An online lender, based in north Wilmington, has raised $75 million in its latest funding round.
Marlette Funding, LLC markets Best Egg unsecured personal loans through Best Egg, which was launched in March 2014. The site offers loans with interest rates as low as 5.9 percent.
Jeffrey Meiler, a former credit card executive with the Delaware credit card unit of Barclays is CEO and founder of the company. Meiler held management positions in the US and overseas for Barclays and its predecessor Juniper, one of the nation’s first online banks.
Meiler also headed a retail power marketer that was later acquired by power plant owner NRG.
Marlette aims to invest in its own loans with proceeds.
The funding round was led by Invus Opportunities, a private equity firm. Investors included Navient, the Wilmington-based student loan management, servicing and asset recovery company, as well as existing investors.
Privately held Marlette anticipates closing more than $450 million in debt facilities later this summer with several financial institutions.
“We are very excited to partner with Marlette Funding, an emerging star in this multibillion dollar, online lending market,” stated Ben Tsai, a partner at Invus Opportunities. “We were attracted to the transformative market opportunity, the executive team, the unique approach, and the remarkable results that Marlette has achieved since its inception just over a year ago.”
The investment of $75 million comes after reaching the $1 billion mark for loans originated through its flagship product, Best Egg, Marlette announced.
The company noted that a recent article in Lend Academy described Marlette as the fastest-growing marketplace lender. Marlette’s 2015 loan originations have already far exceeded its 2014 full-year total of $383 million.
Also, the company is profitable on a GAPP (Generally Accepted Accounting Principles) basis so far in 2015 and has broken even on a cumulative basis.
“We are thrilled to collaborate with two marquee investors to deliver simple and efficient products and services to the consumer market. The investment caps a highly successful first 16 months,” said CEO Meiler “Being able to lend on our own balance sheet is significant. It signifies to our buyers that we have confidence in the quality of our loans and positions us for success as the market evolves and matures.”
A $3 trillion consumer lending market is now on the cusp of technological transformation, according to the company. “To date, most people have received credit from traditional financial institutions such as banks, credit card companies, and credit unions, but now are turning to secure, simple and efficient online lending platforms. Marlette is leading this revolution by leveraging years of experience in the finance industry as well as cutting-edge technologies,” a release stated.
Marlette does have competitors that include San Francisco-based Lending Club, which offers unsecured loans to businesses and individuals via an online delivery system.
Unsecured lines of credit, often with fixed interest rates, have long been a product line with credit card lenders. Lenders target customers with multiple balances with high interest rates and good credit scores.
A variation on the theme is the use of balance transfers by credit card issuers. Typically, balance transfers come for a limited period of time, with interest rates rising after a year or so.
Concerns have been raised on the risks involved in the online loan industry, although companies say problem loans have been within their projections.
Delaware has other early and mid-stage companies in the online lending space.
Swift Capital, based in north Wilmington, provides loans for businesses and College Avenue, a student lending website, was launched earlier this year in Wilmington by former executives of Sallie Mae, based in Newark.
