Lendify Secures $115 Million to Help Fund European Expansion.

Sweden Lendify

Lendify, a Swedish digital lender, is ready to expand across Europe after striking a new financing deal.

The company secured 1 billion kronor ($115 million) from Insight Investment, which last year lent it 1.5 billion kronor.

Chief Executive Officer Nicholas Sunden-Cullberg says he wants to use the money to make sure Lendify dominates the consumer-loan market. “Households shouldn’t have any reason to consider any other loan provider,” he said by phone. “We will offer the best price and the best customer experience.”

The company, which has relied on on peer-to-peer lending and institutional capital for funding since it was founded about half a decade ago, has a loan book of around $300 million, and roughly 40,000 active savings and loan customers.

One of Lendify’s main goals is to prepare its proprietary credit model for other European markets.

“We want our model to be independent from local credit reference agencies within a couple of years, and that would both provide us with a stronger position in Sweden and also allow us to export it to new markets,” Sunden-Cullberg said. “That requires data sources that aren’t local, such as transactions on bank accounts.”

For now, the company has yet to turn a profit. “We have earlier said that Lendify will become a really great company first after we’ve been through a deep recession,” the CEO said. “We’ve had markedly better credit performance over the past two quarters than we had expected when the pandemic emerged.”

Lendify’s credit losses year to date are “slightly below the average of the niche banks in Sweden,” he said.

Earlier this year, the lender had planned to raise more than 700 million kronor in fresh capital in anticipation of winning regulatory approval to become a credit market company (which would enable Lendify to offer savings accounts). But that approval never arrived, and the timetable for raising capital was delayed.

Lendify’s subsidiary, Lendify Technologies, has a krona-denominated FRN maturing in May 2021 and doesn’t plan to tap the bond market again, as it they “can get cheaper funding elsewhere,” Sunden-Cullberg said.

The company’s biggest owners include Hakan Roos (an early investor in Izettle), Martin Gren (the founder of Axis Communications and Inbox Capital), Richard Goransson (from the founding family of Intrum) and John-Christian de Champs (the founder of Lendify).