Funding Circle, which claims to be the “world’s leading online marketplace lender exclusively focused on small business,” is in advanced talks with Temasek Holdings, a Singaporean sovereign wealth fund, to sell a stake in itself, according to Sky News.
The move is part of a fundraising effort–to the tune of well over £50m–to increase Funding Circle’s profile among Britain’s wealthiest tech startups, particular among in the financial technology (fintech) world. According to sources cited in Sky News, Temasek, whose investments include China’s Alibaba, plans to invest about £30m as part of the deal, valuing Funding Circle in excess of $1bn (£675m). Other possible participants include Blackrock, the world’s biggest money manager, and Baillie Gifford, the Edinburgh-based asset management group. The funding round is likely to close within weeks, Sky News notes.
Currently, Funding Circle’s investors include Index Ventures, Accel, Union Square Ventures and Ribbit Capital. The company’s backers include Sir Charles Dunstone, co-founder of Carphone Warehouse.
The mission of Funding Circle, according to its website, is “to revolutionize the antiquated banking system and secure a better deal for everyone.” Sky News summarizes its less-than-five-years history,
Since opening for business, Funding Circle has lent close to £600m and counts more than 30,000 individuals, the UK Government and local councils among those providing capital through the platform.
Pressure from the Government on banks to refer borrowers to peer-to-peer lenders when their loan applications are rejected by high street stalwarts is fuelling a rapidf growth in demand in the sector.
In 2014, Funding Circle also announced a deal with leading bank Santander UK to refer small business borrowers to the fintech company. Following, other banks have sealed similar deals with Funding Circle and its ilk, which present higher interest rates than high street banks because of their lower fixed-cost bases. Of course, the successful initial public offering of Lending Club, among the world’s largest P2P platforms, doesn’t harm investors’ enthusiasm for the P2P industry.
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