Funding Circle US, previously part of Funding Circle UK, was acquired by iBusiness Funding LLC, part of Ready Capital (NYSE:RC), earlier this year. When the sale was announced, Funding Circle CEO Lisa Jacobs said,:
“We are pleased to have reached an agreement with iBusiness Funding, one of the leading processors of loans to US small businesses. In iBusiness, we have found a partner that shares in our mission, and we look forward to seeing the success of the combined entity.”
iBusiness is a provider of lending solutions for banks and lenders specializing in SBA lending.
Funding Circle UK (LSE:FC) gained £10 million on the sale of the US entity.
The UK-based parent company Funding was once a leading SME peer-to-peer lender that morphed into a platform funded by institutional money and sophisticated investors.
In a blog post this past week, Funding Circle US CEO Steve Alloca announced his exit from the online lender – a company he joined in early 2023. Alloca said that after a “rewarding journey” and fulfilling tenure, he shared his decision to leave the firm.
“Last year, we made a strategic move, winning the only SBA 7(a) SBLC license granted to a Fintech lender. Although unexpected, the sale to Ready Cap was a bold decision by the Board (stock up 230% YTD). I believe this will mark just the start of efforts to simplify access to capital for responsible small business lending in America. Stay tuned for updates on my current endeavors. I extend deep gratitude to the Funding Circle US team, partners, and small business owners who trusted us.”
Fintech OG Peter Renton, who co-founded LendIt and then Fintech Nexus, commented on the announcement:
“I was sad to hear about the sale. But I understand their decision. Steve, the company was lucky to have you in charge for 18+ months. I look forward to hearing about what is next for you.”
The sale of Funding Circle US is emblematic of the changing online lending ecosystem in the US. At one point, P2P lending was a hot sector of Fintech, only to realize that institutional money was a far easier game. The UK, home to the first P2P lender, has also transformed with only a few peer-to-peer lenders in operation.
Publicly traded Funding Circle continues to grow but still reports net losses as it expands its digital services to reach more potential borrowers.
