46460

On Deck raises additional $17M to fund Main Street

The company adds $17M to its Series D round, bringing the round to $59M total

Financial trends and news by Faith Merino
May 1, 2013 | Comments
Short URL: http://vator.tv/n/2f30

We all like to root for the little guy, which is why it’s easy to get behind small businesses. Small businesses account for more than 50% of the non-farm private GDP, and they make up 75% of the net new jobs in the U.S. But they’re up against steep competition from big box retailers and others who have the resources to compete more effectively. To help Main Street businesses get the capital they need so they can focus on running their businesses, there’s On Deck.

Three months after raising $42 million in a Series D round led by Institutional Venture Partners, On Deck is tacking on another $17 million from Google Ventures, with help from Peter Thiel and Industry Ventures. That brings the company’s total to approximately $100 million since its inception in 2007.

Currently, many small business owners are forced to take out personal loans to fund their businesses—which means their own personal credit score determines the final verdict. On Deck, on the other hand, focuses on cash flow rather than the applicant’s credit score, and it leverages big data to evaluate a business’s health. If personal credit scores determined the fates of all businesses, we wouldn’t have Pandora today (Tim Westergren famously maxed out 12 credit cards while struggling to keep Pandora afloat in those early years).

More importantly, On Deck emphasizes speed: businesses can apply for a loan, get approved within minutes, and get funded the same day. Businesses can apply for three to 18-month loans of $5000 to $150,000. On Deck makes loans to businesses that have been operating for at least one year and are generating between $100,000 and $5 million a year.

To date, On Deck has issued over $450 million in loans.

On Deck’s own health has proven to be quite robust. The company saw 1,233% growth in revenue between 2008 and 2011, from $1.5 million in 2008 to nearly $20 million in 2011.

CEO Noah Breslow says that the extra capital will “accelerate our product development and marketing initiatives as we try to reach more small business owners around the country.”

"On Deck has found an efficient way to connect millions of small businesses around the country with the working capital they need to grow their companies," said Google Ventures partner Karim Faris, in a statement. "We invested in On Deck because we believe in the team's game-changing vision, strong talent and disruptive technology."

 


Related news


blog comments powered by Disqus