Funding Circle’s chief executive and co-founder Samir Desai is stepping down after 12 years at the helm, to be replaced by UK managing director Lisa Jacobs.
Desai (pictured), who is one of the best-known figures in the industry, will transition to a new role as non-executive director on 1 January 2022.
Lisa Jacobs joined Funding Circle in 2012 as chief strategy officer and was promoted to managing director of the UK business in 2019.
The announcement comes as the peer-to-peer business lending platform unveiled better-than-expected first-half results, with adjusted core earnings and operating profit both beating previous guidance.
Desai said that he was leaving the helm of Funding Circle with the business “in the strongest place it’s ever been”.
“I’m a long-term committed shareholder in the business, a big believer in Lisa and all the new products we’re doing,” he told Peer2Peer Finance News.
Funding Circle reported adjusted core earnings of £53.3m for the six months to 30 June 2021, up from a £84.1m loss in the first half of 2020.
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Operating profit came in at £35.5m, up from a £113.5m loss the previous year.
“We’ve been very focused on the technology platform and continuing to improve that,” Desai said.
“We’ve now reached a new milestone of having 60 per cent of the loans getting an instant decision which leads to a better borrower experience, higher conversion, and means we can scale to larger levels of volumes without necessarily having to add lots of people.
“The other part of it is obviously there’s been a big shift online…more and more small businesses are looking for loans online and as the largest online small business loan provider we’ve benefitted from that.”
Funding Circle posted record loans under management of £4.93bn for the first half of the year, a 33 per cent year-on-year increase.
Participation in government-backed loan schemes on both sides of the Atlantic has played a key part in Funding Circle’s lending over the pandemic. Desai would not disclose the split of government-backed loans and non-government-backed loans on the platform but said that the proportion of core loans is continuing to grow as the economy destresses.
Funding Circle said it expects adjusted core earnings to be skewed towards the first half of the year and predicted adjusted core earnings in the second half to be in the “low single digit millions”.
Desai said the guidance for a weaker second half reflected “the transition we’ve had to do” away from government-backed loan schemes.
“When we changed the loan products we were offering in both the UK and the US, there was a period where basically we had to stop lending, move all our systems across and start originating loans,” he said.
“We also sensed there was some caution in the market from small businesses but we expect that to abate as the year goes on and we expect to accelerate our lending, we just don’t know exactly when.
“We’ve been prudent as always with our guidance but we take it very seriously.”
Funding Circle’s share price was up by 8.6 per cent to 151.60p by mid-morning trading.