Santander InnoVentures, Santander Group’s fintech venture capital fund, has announced today it is leading the funding round (Series B) of CrossLend, the Berlin-based pan-European digital debt marketplace. The round also includes funding from existing investors Lakestar, ABN AMRO Ventures, and Earlybird.
Founded in 2014, CrossLend provides a digital debt marketplace for consumer, SME, invoices, mortgages and other forms of debt originated by banks and alternative originators. CrossLend makes the assets available to a wide range of institutional investors, such as banks, investment funds and insurance companies.
This allows loan originators to expand their origination capacity and increase income while at the same time it helps to reduce pressure from capital requirements. Institutional investors with the need to invest in fixed-income assets are provided with a broad range of new investable assets in a transferable form. This allows more capital to flow into Europe’s economy and makes the lending and investment ecosystem more efficient, transparent and profitable.
Santander InnoVentures, true to its “invest and partner” model, is exploring cooperation alleys with the company, as one basis for the investments were the significant cooperation opportunities. In light of the value-add that CrossLend can provide to banks and asset managers, more institutions are expected to join as equity investors over the next few months.
Santander InnoVentures’ investment comes as the European Commission’s capital markets union initiative is set to deliver an action plan by the end of 2019 to provide new sources of funding for businesses, reduce the cost of raising capital, increase options for savers across the EU, facilitate cross- border investment and make the EU financial system more stable, resilient and competitive(1). CrossLend’s digital debt marketplace infrastructure is closely aligned with core elements of previous EU action plans and already enables pan-European fixed-income investment in the absence of a true capital markets union.
Manuel Silva Martínez, partner and head of Investments at Santander InnoVentures, said: “By developing technology that digitises processes done manually today and building a regulatory infrastructure that allows for a truly pan-European platform, CrossLend is addressing several key opportunities: the ability for banks to mobilise balance sheet assets for regulatory capital optimisation, and connecting alternative originators and banks alike with new sources of capital in-market and cross-border, all of this seamlessly and profitably.
CrossLend has the opportunity to become an industry standard, interlinking capital markets in Europe and potentially elsewhere as they eye further international expansion. Oliver and his team have the right DNA to execute on this ambitious vision, and I am thrilled to actively support them in shaping it together.” Manuel will join CrossLend’s advisory board.
Oliver Schimek, CEO and founder of CrossLend, said: “Well-functioning debt capital markets are crucial for stability in Europe, yet investment banking in debt markets has mostly remained undisrupted through digitisation until now. The arteries of our financial system are clogged, leading to severe economic restrictions for companies and individuals in Europe. CrossLend re-wires the debt market in the spirit of the European capital markets union. We are already in conversations with further banks regarding joining the consortium of investors in the coming months, and we are very proud that Santander InnoVentures and ABN AMRO Ventures have already recognised CrossLend as the key driver of an efficient financing backbone for Europe’s economy.”