Startup Funding Circle plans £300m flotation

The co-founders of the peer-to-peer lending group.

The Funding Circle, a startup that offers loans to small businesses by matching them with lenders, has announced plans to raise £300 million through a stock market flotation.

The peer-to-peer lender currently offers loans in the UK, US, Netherlands and Germany but hopes to use the funds to expand into new markets.

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,” he added.

Desai co-founded Funding Circle in 2010 with two other former Oxford University graduates and it was recently valued at  £900 million ($1.16 billion), giving the group the impressive “unicorn” status – startups valued at over $1 billion.
“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,” said Danny Cox, an analyst at Hargreaves Lansdown.
“As ever investors should make sure they read all relevant documentation published by the company, and consider the risks as well as the potential upside of any investment,” he added.
The flotation is expected to value Desai’s company at up to £2 billion.
In an interview with Forbes, Desai shared his hopes to expand the group in the US.

“We’ve done over a billion dollars of loans since we started [in the U.S.], so we are actually already the largest non-balance-sheet lender to small businesses,” he said. “Part of the reason people probably haven’t heard of us is just a function of the U.S. market being so huge.”

The peer-to-peer lender is on track to become London’s biggest fintech IPO since WorldPay’s £4.8 billion ($6.1 billion) listing back in 2015.

The formal registration comes nine months after Sky News reported on the group’s initial plans for an IPO.