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P2P Lending Platform, Bitbond Raises $1.2 Million in Funding
Bitbond, a peer-to-peer Bitcoin lending platform, has raised $1.2 million in equity capital to expand their business globally. The web platform enables users to lend and borrow Bitcoin to each other. The loans are used to finance small to medium sized business and the borrowers are able to make returns on their investments according to the risk involved. With this new investment, the Berlin-based startup has raised $2.3 million in capital to date.
Bitcoin peer-to-peer lending platforms are useful for people who need financing for their business or want to start new ones. It also works as a form of microfinance, giving access to financial services, like credits and savings, to those who wouldn’t be able to afford it.
The $1.2 million in funding was made from a group of angel investors, some of whom were already previous investors of the company. The funding round was led by Şekip Can Gökalp, founder of Mobilike, and included other investors such as the Fyber founders, Janis Zech and Andreas Bodczek, and also the CEO and co-founder of Kreditech, Alexander Graubner-Müller.
The investment comes during a time of turmoil in the bitcoin peer-to-peer lending market. Due to government regulatory requirements BitLendingClub, a Bulgarian based p2p lending platform, announced it would be closing down the business and BTCjam stopped serving its US clients. Fortunately, in October of 2016, Bitbond received a regulatory license by German financial services supervisor BaFin, making it one of the first and only regulated blockchain based financial services providers.
Bitbond representative, Chris Grundy, says the funding will be used to develop the business and expand into new markets, increasing the platform`s user base. The vision of the startup company is to make lending and borrowing globally accessible, and it has been successful in doing so. Since it’s launch, the platform lended $1.2 million over 1.600 loans and it has over 76.000 users from 120 different countries.
Most of Bitbond borrowers are online sellers on e-commerce marketplaces like eBay or Amazon. Bitbond conducts a credit check on the loaners, based on their revenue data for funding inventory, and recently launched an automated scoring mechanism that is analysing historical data, evaluates the creditworthiness of borrowers. According to the credit score attributed by the mechanism, the interests might be lower or higher.
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