Funding Circle flags flotation

Peer-to-peer lender Funding Circle has announced plans to raise £300 million via a stock market flotation which is likely to value the firm at up to £2 billion.

Funding Circle offers business loans in the UK, the US, Germany and the Netherlands and the money raised will be used to bankroll expansion in new markets. The initial public offering (IPO) will also “enhance” the balance sheet and help “engender trust” in the group’s business with investors, borrowers and regulators, the firm said yesterday.

Samir Desai, chief executive and co-founder of Funding Circle, said: “Today’s announcement is the start of the next stage in our exciting and transformational journey.

“By combining cutting-edge technology with our own proprietary credit models and sophisticated data analytics, we deliver a better deal for small businesses and investors around the world.”

Merrill Lynch, Goldman Sachs and Morgan Stanley are acting as advisers to the IPO. As part of the float, Scandinavian tycoon Anders Povlsen will buy a 10 per cent stake in Funding Circle. Povlsen owns retailer Bestseller and holds stakes in Asos and Germany’s Zalando.

Funding

Circle, which launched in 2010, matches lenders to small business borrowers. Last year it booked revenue of £94.5m, compared with £50.9m in 2016.

Loans in the same period grew from £721m to £1.7bn. Loans under management as at the end of the first half of 2018 totalled in excess of £2.5bn.

Private investors will be able to participate in the forthcoming IPO through retail stockbrokers.

Danny Cox at Hargreaves Lansdown said: “IPO season seems to be picking up a bit of pace, and unlike with many new share issues, private investors will be able to participate in Funding Circle’s planned flotation.”