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NerdWallet acquires small business loan marketplace Fundera
Financial guidance company NerdWallet announced at the end of last week that it has acquired Fundera. New York City-based Fundera was co-founded in 2013 by Jared Hecht, who previously co-founded GroupMe. It created a marketplace where small businesses could find loans, subsequently expanding into other areas like legal services, while also (like NerdWallet) offering free financial content.
“It can be the wild wild west out there for small business owners,” Hecht said in a statement. “Finding the financial products and the guidance needed to start, grow and fund their businesses can be very challenging, and most small business owners don’t have a resource or partner to support them along their journey. Bringing transparency to this process and educating, empowering and advocating for business owners is so similar to what we see NerdWallet doing in the consumer space.”
And of course, small businesses may be in particularly dire need of assistance now, given the impact of the pandemic.
According to the announcement, Fundera will operate as a subsidiary of NerdWallet, with the entire team making the transition. The goal is to help NerdWallet expand into the small- and medium-business market with both content and actual financing.
“Although we offer free tools and content, we’ve never been able to fully support small business owners — that changes today,” said NerdWallet co-founder and CEO Tim Chen. “Fundera has been one of our partners for several years and their deep understanding of the SMB market, the long-standing, trusted relationships they’ve built with both lenders and business owners, and their commitment to putting the needs of small business owners first is really unique and impressive.”
The financial terms of the acquisition were not disclosed. Fundera had raised $18.9 million in funding from investors including QED Investors, Khosla Ventures, First Round Capital and Susquehanna Growth Equity, according to Crunchbase.
This is NerdWallet’s second acquisition of 2020, having previously acquired U.K.-based Know Your Money. The company says it’s been growing and profitable for the past several years.
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Video and messaging enable remote work. But is it right for your company?
David Cancel is the CEO and founder of Drift. He is a five-time founder, two-time CEO, podcast host and best-selling author of Conversational Marketing. Follow him on Twitter @dcancel.
More posts by this contributor
Four-day work week. Open-plan offices. Work-life balance. Remote work. There are endless ways to set up your team and company for success. And there’s evidence for and against all of these scenarios.
Take remote work for instance. Owl Labs reports that 44% of global companies don’t allow it. While Gallup reports that 43% of all Americans work remotely at least some of the time.
So what’s the right answer? Well that depends on what your goals are. But no matter what, the important thing is to make a decision and stick with it.
Because no matter what decision you’re making – personal, professional, big or small – it’s important to commit 100%. And when that decision is likely to impact your company’s culture for years to come, you better hope to get it right.
So when Buffer’s co-founder and CEO, Joel Gascoigne, decided to close down one of their offices, I gave him one key piece of advice. Commit to either placing the entire team in the remaining office or establish a 100% remote workforce. Both scenarios can work, but a mix of the two will only set you up to fail.
When everyone is remote, that becomes one of the defining characteristics of a company’s culture. People have no option but to get their work done and collaborate virtually. And an entirely remote culture can both draw in candidates attracted to this way of working and remove those who know they won’t be able to thrive working remotely.
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Which type of funding is actually best for your business?
Jared Hecht is the co-founder and CEO of Fundera, an online marketplace for small business financial solutions including small business loans. Prior to Fundera, Hecht co-founded group messaging app, GroupMe.
When starting a tech company, there seems to be a playbook that most entrepreneurs follow. While some may start with a bit of bootstrapping, most will dive straight into raising seed money through investors. In many cases, this is a great path. It’s a path I’ve taken twice myself, first with GroupMe, and then again with Fundera.
Ironically, though, my second venture-backed company is a business focused on helping entrepreneurs find debt financing—a process I’ve gone through only once myself. But after five years of building and scaling this business, it’s made me take a step back and consider the question of when and where debt financing might be a better option for a business than equity financing, and vice versa.
I view these financing vehicles differently now than I did half a decade ago, and think it’s time we start to think a bit wider and diversely about how we finance our growing endeavors.
After all, when entrepreneurs take venture capital, they usually sign up to provide a 10x return on an investor’s capital. This expectation ultimately influences how they operate their business in the short-term. Maybe they’re not always ready for that expectation.
Or maybe they know they need to focus on building a good business before a great one. In this case, debt may be the better vehicle, where the only expectation is to pay it back.
Whether it’s money to get your business off the ground, capital to fuel additional growth, or cash to cover a gap, and whether you’re guiding the growth of a burgeoning startup, a smaller business, or even consulting firm helping other entrepreneurs, you should think critically about how you finance your business.
Here’s what to consider.
The power of debt
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Fundera Picks Up $11.5 Million In Series B Funding
Fundera, the online credit marketplace that helps small business secure loans started by GroupMe cofounder Jared Hecht, has today announced the close of a $11.5 million Series B funding round led by Susquehanna Growth Equity with participation from existing investors including QED Investors, Khosla Ventures, and First Round Capital. Alongside the funding, SGE’s Scott Feldman and… Read More
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Fundera Has Secured $12M In Funding For More Than 300 Small Businesses
Fundera, the lending match-maker for SMBs, has helped secure funding for over 300 small businesses, with more than $12 million in loans funded. The company originally launched in February 2014 as a service that paired SMBs looking for a loan with the lenders who could help them out. In the beginning, it was simply a matching service, but over the course of 2014 the company has transformed into… Read More
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