Stephen Moss, Founder and MD at Sourced Capital, notes that it has been a while since they last discussed their business operations, the journey and what they have been working on “in the background.”
Moss wrote in a blog post that in 2018, they became an appointed representative of Rebuilding Society, which allowed them to operate as a peer-to-peer platform. From the outset, their goal was to “become a directly authorized business, so [they] could work closely with the FCA to improve and develop a sector [they] are genuinely passionate about.”
Moss pointed out that when they became an appointed representative, the platform, through which investors could register and invest in their property projects, was launched “utilizing approved third-party software.”
Whilst fully functional, using a third-party partner has “led to some frustrations, as we were confined within the framework of the software provider,” Most noted.
Consequently, this has prevented them from “having the ability to change key areas of the platform, which [they] knew would be beneficial to [their] investors,” he explained.
In Source Capital V2, it is advantageous to be directly authorized, and this “was always a clear goal for the business.”
“To help deliver against this ambition, we began looking at firms that could help us with the process and decided to begin working with Thistle Initiatives at the end of 2020. Thistle have been fantastic in helping me and the team review and revise our systems, policies and procedures, to coincide with the FCA preferences and expectations from directly authorized firms. As the months passed, we began to plan our application submission.”
He also shared:
“During a regular catch-up call with our principle, I was introduced to Roger Smith, the compliance director of Peer Funding Limited. Peer Funding Limited is a peer-to-peer lending platform that had stopped trading, due to the senior team having different ideas on how the business should be taken forward.”
Roger and the Commercial Director, Tony Hedger, were “looking to sell their business and as we got talking, it was clear we shared the same vision,” Moss noted while adding that they all had “a passion for the sector and their experiences complemented the team at Sourced Capital.”
He also mentioned:
“It’s amazing sometimes how a simple introduction can change the course of your business and that is exactly what happened. After meeting and spending time with Roger and Tony, we proposed to purchase their company and bring them into the Sourced Capital family.”
He further revealed that they “spent a huge amount of time with Thistle, working through [their] plan and how [their] application with the FCA would need to reflect a change in control, due to Peer Funding Limited already being directly authorized.”
For anybody reading this and then thinking to themselves – “Great, I’ll purchase a company to avoid going through the directly authorised process”, let me assure you “it is no shortcut,” Moss noted while pointing out that the FCA were “as diligent, if not more so, in understanding our business, our team, our processes, resources and the additional level of how this all fits with Peer Funding Limited.”
He also noted:
“After what has been an extremely rigorous process, I am very proud to say we were approved for the change in control and on the 24th January 2022, we completed the purchase of Peer Funding Limited.”
“The completion of this purchase will always be in my memories, as it is the first acquisition for Sourced Capital. The purchase helped achieve our primary goal of becoming directly authorized and it brought in two very experienced and committed Directors, to help guide and support the business.”
“During the process of our application with the FCA, we began developing our own, bespoke platform. We took the time to speak with investors to understand what it is they want from the platform and how we can deliver this.”
The team at Sourced Capital have worked hard “in developing a new platform that is better suited to us as a business and it has a cleaner dashboard with better reporting and statement functionality,” Moss added.
He also pointed out that a focus for their new platform “was utilizing the latest in technology and working with established and reliable partners.” He explained that this is “what led to our introduction to Goji.” He also noted that Goji are a technology platform “who are specialists automating onboarding, AML, payments, client money handling, and reporting.”
“Importantly, Goji were already known to the FCA and considered fully acceptable, as they had already dealt with the company via relationships with other platforms.”
Goji a partner with Starling Bank and Modulr, “providing investors their own e-wallets linked to the Sourced Capital platform, offering easier routes to invest and withdraw monies.” Their development team have built a new lending platform and “integrated it with Goji to provide seamless services and automated functionality,” Moss noted.
He also shared:
“In addition to the above, our development team has also created an entirely new front-end website, which will provide more intuitive functionality and an overall better user experience. I am very happy to confirm that the new website and platform went live on the 1st February 2022, again achieving one of the company’s key goals.”
Existing investors in Sourced Capital will know that we only “lend to franchisees of our sister company and, with our franchisee network doubling in the past 12 months, the pipeline of projects is continuing to grow.” Consequently, there are “increasing numbers of investment opportunities being presented to Sourced Capital,” Moss claims.
“With this in mind, 2022 looks to be an exciting year with continued growth and an ethos to support, succeed and achieve.”