Santander Group’s FinTech venture capital fund Santander InnoVentures is leading the Series B funding round in CrossLend, a Berlin-based pan-European digital debt marketplace.

The round also included funding from existing investors Lakestar, ABN AMRO Ventures and Earlybird, with more institutions expected to join as equity investors over the next few months.

Founded in 2014, CrossLend provides a digital debt marketplace for consumer and small business invoices, mortgages and other forms of debt originated by banks and alternative originators.

It then makes the assets available to a wide range of institutional investors, such as banks, investment funds and insurance companies. This allows loan originators to expand their origination capacity and increase income, while at the same time helping to reduce pressure from capital requirements.

The investment comes as the European Commission’s capital markets union initiative is set to deliver an action plan by the end of 2019 to provide new sources of funding for businesses, reduce the cost of raising capital, increase options for savers across the EU, facilitate cross-border investment and make Europe’s financial system more resilient and competitive.

CrossLend stated that its digital debt marketplace infrastructure is closely aligned with core elements of previous EU action plans and already enables pan-European fixed-income investment in the absence of a true capital markets union.

Manuel Silva Martínez, partner and head of investments at Santander InnoVentures, said: “By developing technology that digitises processes done manually today and building a regulatory infrastructure that allows for a truly pan-European platform, CrossLend is addressing several key opportunities: the ability for banks to mobilise balance sheet assets for regulatory capital optimisation, and connecting alternative originators and banks alike with new sources of capital in-market and crossborder, all of this seamlessly and profitably.”

Martínez will join CrossLend’s advisory board.

Oliver Schimek, chief executive and founder of CrossLend, added: “Well-functioning debt capital markets are crucial for stability in Europe, yet investment banking in debt markets has mostly remained undisrupted through digitisation until now.

“The arteries of our financial system are clogged, leading to severe economic restrictions for companies and individuals in Europe – CrossLend re-wires the debt market in the spirit of the European capital markets union.”

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