B2B Payments

Funding Circle Reflects On IPO Plans

Days after confirming plans for an Initial Public Offering on the London Stock Exchange, alternative lending firm Funding Circle has released new details about its goals for the float and market conditions that make it possible.

According to P2P Finance News reports on Monday (Sept. 10), Funding Circle said the IPO plans are part of its strategy to take advantage of current market conditions.

“The directors believe that this is an appropriate time to bring the group to the public market, reflecting the robust foundations established for future growth,” the company said in a statement.

The firm said is plans to raise more than $390 million by going public. With those funds, Funding Circle aims to boost its brand awareness, demonstrate its business model of transparency and maturity, grow its staff with a focus on key management positions, and introduce additional financing solutions for borrowers on its platform.

According to reports, Danish billionaire Anders Holch Povlsen plans to acquire 10 percent of Funding Circle shares via his investment vehicle Heartland A/S so long as the company’s valuation does not surpass $2.15 billion.

“In the last couple of years, Funding Circle has channeled more capital into small- and medium-sized enterprises than all the big banks put together,” said Growth Street Chief Executive Greg Carter, according to the publication. “This shows the potential of new funding models, but I think it should also serve as a wake-up call to the big banks who have drawn back from SME lending since the financial crisis.”

At the time of the IPO announcement, Funding Circle CEO Samir Desai said in a statement that the float “is the start of the next stage” in the company’s trajectory.

Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Numis Securities will serve as bookrunners, previous CNBC reports said.

Elsewhere, other alternative lending platforms have eyed IPO plans. One of the most notable is Australia’s Prospa, which planned to go public but halted the initiative after regulators raised criticism against the company’s contracts with small business borrowers, which Prospa ultimately changed.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.