VC-backed Funding Circle seeks up to £1.8bn in IPO

Kenny Wastell
19 September 2018

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VC-backed peer-to-peer lender Funding Circle has announced the price range for its IPO on the London Stock Exchange, in a listing that will value the company at ТЃ1.4-1.8bn.

The offering will consist of up to 71,428,571 shares valued at 420-530 pence apiece and will look to raise gross proceeds of £300m. It also includes an overallotment option of up to 10% of the total number of shares included in the offer.

The proceeds will be used to enhance its balance sheet and give it flexibility to pursue expansion opportunities in its existing markets and new geographies.

The business stated that existing shareholders are entitled to sell up to 25% of their shares via the placement, though it added that no shareholders have stated their intention to exercise the option to date.

The peer-to-peer lending platform has raised more than £250m over six funding rounds, according to Unquote Data.

London-based VC firm Index Ventures was among the earliest backers, leading a £2.5m series-A round in April 2011 before teaming up with Union Square Ventures for a £10m series-B a year later.

The company's US launch was supported by a $37m series-C round led by Accel Partners in October 2013, and another US VC firm, Ribbit Capital, joined to provide a $65m series-D in July 2014.

Since then, Funding Circle has continued to expand internationally and has secured two additional large funding rounds. It raised a $150m series-E from global investment firm BlackRock and Singapore-based Temasek in April 2015, and an £82m series-F from all previous investors including UK investment firm Baillie Gifford and German VC Rocket Internet in January 2017.

Merrill Lynch, Goldman Sachs and Morgan Stanley are acting as joint global coordinators and joint bookrunners in the process, while Numis Securities and Merrill Lynch are acting as joint bookrunner and sole sponsor respectively.

Founded in 2010, Funding Circle is a peer-to-peer lending marketplace that facilitates investments from a wide range of individuals and financial institutions. It mainly caters to small businesses seeking capital from a wide range of investors, claiming to improve competition in the market, create jobs and reduce dependency on bank lending. The business generated a turnover of £94.5m in 2017, according to publicly available documents.