San Diego’s LoanHero Extends Seed-Stage Funding to $4.2M

LoanHero, which operates an online loan origination platform, said it has extended its seed funding, adding $2.5 million to the initial $1.7 million the San Diego-based startup raised last June.

Alsop Louie Partners, the early stage San Francisco venture firm, and Los Angeles-based Mucker Capital led the investment, according to a statement from the company. The company pegged its lending capacity at $20 million.

The additional funding is expected to enable LoanHero to grow its loan portfolio by more than tenfold over 2016. The company says it plans to expand nationwide and provide retail loans in sectors like furniture, auto repair, home improvement, and alternative health.

LoanHero’s business is focused on what it calls point-of-sale financing—offering consumers a variety of financing options at a checkout register when they are purchasing big-ticket items like funerals, appliances, and medical services. Using software-as-a-service technology, LoanHero says it can offer certain consumers interest rates below that of credit cards, and charge merchants lower transaction fees than credit card networks.

In the last six months, LoanHero says it has made thousands of loans to prime, mid-prime, and sub-prime consumers through 100 merchant partner retail sites in five states.

Entrepreneurs Derek Barclay and Kristin Slink founded LoanHero in 2014, and continue to serve as president and COO, respectively. An early angel investor, Zalman Vitenson, CEO of San Diego-based Integrate Financial, serves as executive chairman, and Stephen Connolly, a former CoreLogic (NYSE: [[ticker:CLGX]]) general manager, is CEO.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.