Funding Circle rumoured to be eyeing IPO

Sky News suggests the peer-to-peer lender is lining up investment banks to assist with a £1bn-plus London flotation.

Sky News suggests the peer-to-peer lender is lining up investment banks to assist with a £1bn-plus London flotation.

The world’s biggest peer-to-peer business lender may soon become the first to float in the UK. A report from Sky News city editor Mark Kleinman has suggested that the platform is currently in the process of lining up investment banking partners to assist in a beauty parade for the end of Q1 this year. According to the article, a possible listing could take place as soon as late autumn.

While Funding Circle spokespeople have declined to comment, it should be noted that Mr Kleinman has a track record of breaking stories of this nature. In 2017, he broke the news of fundraises by both P2P firm Zopa and digital bank Revolut ahead of official confirmation from the companies themselves.

Mr Kleinman’s sources suggest that Funding Circle’s valuation would comfortably exceed the $1bn mark upon listing.

The category-defining P2P lender began 2017 with an £82m fundraise ($100m), led by Accel. The company has raised a grand total of $373m in equity capital since launching in 2010. Besides Accel, its backers include Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek (Singapore’s sovereign wealth fund) and Union Square Ventures.

It may be some time before we receive comment from Funding Circle, but the stage certainly seems set for a float. After some early adjustments to its overseas operations, the company is now firing on all cylinders. It recently passed $5bn in lending globally – a sum which includes over $1bn of lending in the US. In the UK, it has now lent more than £3bn to small businesses.

There are other signs too. Funding Circle received full authorisation from the FCA in May last year, paving the way for the launch of its IFISA. It kicked off a major marketing push in August with the launch of its “made to do more” campaign, which included prime-time television advertisements.

The company’s well-respected SME Income Fund – which now has a little under £300m under management – already trades on the London Stock Exchange.

Were it to go public, Funding Circle would be the first UK peer-to-peer lender and indeed the first major UK-based fintech firm to do so. In the US, online lenders Lending Club and OnDeck have been listed for several years.