Three university friends are in line for a combined windfall of £70m after revealing plans for a £2bn float of Funding Circle, the British peer-to-peer lending business they founded eight years ago.
Funding Circle, which allows small firms to tap into a pool of money provided by thousands of investors, aims to raise £300m in a stock market float valuing the company at up to £1.95bn.
They have already secured backing from Heartland, the investment vehicle of the Danish multibillionaire Anders Holch Povlsen, who is the largest shareholder in the online retailer Asos. Povlsen, also one of the UK’s largest landowners thanks to successive purchases of sprawling Scottish estates, has pledged to take a 10% stake.
The chief executive, Samir Desai, said he and his two co-founders, who met at Oxford University, were inspired by tough lending conditions amid the credit crunch. “In 2008 we were seeing small businesses struggling to get access to finance,” said Desai, whose 7.6% stake is worth up to £125m. “It’s a small part of what banks do, but actually quite a big thing for society. We wanted to bring together disaffected parties and get a better deal for all.”
The company offers loans of up to £1m to firms that want to raise capital quickly or have been turned down by a bank. Its model, which relies on sophisticated data analytics, has resulted in the issuance of £5bn of loans since 2010 by matching 50,000 businesses directly with 80,000 investors.
