UK’s alternative lender ThinCats claws in £160m from Wafra Capital

Alternative lender to UK SMEs ThinCats secured a £160m strategic investment from Wafra Capital Partners (WCP).

Its new investors WCP, an arm of the Public Institution for Social Security of Kuwait, owned by the State of Kuwait, and Quilam Capital, a UK-based speciality finance provider, will sit alongside senior bank and institutional funding.

The lending firm will use the new capital to expand lending through both larger loan sizes and new product development and will be lending more from its own balance sheet also.

ThinCats, which has already lent nearly £1bn to SMEs, said the investment, alongside two bank funding agreements, will enable it to lend another £2bn.

While it started off as peer-to-peer lender lending between £1m and £15m to SMEs, it was acquired by ESF Capital in December 2015, which bought out three-quarters of the business with its CEO Jon Mould taking over as CEO.

In the past three years or so, its business has further evolved following the shutting of its retail platform and the hiring of ex Lehman Brothers securitisation chief Amany Attia as its CEO. Over this period, the alternative lender has seen its loan book increase tenfold to £500m with £289m originated in 2020.

Commenting on the round, Attia said that mid-sized businesses are feeling more confident as the economy is recovering from the pandemic and are now looking to rebuild working capital and expand either organically or through acquisition. “This is an important next step for us as a lender and allows us to bring the benefits of non-bank lending to a wider universe of mid-sized businesses,” Attia said.

”We are delighted to announce this significant investment by WCP, reinforcing their belief in our business. WCP is an exceptional partner with proven experience in supporting speciality finance platforms. WCP shares our vision to deliver real scale of funding to UK SMEs.”

Echoing a similar sentiment, ThinCats MD Ravi Anand added, “WCP’s investment follows a thorough process of engagement with the investor community. We chose WCP because of their deep experience with alternative lenders and the flexible nature of their capital.

“To date, we have successfully raised £750m of lending capital. Now, alongside WCP’s investment, we are close to completing two senior bank funding agreements which will provide an immediate additional £500m to support UK SMEs into 2022.”

WCP managing director Rachid Ouaich is bullish about the firm’s growth. He said, “We have known ThinCats for a couple of years and been impressed how they have been able to scale the business, create a profitable platform and navigate the pandemic.  Our capital is perfectly suited to assisting ThinCats on its next stage of growth.”

Quilam Capital partner Kieran McSweeney added, “We are delighted to be working alongside WCP and backing the impressive management team at ThinCats who have built a market-leading platform in the SME space and one that we believe can grow materially over the next few years, supporting many hundreds of businesses and underpinning thousands of jobs.”

ThinCats was advised by Fenchurch Advisory Partners and CMS on WCP’s investment.

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