Funding Circle Files For £300 Million IPO

By Annie Baker ● Updated September 5, 2018

Funding Circle is a peer-to-peer (P2P) lending company that is planning to raise £300 million in an initial public offering (IPO). The IPO plans were revealed in a document filed with the London Stock Exchange today.

How does Funding Circle work? Founded by Samir Desai, James Meekings, and Andrew Mullinger in the UK in 2010, Funding Circle facilitates deals between small companies and investors. Investors range from private individuals, financial companies, and government agencies.

So far, Funding Circle facilitated over £5 billion in loans to more than 50,000 SMEs from 80,000 investors. And roughly one-fifth of those transactions happened in the first half of 2018, according to VentureBeat. Funding Circle had launched in the UK in 2010 and expanded to the US three years later. And then in 2015, the Funding Circle acquired Zencap and further expanded in Spain, Germany, and the Netherlands.

One of the reasons why Funding Circle has been popular with small businesses is traditional lenders have been much more conservative with investments. “Before 2008, small businesses didn’t necessarily like their bank but they trusted them. After the crisis even that wasn’t true,” said Desai in an interview with BBC News. “Small business lending was always a pretty small part of the bank’s business – around 5% of their total lending – so the banks didn’t care that much if small businesses felt neglected.”

Currently, Funding Circle has £2.5 billion of loans under management total. And Funding Circle raised over $400 million in venture capital funding. Its last round of funding was a $100 million Series F in January 2017. Investors in that round of funding were DST Global, Accel Partners, Rocket Ventures, Union Square Ventures, Sands Capital Ventures, Index Ventures, and Baillie Gifford.