Funding Circle, a UK based peer to peer lender, is reportedly planning an initial public offering (IPO) for 2018. The news of the new listing is courtesy of SkyNews that reports Funding Circle will begin meeting with investment banks during Q1 of 2018 as they sign up underwriters for the deal. Shares are expected to list at some point in late 2018. If Funding Circle trades on an exchange it will become the first UK P2P lender to do so thus representing a seminal event in the online lending industry.
Funding Circle is the largest P2P lender in the UK having lent over £3 billion globally since inception. Today, the online lender operates in the UK, US, Netherlands and Germany providing loans to SMEs. In the UK specifically, Funding Circle has helped 32,000 businesses access capital to grow their businesses. On the lending side, approximately 75,000 investors have provided their money earning an average 6.6% return before taxes. Funding Circle estimates it has helped to create more than 40,000 new jobs in the UK and over 100,000 globally.
Funding Circle reported a loss of £35.7m for fiscal 2016 but was said its UK business was cashflow positive in Q4 2016 and has continued to generate positive cashflow through the first half of 2017.
During the past year, Funding Circle raised £82 million in equity capital at unicorn valuation level. In April, Funding Circle SME Income Fund, which purchases loans through the Funding Circle platform, raised net proceeds of £140 million through a C share issue.
If the Funding Circle IPO does take place the public float should propel the online lender further ahead of its competition. While some may want to compare a Funding Circle IPO to US online lender LendingClub, this would be misguided as the regulatory environment in the UK is far different than the US and the banking industry in general is far more concentrated.
Details should be leaking out soon as Funding Circle plans its roadshow to boost interest in a possible offer.
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