" class="no-js "lang="en-US"> Luxembourg Future Fund and Promus Ventures Invest in CrossLend - Fintech Finance
Friday, March 29, 2024

Luxembourg Future Fund and Promus Ventures Invest in CrossLend

Berlin-based FinTech CrossLend has attracted further prominent investors. The company announced investments from the LFF (Luxembourg Future Fund) and US-based Fund Promus Ventures.

The Luxembourg Future Fund, which is set up by the European Investment Fund, part of the European Investment Bank group, and Société Nationale de Crédit et d’Investissement (SNCI), a public-law banking institution specialized in medium and long term financing of Luxembourg based companies, decided to invest in CrossLend, due to the Start-up’s potential impact on the Luxembourg financial landscape, among other factors.

Promus Ventures is a venture capital firm based in Chicago investing in visionary software and hardware companies mostly in the U.S. and Europe.  The firm has invested in more than 55 private technology companies, including areas such as artificial intelligence, space, robotics, machine learning, computer vision, VR/AR, connected car, healthtech, fintech, insurance, and others.  Promus Ventures focuses mostly on early seed and Series A stage rounds and has invested in such innovative companies as Kensho, Spire, Navdy, AngelList, Mapbox, Rocket Lab, Airware, Layer, June, Swift Navigation, Whoop, CrowdFlower and others.

CrossLend has pioneered the securitisation of individual loans into bonds via a Luxembourg securitisation vehicle. CrossLend is authorized and regulated by the CSSF.

CrossLend helps lending banks or alternative lenders by allowing them to partially offload loans via the CrossLend platform on a single loan basis. This way banks can shrink their balance sheets. Investors can invest in the bonds via the CrossLend platform and thus co-invest into the banks’ origination. Tighter equity regulations are increasingly reducing banks’ lending capacities, with the result that ever more loan requests are rejected although the respective borrowers have sufficient credit worthiness. While banks gain stability through these measures, the European economy is weakened – as middle-market companies in particular are in need of loans. At the same time, institutional investors lack access to adequate fixed-income investments. The EU Commission has already pinpointed the problem with its call for the creation of a capital market union. “CrossLend wants to help creating such a capital market, by making it possible for investors to join forces with banks to invest in their loans,” explains Oliver Schimek, founder and co-CEO at CrossLend.

To achieve this goal, we’ve created a platform that enables investments in securitised individual loans. In doing so, we are making banks P2P-capable, while merging the advantages of the P2P approach with banks’ traditional strengths – relationships and data.” CrossLend chose Luxembourg as its regulatory home, because Luxembourg is very financial services oriented, naturally international, very open minded towards digitalization and FinTech and very supportive of Start-ups in general. CrossLend is establishing a permanent presence in Luxembourg in order to leverage the well-developed financial services ecosystem, as well as the high level of innovation at professional and academic institutions.

The Chief Executive of EIF, Pier Luigi Gilibert comments: “CrossLend is a most interesting co-investment which will help to strengthen the Fintech industry via the Luxembourg Future Fund. The company’s innovative setup for securitising individual loans is effectively creating a new asset class which is very promising. We are excited about helping CrossLend to establish itself as a player in Luxembourg with the prospect of assuming an important role in the European debt capital market.

The Chairman of LFF, Patrick Nickels said: “The Luxembourg Future Fund aims to stimulate the diversification and sustainable development of the Luxembourg economy. This innovative company fits exactly into the scope of our strategic sectors, for example the ICT sector in general, and the Fintech sector in particular.

Mike Collett, Managing Partner at Promus Ventures, comments on the investment in CrossLend: “As a US-based Venture Capital firm it is often challenging to assess opportunities which innovate in a highly regulated industry in Europe. We are certain that CrossLend can become a game changer in the European and global financial eco-system. CrossLend has the right team to execute its truly grand vision.”

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