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Peer2Peer Finance News | July 21, 2019

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Funding Circle posts 55pc rise in revenues as it eyes Canada expansion

Funding Circle posts 55pc rise in revenues as it eyes Canada expansion
Kathryn Gaw

FUNDING Circle has reported a 55 per cent rise in full-year revenues, as it unveils plans to launch two new institutional investor products and expand into Canada.

The peer-to-peer business lender, which floated on the London Stock Exchange last October, posted revenues of £141.9m, up from £94.5m the previous year.

However, pre-tax losses widened to £50.7m from a £36.3m loss in 2017.

Read more: Funding Circle US hits $2bn milestone

Funding Circle said that it planned to continue to “build a highly scalable global business” which will include expansion into Canada in the second half of 2019. This will open up a £45m SME addressable market in the country, “helping creditworthy Canadian SMEs to access the finance they need to grow and stimulate job creation”.

The platform also plans to diversify its funding sources through the imminent launch of two new institutional products – a US asset-backed bond product, and a private direct lending fund in continental Europe. A Funding Circle representative said that these new products will help to quadruple its potential global investor market to approximately £2.5trn.

The platform’s full-year results also revealed that the lender grew the value of its loans under management (excluding property) to £3.15bn in 2018 – a 55 per cent year-on-year increase.
2018 originations (excluding property) grew by 40 per cent to reach £2.29bn over the course of the year.

Read more: Funding Circle lowers projected returns

Funding Circle also reported that its UK lending to small- and medium-sized enterprises (SMEs) in 2018 was higher than all UK high street banks combined. The platform lent £723m to SMEs last year, compared with a combined total of £515m that was lent via banks.

The platform had more than 85,000 global investors at the end of 2018, earning projected annual returns of between five and eight per cent. Almost three quarters (74 per cent) of the platform’s lending came from existing investors in 2018.

Chief executive Samir Desai (pictured) said that he was confident that the firm will meet its growth expectations for the year ahead, as a result of its strong customer base and “exciting” expansion plans.

“Our focus has always been on delivering an exceptional customer experience to both borrowers and investors, leading to strong and consistent repeat behaviour, and I am proud that, in 2018, 43 per cent of our group revenue came from existing customers,” Desai said.

“As we look ahead to the rest of 2019, we remain focused on continuing our strategy of investing for growth and building on our number one market positions across the UK, US, Germany and the Netherlands.

“We have exciting plans to enter the Canadian market later this year and to launch two new institutional investor products in 2019 that will significantly increase the universe of investors who can access Funding Circle loans.

“Funding Circle is in a strong position financially and operationally, and we are confident of meeting our growth expectations for the year.”

Read more: Funding Circle leads P2P presence on women in fintech powerlist