Vouch Financial, a San Francisco based online lender founded in 2013, will be closing its doors. In order to obtain a loan on Vouch, borrowers have at least one friend or family member sponsor them on the platform. These sponsorships can help the borrower gain access to more capital and lower their rate. Vouch had raised $11 million in venture funding from investors including Greylock, First round, and Data Collective. The WSJ states that loan volume on Vouch never took off like its larger peers, and that the company struggled as investor appetite for online lenders' loans have cooled off.
The company’s decision to shut its doors is a further indication of pressure affecting online lenders. It also suggests that more activity may begin to gravitate toward larger players and even potentially banks that are now increasingly offering online loans of their own. Vouch had struggled to compete with its bigger online rivals, and its investors decided not to continue backing it with more funds, a person familiar with the company’s thinking said.