Funding Circle’s losses double
FUNDING Circle saw its losses double to almost £40m last year, as expanding overseas took its toll on the peer-to-peer platform’s balance sheet.
The London-headquartered firm has been investing heavily in the business in order to grow its presence in America and Europe. Revenues rose from £13m to £32m over the period, according to The Sunday Times, who reported the figures.
“You’re not going to be able to build on the same scale as those coming out of the US and China unless you have a global perspective — and that takes time and money,” chief executive and co-founder Samir Desai was quoted as saying.
Last year Funding Circle expanded its business to Germany, Spain and the Netherlands by acquiring German P2P platform Zencap, which lends to small- and medium- sized businesses.
The company, which was valued at $1bn (£770m) last year, now employs 600 staff across five offices worldwide. It is the UK’s third-largest lender to small businesses, after high-street banks RBS and Lloyds.
Funding Circle is not the only UK platform to report a rise in revenues while swinging into the red. Last week, rival RateSetter unveiled a £4.6m loss for the last financial year, but its revenues rose 46 per cent to £18.5m. It attributed the loss to a new fee structure and investing in the business.
Funding Circle, which was founded in 2010, has lent out more than $2bn to 15,000 businesses in the UK, USA, Germany, Spain and the Netherlands.
It is backed by institutional investors including Baillie Gifford, BlackRock and Temasek, alongside well-known City figures such as Carphone Warehouse co-founder Sir Charles Dunstone.
Funding Circle will be publishing its full accounts for the last financial year on Tuesday. Keep an eye on the Peer-to-Peer Finance News website for the latest updates and analysis.