A New “Unicorn” in the UK?

By Ryan Weeks on Friday 27 March 2015

Alternative Lending

Rumours have surfaced over the past week that Funding Circle is just a month or two away from breaching the $1bn valuation mark.

The Sunday Times reported over the weekend that the world’s foremost peer-to-business lender is looking to raise a sum of over £50m within the next two months. Such a deal would push Funding Circle’s valuation beyond the $1bn mark. According to the Silicon Valley lexicon, Funding Circle may then be referred to as a “unicorn”. Or in layman’s terms: a private technology startup with a valuation upwards of $1bn, e.g. Farfetch, Shazam and TransferWise

Funding Circle spokespeople have confirmed that the Sunday Times article was based purely on speculation. The platform’s most recent equity fundraise came in the form of a Series D round in July last year. Index Ventures, Accel Partners, Union Square Ventures and Ribbit Capital poured a sum of $65m into the company – meaning that Funding Circle had raised a grand total of $123m in equity funding. Neil Rimer, Partner and Co-Founder of Index Ventures, said of the investment:

“We view Funding Circle as a category-defining company that pioneered a marketplace for business loans.”

If and when some exact figures arrive, expect Funding Circle’s valuation to be tied fairly closely to the sum of its cumulative transactions. In the UK, the platform has lent £580m to SMEs. At a run rate of £30m-£40m more each month, that figure will likely be around £650m in 2 months time. Factoring in the company’s US operations, Funding Circle may have already leapt the $1bn hurdle in terms of cumulative lending to date.

We will of course keep our ears close to the ground on this one. 

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