Stepping from the shadows, EVEN Financial—based in New York—is putting money it raised towards becoming a fixture in the fast growing peer-to-peer lending market.
The startup came out of stealth today with $2.8 million in a round led by Canaan Partners, with Brooklyn Bridge Ventures, Conversion Capital, Social Leverage, 555 Capital, and Lerer Hippeau Ventures participating. Individual investors Rob Suber, president of Prosper; and Orchard Platform’s Jon Kelfer also backed EVEN.
In short, peer-to-peer lending is a sort of financing between two parties, but without a bank or other traditional institution processing the deal.
There are a lot of companies chasing one aspect or another in peer-to-peer, also called direct, lending including New York-based Orchard Platform, which develops analytics and investment software.
EVEN Financial uses data to connect lending marketplaces with more borrowers and verified potential lenders. This a service that CEO and co-founder Ian Rosen says companies need as the industry scales up. “There are more than 100 marketplace lending platforms in the U.S., and that number was closer to 50 a year ago,” Rosen says.
The sector could grow even faster, he says, because the demand among investors for marketplace debt is much higher than the supply. By adding EVEN to the mix, Rosen says his company could help borrowers get better rates on their loans by letting lenders get to know them by using rich data and not just credit scores.
The software developed by the company solves problems that lending marketplaces do not have expertise in and, by Rose’s assertion, do not want to tackle. Rather than be yet another competitor to the likes of Orchard Platform and Prosper, EVEN Financial works with such companies.
“One of my co-founders was a co-founder at Orchard,” Rosen says. Among EVEN’s advisors are Matt Burton, CEO of Orchard, and Prosper’s Suber.
Before co-founding EVEN, Rosen was general manager for financial information site MarketWatch. Another co-founder Phill Rosen (no relation) was co-founder of Orchard. Co-founder Jarid Magid was an early executive with Admeld.
EVEN is made up of the three co-founders at the moment with others committed to join in the next month, Rosen says. The company has plans to grow to 10 to 15 people with one year.
