With $200 million in fresh funding, CircleUp is looking to back consumer retail businesses with no-equity loan alternatives to VC.
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CircleUp announced on Thursday that its credit division had secured more than $200 million in additional financing to back startups, with the money coming from investors including Michigan’s state pension fund and Pacific Life. The money represents a significant boost to CircleUp’s loans business, which has originated more than $300 million in loans since its 2017 launch.
Initially a marketplace that used data to identify fast-growing consumer brands and connect them with private equity and other investors, CircleUp raised a $125 million fundto make equity investments in companies directly.
As an alternative option from taking venture capital, CircleUp’s credit efforts aren’t alone. Payment processor Square offers its own loans through a lending unit, Square Capital, and PayPal and Amazon have also. Then there’s Clearbanc, a Canadian startup that offers its own twist on the equity-for-cash exchange. Clearbanc charges a 6% flat fee on the money it lends, which has so far primarily helped e-commerce companies purchase digital advertising.
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