Korean P2P lender Terafunding raises $18m in series B round

South Korea-based peer-to-peer lending platform Terafunding has announced the completion of its US$18 million series B funding round that it closed in August.

Photo credit: Tera Fintech

Financial firms KB Investment, Hana Ventures, IBK Industrial Bank, and Woori Bank have become shareholders following the fundraise. Proptech investor Woomi Construction also participated in the round as a strategic investor to collaborate with Terafunding in the small- to mid-sized residential development industry.

Typically, developers in South Korea are forced to rely on private financing, as interest rates can be high – often over 30% per annum. Terafunding seeks to provide reasonable financing solutions for these firms, which have limited access to loans from financial institutions.

The P2P lending firm said it will use the new funds to acquire more talent from the real estate, finance, and IT sectors, while further developing its project screening systems and risk management processes.

It claims to be the first real estate-focused P2P lender in South Korea, growing at a rate of 16% per month since its establishment in 2015. According to a statement, Terafunding has originated more than US$700 million worth of loans on a cumulative basis and fully repaid around US$500 million as of July 31.

The firm’s latest fundraise comes as the South Korean government seeks to regulate the burgeoning P2P lending market in the country. The sector has seen a “drastic” growth in recent years, with accumulated lending jumping to US$4.3 billion in 2018 from US$504.3 million two years prior, according to local media.