Funding Circle has recently filed for an IPO that could value the company more than £1.65bn. ($2.13 billion). Since the announcement of its plans to raise in venture capital funding via a document filed with the London Stock Exchange, the company has been featuring in a vast array of pieces written around the topic. We have compiled the most interesting opinions and insights over the last week.
According to CEO Samir Desai, who spoke exclusively to Forbes ahead of the filing, Funding Circle is the biggest small business lender by volume in the U.K. currently, and targeting the U.S by means of its IPO. Forbes emphazises that Funding Circle has positioned itself in a vast market of demand for small business borrowing, with a model that enables those small businesses to borrow up from a pool of public and institutional online, at attratictive interest rates. According to Forbes, Samir Desai believes that Funding Circle has the potential to lend $100 billion in near future, and the U.S will play a key role in such growth. There remain some challenges for Desai and his team that are worth mentioning, however; such as the process of persuading the London market that peer-to-peer lenders are a solid investment.
Economist reports the news by narrating Funding Circle’s sucess story over the last years, while providing a background of the industry the company operating in. Considering that banks traditionally have had a monopoly over the peer-to-peer lending services targeting small businesses, it is no surprise that Funding Circle, as a company providing alternative sources of capital to such businesses, has gained attention from British policymakers. One of the aftermaths of Brexit is the weight put on the shoulders of Fintech bossess regarding recuriting foreing talents. The article reports that Samir Desai views the lead-up to Brexit as an opportunity, as it has crimped lending by banks of the U.K. He trusts that the British government to continue to allowing foreign talents into the country. At the end of the day however, peer-to-peer lending is a tricky business, the article concludes. The industry is still young and gaining new customers is expensive.
On the other hand, Financial Times mentions that the peer-to-peer lending sector has become progressively dependent on flightly institutional funding, while it is critical whether the value of the virtues of Funding Circle, such as solid governance, strong technology and a sound position, can be assessed in a healthy way at a such background.
Finally, Reuters reports the existence of the concerns in the financial industry regarding whether upstart peer-to-peer lenders such as Funding Cycle that are challenging banks will be able to weather an economic downturn. Reuters also reports that Funding Circle believes it is the right time to IPO to demonstrate its maturity, transparency and governance. Accordingly, the listing will include new and current shares, and will be open to retail investors.