P2P Lender Squirrel Group Seeks Big $5 Million Equity Crowdfunding Round on Snowball Effect

Squirrel Group, a mortgage broker and peer to peer lender is looking to raise $5 million in funding and they are using Snowball Effect to help things along.  The offer, which is coming prior to an anticipated public listing, has garnered significant interest. So much, in fact, retail investors are said to have a slim chance in purchasing shares. John Bolton, Squirrel CEO, said there had been $4 million of pre-registered interest from their customer base who are likely to fill the $2 million available through the retail side of the offer. Wholesale investors are expected to scoop up the balance of $3 million. The company is issuing five million shares at $1 apiece.  The 8-year-old firm, that launched its P2P site – Squirrel Money– last November, now has a valuation of almost $23 million. Squirrel Money has lent out about $1.7 million since its launch.  The company predicts P2P lending to be about $24 million by the end of the March 2017 fiscal year.

Squirrel Mortgages is said to have  generated $548,000 of EBITDA in 2014, Last year that number hit $605,000. The company is forecasting operating earnings of $1.6 million for the 2016 March financial year. As for the peer to peer lending side, Squirrel Money is expected to generate a million dollar loss for this fiscal year.  The PE ratio was quoted at 18 times earnings which was described as being on the high side – but then, in reality, it is all about future growth. Management expects the company to grow rapidly in coming years.

The $5 million in funding is expected to be sufficient to get the business through to a  listing on the NZX’s new NXT market sometime next year.

Harmoney, the first peer to peer lender in New Zealand, had the sector all to themselves until LendMe and Squirrel Group entered the space. During its first year in operation, Harmoney originated over $170 million loans. The company is now expanding into Australia.