P2P lending platform Funding Circle is planning a £300m IPO on the London Stock Exchange, which could value the company at around $1.6bn.
This offer will be made of new shares issued by the company, worth a total of £300m, as well existing shares to be sold by ‘certain existing shareholders, directors and employees.’ Institutional investor Heartland has agreed to acquire 10 per cent of the ordinary share capital.
The primary use of the proceeds from the IPO will be used to balance its sheet position.
At the start of the year, it was reported by Sky News that Funding Circle was looking to up to $2bn through a potential IPO.
UK-based Funding Circle is a small business lender that helps to connect investors with businesses that wish to expand in the UK, US and Europe. Since its launch in 2010, the company has helped lend $5bn to over 50,000 businesses through 80,000 investors. The company has supported more than $1bn in loans during the first half of 2018.
Projected investor returns for loans originated in 2017 are planned to be between 4.6 per cent and 7.6 per cent, across all geographies.
The company has seen substantial growth with its revenue growing at a CAGR of 78 per cent between 2015 and 2017. The company’s revenue in 2017 reached £94.5m, compared to £50.9m raised in the previous year.
In line with this, Funding Circle’s revenue for H1 2018 reached £63m, making it 22.1m bigger than H1 2017.
Funding Circle CEO and co-founder Samir Desai said, “Today’s announcement is the start of the next stage in our exciting and transformational journey. Over the last eight years, we have worked hard to build a platform that is number one in every market we operate in.
“By combining cutting-edge technology with our own proprietary credit models and sophisticated data analytics, we deliver a better deal for small businesses and investors around the world. I am very proud of the team and culture we have created at Funding Circle, both of which have been integral to our success to date.”
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