Funding Circle IPO: Squaring the circle
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Opinion

Funding Circle IPO: Squaring the circle

Funding Circle demonstrates the pitfalls of IPO-ing a marketplace lender.

lb_banner_600

The story of small business lender Funding Circle’s IPO in October was in some ways a surprise – and in other ways entirely predictable.

When the IPO was launched at the beginning of September there was feverish speculation that the firm, which chalked up revenue of £63 million in the first half of this year but has yet to make a profit, could be valued at more than £1.65 billion. This was the upper valuation limit set by Heartland, the private holding company of Danish billionaire Anders Holch Povlsen, which had pledged to buy 10% of the deal.

The ink was hardly dry on a strategic partnership that the lender had signed with Alcentra, under which the BNY Mellon-owned specialist loan manager will buy $1 billion loans from Funding Circle’s US business over the next three years.

Revenue for the full year 2017 was £95 million, so the first half 2018 numbers looked encouraging. The firm has now lent £5 billion globally since it launched in 2010 and is a high-profile poster child for alternative lending in the UK.


Gift this article