Funding Circle confirms IPO that could value it at £2bn
Small business loans platform Funding Circle this morning confirmed its intention to IPO in a move that could value it at £2bn.
The firm plans to float 25 per cent of its shares to generate £300m on the London Stock Exchange, with its debut being underpinned by Danish billionaire Anders Povlsen, who has committed to buy 10 per cent of shares through his investment company Heartland.
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Samir Desai, chief executive and co-founder of Funding Circle, told City PM:"What’s particularly exciting is when we run around talking to investors, we get a lot of interest in the business. What this really shows is what were doing is very unique, but it also shows that there is an emergence of fast-growing european fintech companies which investors are really attracted to."
Desai said that the IPO cash will be invested predominantly in marketing such as TV and radio advertising, as the firm aims to ramp up its awareness campaign.
He added: "We know where we are going in the long term, and we're not naive – we know there will be ups and downs, but as long as we stay focused on the long term we will be happy."
Desai’s firm has matched entrepreneurs and small companies with investors providing flexible financing, giving loans totalling £5bn since it began life in 2010.
As part of its IPO confirmation, the company posted recent results, showing it almost doubled revenue in 2017, making £94.5m compared to 2016’s £50.9m.
In the first half of this year, that figure stood at £63m, up from £40.9m in the first half of 2017. Loans under management for the six months to June stood in excess of £2.5bn.
Partner at early investor Index Ventures, Neil Rimer, called Funding Circle “an indispensable source of financing for small businesses”.
“This is an important milestone that will allow the company to support tens of thousands of additional small businesses, something everyone should celebrate,” added Rimer, who also sits on the lender’s board.
“Samir and his team have built a world-class fintech company from London," said Harry Nelis, a partner at Accel, another early investor.
"Today’s milestone and Funding Circle’s leadership in all of its markets are testament to the quality of the team and their relentless focus on harnessing technology and data to fix a broken financial system and providing the best customer experience for small businesses from the get-go."
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