Earlybird’s smava in €4m financing round

The online ‘social lending’ marketplace has attracted further finance from existing backer Earlybird and new investor Neuhaus Partners, which will position the platform alongside US and UK competitors, according to the firm.

Two German venture capital firms, Earlybird and Neuhaus Partners, have between them invested €4 million ($5.4 million) in smava, a web platform which allows individuals to arrange ‘person to person’ loans.

smava, which is based in Berlin, will use the additional capital primarily for product development, marketing and internationalisation.

smava: €4m lent already

With this investment smava “belongs to the leading worldwide social lending platforms, alongside internationally established companies Prosper in the USA and ZOPA in the UK,” the firm said in a statement.

The website connects individuals both looking for loans and seeking investment opportunities. Revenue is generated through a one-time 1 percent fee from the borrower when the loan is funded, while lenders use the service for free. It was launched in March 2007 and has now facilitated more than €4 million in loans.

Earlybird is a generalist venture investor, based in Germany and primarily targeting investments in German-speaking countries. This investment is made from its €127 million fourth fund, which is around 30 percent invested.

The firm is expected to raise its next fund during 2009.

Neuhaus Partners is a Hamburg-based technology-focused venture firm investing across Europe. The smava investment is made from Neuhaus’ third fund, which is now around 50 percent committed.