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SoMoLend Closes $1.17M Seed-RoundLending Platform Allows Businesses to Receive Loans From Their Social Networks (May 15, 2012)
CINCINNATI, OH -- (Marketwire) -- 05/15/12 -- SoMoLend LLC, an alternative borrowing software-as-a-service lending platform focused on the social, mobile and local aspects of the loan market, has closed a $1.17 million seed-stage investment round. SoMo offers new solutions for small businesses to obtain the money they need to launch and sustain their operations.
CincyTech led the round, which also included Queen City Angels, the North Coast Angel Fund, Blue Chip Partners, Shaker LaunchHouse, Eldar Investment LLC, Clarion Direct Investment LLC, Clifford Holekamp, Elizabeth Crowell, Bruce Terry, Bob Baron, Cheryl & Carlin Stamm and numerous other individual investors.
The investment will be used to complete an alpha application of the software, create market underwriting standards and develop a broader capitalization plan. But even with its software still in development, the company's innovative business model is winning accolades around the country. SoMo was named a "Best of Show" demonstration at FinovateSpring in San Francisco last week. The two-day conference featured 63 demonstrations of various financial technologies, but only seven overall were chosen as Best of Show.
CEO Candace Klein founded SoMoLend in 2011 when she saw that small businesses needed more lending resources beyond traditional banks. SoMo's technology connects credit-worthy businesses with corporations and institutions looking to invest locally and with a purpose.
The social aspect ("So") of the business allows investors and borrowers to connect before and during the loan process. Because SoMoLend focuses only on commercial loans, the company can provide complete transparency to lenders.
The mobile aspect ("Mo") of the business allows lenders and borrowers to connect via location, in a hyper-localized geographic scope.
The signing of the JOBS Act in April will allow SoMo to use its technology nationally once the Securities and Exchange Commission (SEC) is satisfied that enough standards and best practices are in place to protect crowdfunding investors. By using SoMo's platform, small businesses can secure loans from family, friends, customers and other individuals. Klein and her team spent months lobbying Congress to pass the crowdfunding legislation.
"The JOBS Act is essential for our micro-lending platform," Klein said. "We're trying to give lenders the ability to invest in people and companies that they're passionate about while giving traditionally overlooked borrowers the same opportunities for loans as venture-backed companies."
The SEC will spend the next seven months deciding how to regulate crowdfunding and micro-lending. Klein will co-chair a group made up of crowdfunding's leading experts, known as the Crowdfund Intermediary Regulatory Advocates (CFIRA), who will help outline these regulations.
SoMoLend is a Web-based lending platform that uses patent-pending technology to connect small business borrowers with individual and organizational investors (lenders), executed within a hyper-localized geographic scope. SoMoLend's user-friendly technology allows small business borrowers to obtain loans from friends, family, customers, community supporters and interested organizations as well as from Facebook, Twitter, and LinkedIn connections. For more information, visit http://somolend.com/ or http://somolend.wordpress.com/.
CincyTech is a public-private seed-stage venture firm that invests in startup businesses in high-tech industries in Southwest Ohio. With substantial support from Ohio Third Frontier and corporations, foundations, civic organizations and individuals in Cincinnati, it is stimulating the growth of venture-worthy companies in information technology, bioscience and advanced manufacturing.
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