Speculation over which UK platform will be the first to come to market might soon be at an end.
LendInvest is reportedly gearing up for an IPO on the London Stock Exchange. Expected to take place at some point in 2015, the mortgage lending platform would become the first of UK’s many alternative finance providers to go public. The announcement comes shortly after the high profile IPOs of the US-based marketplace lenders Lending Club and OnDeck. After having funded just shy of £6m thus far in 2015, LendInvest has now crossed the £200m mark in cumulative funding – according to AltFi Data’s records.
“We are going through the process of getting LendInvest ready for a public market listing. We feel that one of the core principles of peer-to-peer lending is transparency, and so operating as a public company is something that we are working towards.”
Bolstering its prospects as an IPO candidate, LendInvest generated an impressive £2.5m in profit before tax in 2014 – and hasn’t taken on venture capital or external funding. Mr. Faes’ plans for 2015 include adding over £250m to the platform’s cumulative lending total, with turnover of more than £20m. Cormac Leech of Liberum confirmed the efficiency of the LendInvest operation:
“LendInvest is one of the fastest growing P2P platforms in the UK and has one of the highest profit margins among platforms globally.”
Mr. Leech also weighed in on the added benefits of going public:
“Listing means you get quite a lot of free advertising and branding, which makes it easier to acquire borrowers and lenders. So the cost of customer acquisition comes down, as does the cost of capital. Once you’re listed, investors tend to view you as lower risk.”
Paul Jeffery, formerly of Credit Suisse, is joining the LendInvest team as Chief Financial Officer and Head of Strategy – and is tasked with leading the company to market. Mr. Jeffery penned an intriguing guest column for AltFi in the wake of Lending Club’s landmark IPO, identifying greed as a force capable of derailing the P2P sector:
“The real danger is P2P lenders aspiring to be ‘the next Lending Club’, probably egged on by VC backers who have ticking fund clocks, will prioritize asset growth over asset quality. If this is the case it will be a tragic mistake.”
Don’t be surprised, then, if LendInvest’s volumes come on steadily in the year ahead. Clearly the emphasis – particularly with Jeffery now in the fold – will be placed firmly on credit quality.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.