Growth Street launches digital-focused growth strategy
Growth Street today announced the launch of a new digitally-driven growth strategy. Over the past year, Growth Street has been developing new data and risk profiling capabilities to enable it to adopt a purely digital focused approach. This realignment is based on extensive analysis of Growth’s Street’s data, which shows consistently that SMEs have a better long-term risk profile if they put digital tools at the core of their business.
As part of the new approach, Growth Street will aim to increase the number of borrowers that find its service through partnerships with cloud accounting providers, digital-first banks, and technology-based volume introducers. This new model will help offer a better risk profile to its investors, too, by increasing the number of borrowers and lowering GrowthLine limits. Growth Street’s enhanced digital capabilities will also reduce the time taken to assess a business’s credit-worthiness.
Growth Street has also been one of the first companies to communicate the FCA’s new standards on peer to peer lending to their investors. As part of regular investor communications, Growth Street updated its customers on two loan defaults. The company also informed investors that the cost of the two defaults had been taken onto the company’s own balance sheet to protect investors from being exposed to losses from these two facilities, and to allow Growth Street the time and flexibility to maximise recovery.
Prior to this, Growth Street has raised £17.5m of investment in two significant funding rounds in January and May 2019.
Commenting on the announcement, Growth Street co-founder and CEO Greg Carter said:
“We have been delighted at how quickly Open Banking and cloud accounting tools have been embraced by UK SMEs. This has allowed us to accelerate aspects of our longer-term strategy. We are excited to announce that we are now in a position to make the ambitious strategic move to a digital-only model.
“Over the past year, we have forged strong partnerships with Xero cloud accounting and Starling Bank, and have already begun onboarding new borrowers via their marketplaces. This decision will enable us to support more SMEs across the UK, more effectively and efficiently than ever before. Since our inception, we have made it our priority to invest significantly in technology, and adopting an all-digital model for our business has always been our long term goal.
“Over the past few years, we are proud to have become a front-runner in the world of fintech for SMEs. The future of business finance will be through online marketplaces and this move will enable us to stay ahead of the curve.
“After extensive analysis and consideration, we have, unfortunately, decided that we can no longer deploy a hybrid origination model, which includes both traditional and digital business development. As a result, there will be redundancies in the regional sales team. This is not a decision we have taken lightly and we want to thank those affected for their service to Growth Street”