Tuesday 17 October 2017

Grid Finance seeks to expand abroad after raising €3m in funds

Equity boost will help the alternative lender look beyond Ireland to international markets, says Gavin McLoughlin

Grid Finance chief executive Derek F Butler
Grid Finance chief executive Derek F Butler
Gavin McLoughlin

Gavin McLoughlin

Alternative lender Grid Finance has raised €3m of equity from Luxembourg-based Reech Corporations Group.

The investment - which comes via Reech's financial services and technology venture capital arm Odysseus Investments - will see the Luxembourg company become Grid's largest external shareholder.

Christophe Reech, a former derivatives banker who founded the Luxembourg company, is joining Grid's board as a non-executive director.

"This is a very scalable business with potential to move beyond Ireland into other markets. I am confident that with the benefit of our experience and know-how in creating and scaling innovative businesses, Grid Finance is destined for great things over the coming few years," Reech said.

Grid's chief executive, Derek F Butler, said the deal "will allow us to propel our business to the next level by investing in our proprietary technology and market penetration in Ireland and other international markets".

Grid provides loans to Irish businesses via its online marketplace which matches firms with individuals seeking to lend money at a return.

Other products include invoice discounting, leasing and short-term cash flow loans secured against money owed to the borrower from credit and debit card transactions.

It is working on a product that will allow investors to build a portfolio based on their investment goals.

It has also been backed by US venture capital firms, Enda O'Coineen's Kilcullen Kapital, and Enterprise Ireland. The company has its own proprietary credit score system known as the Grid Score, which it uses to advance money to businesses that are struggling to raise funding from banks.

Thus far, it has helped more than 2,000 businesses to raise money, and hopes to grow that to 25,000 and €1bn of lending in the coming years.

"We think Grid Finance is a great business with excellent prospects. We particularly like the way the business is addressing a real need, meeting the demands of a sector which is poorly served by traditional lenders. We also like the way the business is anchored in the community through its strong local links," said Odysseus Investments' managing director, Hansjoerg Borutta.

Odysseus Investments was advised on the transaction by LK Shields and Grid Finance by Philip Lee. Other companies in Odysseus' portfolio include Moola, a UK company using robotic technology to provide consumers with access to investment products.

The company said it is continuing to hunt for investment opportunities as it seeks to find fintech startups "with potential to achieve real scale at exceptional levels of profitability".

Reech's other operations include a corporate finance advisory business focused on emerging markets. It also manages commercial and residential property assets.

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