Key Takeaways
- • Percent, a private credit marketplace platform, has received official registration as a broker-dealer, with FINRA approving the membership application of its subsidiary Percent Securities LLC.
- • The approved broker-dealer carries a $250,000 net capital requirement and enables Percent to custody investor funds directly, removing reliance on third-party escrow agents.
- • Percent reported an oversubscribed Series B round of nearly $30 million in the first half of 2023 and anticipates reaching profitability by mid-2024.
- • The company plans to grow full-time headcount by as much as 14.5% by year-end 2023 and reports over $1.2 billion in cumulative transaction volume.
Summary
Percent, which describes itself as the platform that created the modern credit marketplace, announced on August 15, 2023 that it has become a registered broker-dealer, according to a Business Wire release. The step was approved by FINRA, which accepted the membership application of Percent Securities LLC, the company's broker-dealer entity, subject to a $250,000 net capital requirement.
The company said the license addresses a structural gap in private credit transactions. Many broker-dealers cannot custody customer funds, forcing investors and borrowers to route money through a third-party escrow agent in a fragmented, multistep process. With custody capability, Percent aims to consolidate those steps into a single connected investment experience for its customers.
CEO and founder Nelson Chu framed the license as the next step in the company's effort to build what he described as the first vertical SaaS solution for private credit, citing the asset class's recession-resilient characteristics and the boom in private credit activity. Prath Reddy, President of Percent and CEO of Percent Securities LLC, said the registration provides greater confidence to regulated underwriters, borrowers and institutional investors seeking to transact in a fully compliant manner.
The announcement also highlighted the company's financial trajectory. Percent closed an oversubscribed Series B round of nearly $30 million in the first half of 2023. The company plans to expand its full-time workforce by as much as 14.5% by the end of 2023 and, given its revenue growth and steady expenses, anticipates turning profitable by mid-2024. Per the company's boilerplate, Percent was founded in 2018 and has powered more than $1.2 billion in transaction volume across asset-backed and corporate lending.
The company said the license addresses a structural gap in private credit transactions. Many broker-dealers cannot custody customer funds, forcing investors and borrowers to route money through a third-party escrow agent in a fragmented, multistep process. With custody capability, Percent aims to consolidate those steps into a single connected investment experience for its customers.
CEO and founder Nelson Chu framed the license as the next step in the company's effort to build what he described as the first vertical SaaS solution for private credit, citing the asset class's recession-resilient characteristics and the boom in private credit activity. Prath Reddy, President of Percent and CEO of Percent Securities LLC, said the registration provides greater confidence to regulated underwriters, borrowers and institutional investors seeking to transact in a fully compliant manner.
The announcement also highlighted the company's financial trajectory. Percent closed an oversubscribed Series B round of nearly $30 million in the first half of 2023. The company plans to expand its full-time workforce by as much as 14.5% by the end of 2023 and, given its revenue growth and steady expenses, anticipates turning profitable by mid-2024. Per the company's boilerplate, Percent was founded in 2018 and has powered more than $1.2 billion in transaction volume across asset-backed and corporate lending.
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