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Innovative small business lender iwoca has raised £150m in new equity and debt capital, bringing its total funding to £350m.

Its most recent fundraising included investment from Augmentum Fintech, the specialist fintech venture capital investor, NIBC Bank and Prime Ventures, along with other funders.

The capital raised will be used to fund small business owners across iwoca’s markets in UK, Germany and Poland; iwoca reached profitability in 2018, while doubling its revenue in each of the last three years.

Since launch, the fintech has funded more than 25,000 businesses, but Christoph Rieche, co-founder and CEO of iwoca, said the business is on track to fund 100,000 small businesses in the next five years.

He said: “iwoca continues to grow rapidly while bank lending to small companies has dwindled. Our mission is to help one million small businesses succeed by opening up access to finance.

“This fundraise enables us to empower many more small businesses and we are excited that we could win Augmentum Fintech to join our next phase of growth.”

Growth for iwoca comes amid continuing reports of major banks retreating from lending to smaller businesses.

Asset Finance International reported recently that UK bank lending to small and medium-sized retail businesses fell 4% in November last year compared to the same period in 2017. The drop came despite larger retailers seeing finance levels increase 5% over the same period.

iwoca provides loans of up to £250,000 (€285,000) to small and micro businesses via its website and through its lending API and Open Banking, using digital solutions to slash the time and paperwork required to approve funds.

Last year, it connected its platform to three of the UK’s leading banks, Barclays, HSBC and Lloyds, through Open Banking, allowing businesses to provide information about their accounts in seconds to support lending applications.

Since its launch, iwoca has lent more than £600 million, with 70% of its lending decisions automated.

Its innovation led to the funder receiving a £100,000 prize in the Open Up Challenge from innovation foundation Nesta last year.

Tim Levene, CEO of Augmentum Fintech, said: “As an SME lender, iwoca is unique for its scale in both the UK and Germany. The factors that underpin iwoca’s success are difficult to achieve in combination. We are confident that iwoca will emerge as one of the few winners in the SME non-bank lending space.”