RateSetter’s acquisition by Metro Bank represents one of the most significant deals in the peer-to-peer lending space, but it is just the latest in a long line of deal activity – and rumours – at the P2P lending platform.
Peer2Peer Finance News looks at RateSetter’s history of acquisitions, mergers, IPOs, and more…
Read more: What’s happening at RateSetter?
2010: RateSetter launches
RateSetter launched to market a decade ago, allowing retail investors to fund a variety of loans through a unique model where they can set their own rates.
Over 84,000 customers have invested more than £3.9bn in the platform, which lends across the property, consumer and dealer finance sectors.
December 2014: RateSetter acquires P2P lender’s loanbook
The P2P giant took on the loanbook of fellow P2P lending platform GraduRates, which specialised in funding loans for postgraduate study.
GraduRates, which launched in 2010, had decided to run down its operations ahead of upcoming new regulation. These required platforms to make contingency arrangements to ensure that loanbooks would be managed to maturity in the event of a failure.
2016 and beyond: Bad debt sales
RateSetter has sold off books of its non-performing loans on a number of occasions.
In December 2016, the platform sold £2.1m-worth of non-performing loans to specialist debt purchaser 1st Credit, in what was said to be the first deal of its kind by a UK P2P lender.
In April this year, RateSetter sold £4.65m of non-performing loans – comprising two books of bad debt written across all years of lending – to an anonymous buyer.
Both times, the platform put the proceeds into its provision fund, which acts as a backstop for investors on the platform, covering their losses in the event of loan defaults.
2017 and beyond: IPO rumours
RateSetter UK was previously rumoured to be considering a public listing, with chief executive Rhydian Lewis saying in 2017 that he was eyeing an IPO as a pivotal step to solidify the platform’s position as an “investor brand” and the next “natural step” for the lender.
2020: RateSetter Australia’s IPO plans
In January it was revealed that RateSetter Australia was considering an IPO this year at the value of AUS$300m (£157.6m).
The P2P lender, which is minority-owned by the ‘big three’ UK P2P firm, reportedly sent a request for proposal to several investment banks and brokers the previous month.
If successful, RateSetter Australia would be listed on the Australian Securities Exchange. In June the firm announced it was still preparing for a stock market offering and had appointed advisers Highbury Partnership and Bell Potter to help the firm prepare for a flotation on the exchange.
August 2020: The Metro acquisition
After entering into exclusive talks in June, early this month RateSetter was acquired by Metro Bank for an initial consideration of £2.5m, with up to £9.5m to be paid out after the deal has been completed.
RateSetter will continue to operate as an independent platform under the Metro Bank banner.
Following completion of the acquisition Metro Bank will fund RateSetter’s unsecured personal loans while secured lending commitments will be funded by the platform’s P2P.