IPO

Funding Circle Valuation May Soar To $2.4B

Funding Circle, the peer-to-peer lending company that is gearing up to launch an initial public offering (IPO), could be valued at as much as $2.4 billion.

CNBC, citing the U.K. FinTech, reported the company is pricing its IPO at a range of 420 pence to 530 pence per share. The IPO will be made up of a maximum of 71.4 million new shares and a secondary offering that has yet to be determined, noted the report.

Although a date for the IPO hasn’t been determined yet, Funding Circle plans to list on the London Stock Exchange, aiming to raise £300 million. For the first six months of the year, Funding Circle had revenues of £63 million, up from £40.9 million in the first half of last year. Losses of £27 million were wider than the first half of last year, when the losses were £19.2 million, reported CNBC.

The pricing of the IPO comes just days after the company disclosed that more borrowers have defaulted on loans issued by Funding Circle’s U.S. operations more than previously in 2018. According to Peer2Peer (P2P) Finance News reports from Friday (Sept. 14), the Funding Circle SME Income Fund (FCIF) revealed there were seven corporate loan defaults during the month, up from the year’s average so far of six per month. “The company has been advised that this outcome is well within normal month-to-month statistical variability, and U.S. credit performance as a whole remains in line with expectations,” the FCIF said in a statement.

Still, the company noted, the value of those defaults has inched higher, too. Reports said the FCIF’s net asset value return for August dropped to 0.1 percent from 0.4 percent a month prior, with analysts citing rising impairment charges as a result of the U.S. loan defaults. “The benefit of higher income and cash receipts from the enhanced leverage will be felt from September onwards,” the fund added.

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