palo Alto, CA-based Upstart makes loans to 20-somethings who may need funding for a startup or are looking to consolidate debt, as Xconomy’s San Francisco Editor wrote in December.
Brevet Capital is a New York-based hedge fund that also makes direct loans to small- and medium-sized businesses. Trinity Ventures, focused on early stage tech companies, is based in Menlo Park, CA.