GroupMe co-founder Jared Hecht raises $3.4 million to fix small business lending by Erin Griffith @FortuneMagazine February 5, 2014, 6:59 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Jared Hecht FORTUNE — When serial entrepreneurs jump from company to company, they tend to stay in a similar, or at least a related, category. But the founders of GroupMe, a messaging app which sold to Skype for around $80 million in 2011, have each gone in totally different directions. GroupMe’s co-founders Jared Hecht and Steve Martocci (who previously worked at Tumblr and Gilt Groupe, respectively) are applying their experience in the consumer web to the B2B world. In August, the pair left GroupMe, exactly two years after the sale to Microsoft MSFT . Shortly after, Martocci launched Splice, a music collaboration app to help musicians and producers edit, share, and manage digital music files. He raised $2.75 million in venture backing for the company. On Wednesday Hecht unveiled his new project: Fundera, a marketplace for small business loans. He’s raised $3.4 million in venture funding from Khosla Ventures, First Round Capital, Lerer Ventures, SV Angel, and angel investors Strauss Zelnick, Rob Wiesenthal, David Rosenblatt, and David Tisch, several of which also backed GroupMe. Hecht and co-founders Rohan Deshpande and Andres Moran have already hired a team of eight. Fundera is meant to help small business owners navigate the opaque world of alternative lending. The idea came when Hecht’s brother-in-law, a restaurant owner, was denied a traditional bank loan to open a third location. “I didn’t understand why he couldn’t get a loan from a bank,” Hecht says. “Both locations were very successful. They did $700,000 in Ebitda every year.” The tough lending market for small businesses is particularly alarming to anyone coming from the high-risk startup world, where, Hecht says, “software startups are able to raise millions of dollars without any revenue.” MORE: How Josh James landed $125 million in funding from his hospital bed Indeed, Hecht learned that since the financial crisis of 2008, 75% of small businesses which apply for traditional bank loans are denied. In the absence of bank loans, small businesses are increasingly turning to alternative, non-bank sources of lending, such as merchant cash advances or equipment financing. They’re notoriously expensive compared to traditional bank loans, but often, small business owners have no other option. Hecht believes that non-bank lending will become a primary source of capital for businesses with less than $5 million in revenue in the U.S, and that interest rates will become increasingly competitive as the market grows. So he started Fundera to make accessing alternative sources of capital more transparent, efficient, and user-friendly for small businesses. Unlike peer-to-peer lenders like Prosper and Lending Club, Fundera will stick to its vetted alternative lenders who have experience with B2B loans. After evaluating lenders by talking to customers, sorting through online reviews, vetting technology, and even applying for loans, Fundera has signed up 20 lenders to the platform, including CAN Capital, OnDeck, Fundation, and Celtic Bank. Fundera will cap the marketplace at 30 lenders. Small businesses interested in getting a loan can apply on Fundera.com through a common loan application, which Hecht says takes four to six minutes to complete. Fundera will then pair the applicants with two to three alternative lenders, chosen based on the highest probability of a match. It helps that Fundera is not doing the lending itself, so the site acts as an independent third party when making recommendations. The point is to make the entire process transparent and easy to understand for the applicant. This is where Hecht’s background in building consumer web apps comes in. “This is sort of the Wild Wild West of industries where the Internet has had close to zero impact,” Hecht says. “The tools we give [small business owners] are generally archaic and poor user experiences. They’re not similar to the experiences they have across other web tools,” he adds. The benefit to the lender is that Fundera’s applicants are pre-qualified. In some instances, Fundera directly integrates with a lender’s back-end software so the terms of the loan can be determined right away. In exchange for pre-qualified leads, Fundera receives a 1% to 3% origination fee on successful loans from the lenders. In private beta, Fundera has matched more than 200 companies with lenders, nine of which have resulted in a loan. Update: A prior version of this story included U.K.-based Funding Circle as an example of a peer-to-peer lender, but Funding Circle is actually a member of Fundera’s group of approved lenders.