ApplePie Capital, a San Francisco, CA-based online lender solely dedicated to the franchise industry, raised $16.5m in Series B funding.
The equity round was co-led by QED Investors and Fifth Third Capital, the direct equity investment subsidiary of Fifth Third Bancorp, with participation from previous investors Signia Venture Partners, Freestyle Capital, and Prosper president Ron Suber as well as Colchis Capital Management, L.P.
The company simultaneously announced that it has entered into a $180m loan purchase agreement with TowerBrook Capital Partners L.P. (TowerBrook) to purchase franchise loans originated by ApplePie over a two-year period. Funding will come from TowerBrook’s Structured Opportunities Fund and a credit facility provided by SunTrust Banks, Inc. The TowerBrook relationship will enable the company to further strengthen its position as a provider of growth financing for the franchise industry.
As part of the agreement with TowerBrook, ApplePie also announced the addition of Tim Morris, former Chief Risk Officer of GE Capital Franchise Finance, as a strategic advisor to the firm.
Led by Denise Thomas, CEO and co-founder, ApplePie Capital operates a franchise loan marketplace that enables entrepreneurs to efficiently obtain financing to start or expand their franchise business. It also enables investors to earn fixed-income returns with established high-quality franchise brands.
Since it started lending in January 2015, ApplePie has formed partnerships with 40 franchise brands, funded over $50 million in loans, and returned over $7 million in principal and interest to investors.