CircleLending

About CircleLending

CircleLending was a financial services company that pioneered the peer-to-peer (P2P) lending market in the United States, focusing on formalizing and servicing loans between family members and friends. Founded in May 2000 by Asheesh Advani and launched in 2001, the company aimed to structure and manage private loans, a niche that set it apart from later P2P lenders that connected strangers. Advani, who had a background at the World Bank, identified the need for a service to manage these informal financial arrangements.

The company's business model centered on providing the necessary infrastructure for these private loans, including loan documentation, payment processing, and servicing. This addressed a market of individuals seeking to lend or borrow money for significant life events, such as a down payment on a home or starting a small business, but within their trusted social circle. The service minimized potential legal and tax issues while adding a layer of formality to what would otherwise be handshake agreements. In 2006, CircleLending secured $10 million in venture capital from prominent investors, including Venrock Associates, Bezos Expeditions, and Omidyar Network, signaling strong confidence in its model.

A significant milestone occurred in May 2007 when Sir Richard Branson's Virgin Group acquired a majority stake in the company, rebranding it as Virgin Money USA. This acquisition was intended to be Virgin's entry into the U.S. financial services market, with plans to expand beyond family loans into products like direct mortgages and student loans by blending P2P funds with capital from institutional investors. However, following the 2008 financial crisis, Virgin Group shifted its strategy and withdrew from the U.S. market. Virgin Money US ceased operations in November 2010. The legacy of CircleLending's business model continued when a former employee, Timothy Burke, founded National Family Mortgage in 2010 to fill the void left by Virgin's exit, focusing specifically on intra-family real estate loans.