PEER-TO-PEER BUSINESS LENDING IPO: SEPTEMBER 2018 MARKET VALUE LOSS: $1.5 BILLION
Funding Circle was conceived over pints in a London pub by a former management consultant named Samir Desai, 36, during the financial crisis. As with LendingClub, the idea was to match borrowers—in this case small businesses—with institutional investors on the internet. Funding Circle listed on the London Stock Exchange in September 2018, raising nearly $400 million at a value of $2 billion.
That was the high point. Within nine months the company cut its revenue growth target by half, citing reduced demand for its loans and a proactive effort to “further tighten” lending to riskier businesses. Its stock has plunged by 77% in just over a year.
“Funding Circle is talking about not making a profit until 2022– 23,” says Russ Mould of British broker AJ Bell. “People lose faith.”