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Only Fairy Cakes knows. You could email to ask them, or try the official forum, and it would be interesting to see whether you get a helpful reply. They do have a lot more information than is published. The new loan will at least repay the 3 earlier loans.

You either have to trust their ratings or base your decision on what you can glean. As the borrower hasn't answered questions on this, it seems either they don't know the reason themselves or the information isn't in the public domain.

The following info kindly supplied by FC. When a company comes for a new loan the rating has to be the same as the other loans they have with Funding Circle, unless the new loan will pay off the other loan ( I did not know this). So the first 3 loans were all D, as the first was D and the subsequent 2 did not pay off the previous. The fourth loan is paying off the previous loans and therefore the rating can be entirely re-evaluated.  So presumably between the first loan and the fourth loan, the company improved its rating from D to A+. The principal in the fourth was slightly more than the previous 3 o/s combined, but the interest rate is reduced from 14% to 8.3% and this will lead to a lower monthly payment, which is certainly a valid factor.

Bit of a leap of faith for me, but the sequence has logic.

Does this work in the other way as well? Let us say a company has an FC loan rated A+. The situation for this company worsens in such a way that a new loan deserves to be a D rated one. They take an FC loan without repaying the previous one and voila . . . as if by magic  . . .another A+ rated loan.
Is it possible?

I believe it has always been the case that a borrower cannot have simultaneous live loans at different bands, because it is in the borrower that the risk lies. Never known to have happened - and would be a technical error to be reported. I do not know of any old loans having risk bands changed because a new additional loan has been taken.
FC can waive or reduce their fee at their own discretion and without telling lenders. If I were this borrower I would not expect to have to pay full fees.

I do seem to remember little arrows to say whether and in what direction a risk band had changed, and also a prohibition on selling loans which had been changed by more than one band - now gone. Changing a risk band on taking additional loans must be before the time I was interested. In those days a further loan could be taken only after six months. The practice of rolling the old loan into a new one was started I believe in early 2013, when rates fell and it was beneficial to the borrower to refinance - there were complaints from lenders who held high interest rates - possible bought at a premium on the SM.
You would think that an additional loan would tend to lower the band - with extra debt, but with this case we see the band changed from D to A+. What has happened is that more risk has generally been let into the bands for SMEs and the fixed interest rates for each band have been increased when compared with, say, the first minimum rates when set in mid 2013, and two new bands were added - extending the availability of FC loans much further down the credit-worthiness scale SMEs. So those who ask for further loans would need to be given higher (better) bands just to maintain the same rates imo. In these circumstances I expect that FC are keen to roll everything up in a new loan at current rates, and I guess will be flexible on their fees.

Indeed, those arrows replaced what had originally been two entirely separate columns (the extra space taken by the usually-redundant column was used for the premium/discount, which hadn't existed in the original version of the loan parts page).