OnDeck plan to use their latest round of funding to expand its marketing reach.
Noah Breslow, CEO of the New York-based alternative lending company OnDeck has conscripted an additional $77 million in venture capital, which has been earmarked for spreading their domestic marketing network as well as expanding internationally and diversifying their range of services from the existing single loan product.
Leading the way in this latest round of funding are Tiger Global Management while a number of existing investors have also participated, amongst them First Round Capital, Google Ventures, Institutional Venture Partners, RRE Ventures, SAP Ventures, Industry Ventures as well as angel investor Peter Theil.
This latest round of funding means that OnDeck have succeeded in raising over $180 million in equity since they were founded in 2007.
According to Noah Breslow, OnDeck are rapidly approaching a major milestone in the development, with the successful provision of just under $1 billion in loans to small businesses nationwide in the last seven years.
2013 was an excellent year for OnDeck, which saw them more than double their revenue to $65 million, with the company projecting that they will double their revenue again in 2014
OnDeck have become among the market leaders in providing short-term alternative finance to small businesses that otherwise may not qualify to receive loans from traditional sources. The general procedure for applying for a loan from OnDeck entails, almost immediate decisions to go ahead or not, and if approval is granted then the funds are in the client’s bank with them 24 hours.
Noah Breslow admitted that the decision to raise more capital was only made at the beginning of the year, with discussions from potential investors moving fast with all the detail settled within a total of six weeks. .
This follows an increasing trend among venture investors who are prepared to invest hundreds of millions and financially based startups, especially those capable of leveraging large quantities of business orientated data that allow them to make rapid and hopefully prudent decisions on providing short-term finance, which can be particularly lucrative. OnDeck’s founder Mitch Jacobs is responsible for the development of the company’s loan evaluation software.
Unlike the traditional banking system, OnDeck evaluates business performance rather than the borrower’s personal credit history with the company also priding themselves in being capable of rapidly gathering up-to-date information relating to the financial credibility of small businesses from a variety of sources including details of their bank transactions as well as accessing the major social networks and review sites.
Once all that information has been gathered, the company uses proprietary software to aggregate all of data regarding the applicant’s business’ history, with an algorithm processing the data and almost immediately determining whether or not the business will be approved for a loan, which loans can vary from $5, 000 to $250, 000.loans, with repayment time running between 3 to 24 months.
In an increasingly buoyant market Noah Breslow pointed out that the company’s biggest obstacle to date and the reason why On Deck decided to conscript additional finance is to increase the the extent of your marketing coverage outside of the principal areas of operation in New York and the East Coast, to all of America as well as Canada, possibly mainland Europe and the United Kingdom
Breslow went on to add that access to lending capital is far from being problematic, with On Deck having succeeded in raising in excess of $300 million in debt financing from Goldman Sachs, Deutsche Bank among a number of others, with almost unlimited funds available if need be.
Noah Breslow graduated with a bachelor’s degree in computer science and engineering from the Massachusetts Institute of Technology MIT later going on to gain an MBA with distinction from Harvard Business School.
After gaining experience in the world of business both in the United States and United Kingdom, Breslow joined Tacit Networks, who were involved in the development and supply of enterprise IT products, rising to the position of Vice President of Marketing and Product Management, as well as being a key player in masterminding the company’s growth and eventual sale to Packeteer in 2006.
Noah Breslow joined Mitch Jacobs at On Deck the following year and was in actual fact, the company’s first employee, in a workforce that has now grown to number two hundred and fifty, and is liable to be rising faster in the very near future.