On the 15th June, Portuguese peer-to-peer lender Raize has announced an initial public offering (IPO); not only making it the first IPO to be held in Portugal since 2014 , but also the first European P2P lender to even have one. On the continent, German online lender Creditshelf Aktiengesellschaft has also made public its intentions to launch their own IPO on the Frankfurt Stock Exchange later this year.
Raize will be floating 15% of the company’s shares, with an additional 10% of shares made available for a period of 6 months — when it begins trading on Euronext Access with a market capitalisation of EUR10 million on the 18th of July. Founded in 2015, it is one of Portugal’s largest investment communities with 30,800 retail and institutional investors. Like Funding Circle, the company has carved a niche in SME finance by positioning itself as a cheaper and more accessible source of finance for small Portuguese businesses; many of which face difficulties securing longer term loans from existing banks.
Creditshelf Aktiengesellschaft on the other hand will be issuing shares with the aim of increasing their capital by approximately EUR15-20 million. Like Raize, Creditshelf operates by providing capital to SMEs, although it differentiates itself by attracting SMEs seeking larger amounts of funding : each loan it provides averages around EUR500,000 and EUR600,000. As a point of reference, the average online SME loan is usually under EUR100,000.
Raize’s IPO is a notable advancement for the European alternative lending market, which has yet to see any significant listings on the stock market. Creditshelf’s announcement signals that this trend might be gaining momentum as online lenders increasingly gain legitimacy in the eyes of investors. In the UK, Funding Circle, Zopa and RateSetter are all rumoured to be considering public offerings, but nothing has been set in stone.