Finlombarda Invests 1.5 Million in a Fund Promoted by P2P Lending October to Finance SMEs in Lombardy
In May 2020, the fintech company October launched a new direct lending fund dedicated exclusively to investments in loans to Italian SMEs offered on the platform. Finlombarda will invest up to $18.3 million (€15 million) in the real economy through the October SME IV Fund. Finlombarda’s investment in the vehicle is part of the Credito F.A.C.I.L.E. initiative
Finlombarda spa, the finance company of the Lombardy Region, will indirectly invest up to $18.3 million (€15 million) in the real economy through the October SME IV fund, promoted by October Factory SA, a company of the French fintech October (the former Lendix). The fund, operating in Italy, France, Spain, the Netherlands, and Germany, will intervene by employing in Lombardy an amount at least equal to the value of the investment made by Finlombarda.
October SME IV is an Eltif launched in July 2019 that invests in European private debt and is financed by issuing notes and that grants financing to SMEs and small-mid caps with registered and/or operational headquarters in Italy, as well as in other EU countries where the October Group operates through its digital lending platform. The use of the platform allows companies to obtain funding on the basis of a specific co-financing scheme, thanks to resources from the fund, fed by institutional investors and private lenders who identify the platform as an innovative and interesting investment opportunity that at the same time enables support for the real economy. Based on the vehicle’s funding target of $304 million (€250 million), a portfolio with a total number of transactions in excess of 500 is expected, with a size of between $36,000 (€30,000) and $6 million (€5 million).
Finlombarda’s investment in the vehicle is part of the Credito F.A.C.I.L.E. initiative, designed to meet the liquidity needs of Lombardy’s micro and small businesses and professionals, and is in addition to the more than $182.8 million (€150 million) made available to the fund by various institutional investors at European level, including CDP, the French Public Investment Bank (Bpifrance), the European Investment Fund (EIF) and the Spanish Official Credit Institute (ICO).
Michele Vietti, president of Finlombarda spa, said: “Credito F.A.C.I.L.E. is a concrete example of how a synergic action among all the actors of the financial ecosystem is the right way to relaunch the economy of our region, using financial instruments that are complementary to traditional financing. Among those already active at Finlombarda, we recall Minibond in partnership with other institutional investors and Elite Basket Bond Lombardia in co-partnership with CDP.”
Sergio Zocchi, CEO of October Italia, commented: “With this initiative, October’s commitment to supporting SMEs and the real economy continues. A strategic partner such as Finlombarda allows us to make available to Lombardy companies not only financial resources but also experience and technology, creating the conditions for a fruitful collaboration between institutional and private actors for the benefit of companies.”
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October was founded in 2014 under the name of Lendix
October, with over $487 million (€400 million) of financing provided to more than 840 companies globally (Italy, France, Spain, Netherlands, and Germany), is the leading online financing platform for SMEs in continental Europe. Founded as Lendix by Oliver Goy in 2014, late October 2018 the company changed its name to October. The platform is active in five countries, including Italy. Indeed, territorial expansion was one of the first goals mentioned by October in June 2018, when it announced its latest $39 million (€32 million) funding round from venture capitalists and other investors (including Carlo De Benedetti’s CIR).
With more than $706 million (€580 million) of funding disbursed and distributed over more than 1,400 total projects (data as of the end of May 2021), October is the leading SME lending platform in continental Europe. Operational in Italy since May 2017, in our country October has today financed 501 entrepreneurial projects for over $179 million (€147 million) (data as of the end of May 2021).
In October 2020, the French fintech allocated another $243 million (€200 million) to support Italian SMEs affected by the effects of the coronavirus. The initiative was made possible thanks to the structuring of a securitization transaction of loans provided to businesses by October, which saw the Intesa Sanpaolo Group in the dual role of arranger and senior investor, and the important sponsorship of an international investment fund that played the role of equity investor.
In September 2020, October signed a partnership with Enel X, the Enel Group’s global business line dedicated to innovative products and digital solutions. In July 2020, October launched instant lending for SMEs, which, thanks to predictive credit risk analysis, allows a fully automatic assessment of loan requests between $36,500 (€30,000) and $304,000 (€250,000) and covered by a state guarantee.
In May 2020, the fintech company launched a new direct lending fund dedicated exclusively to investments in loans to Italian SMEs offered on the platform. October had already announced the first closing at $36.5 million (€30 million) thanks to the collaboration with five Confidi members of Federconfidi and Rete Fidi Italia and with the European Investment Fund. In particular, the subscribers are Neafidi, Confidi Systema!, Fidimpresa Italia, Confidi Sardegna and Confidi Centro.
(Featured image by holdi2017 via Pixabay)
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