The Venture Codex

Participated · Series C · Jan 2023

PeopleFund operates a P2P lending marketplace that matches retail borrowers with investors and develops AI-powered risk management and credit-scoring systems. The company plans to use new capital to further advance its AI credit-scoring tech and to launch a B2B service providing customized AI-enabled credit scoring to financial institutions. As of December 2022 PeopleFund reported a loan balance of $264.3 million and total loans deployed of about $1.3 billion, with 20,688 borrowers and 2,943,883 lenders; year-over-year growth in borrowers was 56.7% and lenders 9.6%. The startup has previously raised equity and in 2022 secured $240 million in debt financing from Goldman Sachs, CLSA Lending Ark Asia and Bain Capital. PeopleFund reported it was making a loss and cut about 10% of staff in Q4 2022; it had nearly 150 people as of December 2021. The company was founded in 2015 and is based in Seoul. PeopleFund operates a peer-to-peer lending marketplace that connects near-prime and subprime borrowers with individual and institutional lenders, including through a partnership with Kakao Pay. Its core product is an AI- and machine learning-powered credit-scoring system (CSS 4.0) built on roughly 480,000 registered loan customers to optimize mid-rate loans. The company claims it has managed over $1 billion in loans as of October 2021 with a delinquency rate of 2.06% and average borrower interest rates around 11.25% per annum. Refinancing loans make up about 66% of its total loans, and lenders on the platform target roughly 6%–9% annual returns. PeopleFund says its data-driven underwriting produces a 3%–5% lower loss rate than other non-bank players and it targets Korea’s roughly $67 billion personal credit loans market. The company expects to generate profit in 2022 and plans to expand its AI and alternative-data capabilities to further personalize lending products. PeopleFund, founded in 2015, operates a peer-to-peer lending marketplace that connects borrowers and investors across consumer, SME, and mortgage/property lending. Consumer and personal loans represent around one-quarter of volume, SMEs 17 percent, and the remainder comes from mortgage and property loans including real estate developers. The company has reached about $300 million in loans to date and reported 823% annual growth in 2017, hitting a record monthly origination of roughly $31 million in September. September also saw a shift toward institutional capital, with 69% of loans provided by institutional investors that month. PeopleFund employs about 90 staff and plans to use the new funding to expand headcount—particularly R&D hires—and to further develop its credit-rating model and risk-pricing for loans and mortgages. The business previously raised $5.7 million in June 2017 and counts 500 Startups, Wooshin Venture Investment, D3 Jubilee and DAYLI Financial Group among its investors.