Funding Circle Partners with Stripe
January 23, 2019
Funding Circle announced this morning that it has joined the Stripe Partner Program, which will allow the company to provide financing to Stripe customers in the United States. Funding Circle is a small business loan funder that offers fully amortizing small business term loans. Their loans range from $25,000 to $500,000 and have terms between six months and five years.
“We’re excited to work with Stripe to connect even more business owners with the affordable capital they need to go further,” said Bernardo Martinez, U.S. Managing Director of Funding Circle. “Funding Circle and Stripe are both dedicated to helping companies scale their businesses in the digital age, ultimately creating jobs, opportunities, and driving growth in the broader economy.”
This is Funding Circle’s first integration partnership with a payments platform in the U.S. With the partnership, Funding Circle gets access to Stripe’s small business owners, but Stripe also wins by providing more services to its customers.
“We are enabling Stripe customers to finance their growth and the end result is that, as these companies grow, [Stripe] has a higher number of payments go through their system,” said Martinez.
No money will exchange hands between Funding Circle and Stripe, Martinez said. While this partnership will start with Stripe’s U.S. small business customers, Martinez said that Funding Circle is excited about the opportunity to scale with Stripe, which serves customers internationally.
Funding Circle is not the only small business lender that has partnered with Stripe. Another company called Bitbond, based in Berlin, is listed on the company’s Stripe Partner Program.
Founded 2010, Funding Circle is headquartered in London and has lent $8.6 billion to 62,000 businesses globally. Listed on the London Stock Exchange as FCH, the company employs about 1,000 people and has offices in San Francisco and Denver.
Funding Circle Stays Global; Goes Public in London
September 29, 2018
Funding Circle became a public company yesterday on the London Stock Exchange, listed as FCH. Founded in 2010, the peer-to-peer lending platform for small and medium-sized businesses, was initially priced at 440 pence (£4.40), which was on the low end of the 420-530 pence per share price range. But it opened at 460 pence, placing the value of the tech company at roughly £1.5 billion, or $2 billion, according to a Reuters report. In conjunction with the company’s IPO, it raised approximately £300.
The stock price dropped below the initial 440 pence per share on Friday to 435 pence, but went back up by the end of the day. The company was founded by Samir Desai, James Meekings and Andrew Mullinger, who all met at a pub in Oxford, England, according to a University of Oxford publication. Desai and Meekings were both studying Economics and Management at the university.
Among the company’s investors are Union Square Ventures, Blackrock and Index Ventures, in addition to a £150 million investment from Danish billionaire Anders Holch Povlsen.
According to the company’s September 2018 prospectus, Funding Circle’s total revenue has steadily increased over the past few years with $32 million in revenue in 2015 and $50.9 million and $94.5 million in 2016 and 2017, respectively. The company has facilitated £5 billion in loans its inception in 2010.
In August, Funding Circle rebranded with a new logo, and in June, the company expanded its partnership with Kansas-based INTRUST Bank, strengthening it presence in the U.S. market. Funding Circle offers small business financing from $25,000 to $500,000 with repayment options up to 5 years. While headquartered in the UK, the company also services customers the U.S., Germany and the Netherlands. Its headquarters is in London and it also has an office in San Francisco.
Download Funding Circle’s 256 Page Prospectus
September 23, 2018Funding Circle, the international peer-to-peer small business lender whose US subsidiary funded approximately $500 million to small businesses last year, is planning to go public on the London Stock Exchange. While the UK is their primary market, they ranked just below Yellowstone Capital in US funding volume last year at a level that is about 1/4th the volume of OnDeck, a direct competitor.
72 percent of their business is generated through direct marketing, while the rest comes from indirect or “intermediary” channels, the company says.
CNBC reported that the company could be valued as high as $2.4 billion.
Funding Circle Expands Partnership with INTRUST Bank to Support More US Small Businesses
June 27, 2018
Yesterday, Funding Circle and INTRUST Bank announced the next phase of their strategic partnership, which helps provide capital to American small businesses. This second phase increases INTRUST’s funding commitment and initiates a targeted, co-branded marketing campaign, giving business owners across Kansas, Missouri, Oklahoma, and Arkansas greater access to fast and flexible financing. To date, over 150 American small businesses have received loans backed by INTRUST through the Funding Circle platform. This new increased commitment is anticipated to bring the number of funded small businesses to more than 500.
“This collaboration is a good example of the ways traditional and innovative financial service providers can work together to help small businesses prosper,” said Chief Financial Officer of INTRUST Bank Brian Heinrichs.
“Not only has INTRUST recognized the investment opportunity available through the Funding Circle platform, but this expansion underscores that Funding Circle’s loans are often the best option on the market for American business owners seeking growth capital,” said Funding Circle’s US managing director, Bernardo Martinez. “We view our partnership with INTRUST as a blueprint for the remaining geographies within the US.”
Funding Circle has been among the top five alternative small business funders in the US over the last several years. And earlier this month, the company released a report that demonstrated the demand for alternative financing among small business owners.
Founded in 2010, Funding Circle is a small business loans platform in the US, UK, Germany and the Netherlands, that matches small businesses that want to borrow with investors who want to lend. Investors include more than 70,000 retail investors, banks, asset management companies, insurance companies, government-backed entities and funds worldwide.
Funding Circle Report Shows Demand for Alternative Financing
June 14, 2018
Funding Circle, together with Oxford Economics, released a report this week using data from its customers last year. Funding Circle is a business loan platform that matches small business borrowers with investors that want to lend. Some of these findings may be reflective of the broader alternative finance market.
Data from the report conveys that there is an increased appetite among small business merchants for online lending products. Of the small business customers surveyed, 70 percent did not attempt to get a bank loan before applying for an alternative loan from the Funding Circle platform. The main reason for this, cited by more than three-quarters of these customers, was a perception that the bank loan process would be too burdensome. Another nine percent skipped banks because they said they thought they would be rejected.
Of the businesses that had first approached a bank before seeking funding from Funding Circle, 50 percent said they didn’t obtain a bank loan because their application was rejected. Another 36 percent responded that the bank loan process took too long, and seven percent felt that the bank’s rates and fees were too high.
When asked about the impact of not receiving funding through Funding Circle (or we can imagine a different online funder), the most common response, given by 27 percent of respondents, was that they would have missed an opportunity. After this, 22 percent believed they would not be able to consolidate their debt and 16 percent thought that they would not have been able to achieve profit growth.
Loan volume in the U.S. rose significantly for Funding Circle last year. A total of $509 million in new loans were issued in the U.S. in 2017, an increase of 80 percent from $281 million issued the previous year.
“It has become evident that small businesses are underserved in every country we operate,” said Funding Circle co-founder and CEO Samir Desai. “From butchers and bakers, to IT consultants and accountants, these are the businesses that are creating jobs, boosting productivity and driving our economies forward. The economic impact that these businesses have had as a result of accessing finance through Funding Circle is hugely rewarding to see.”
Founded in 2010, Funding Circle has helped 40,000 small businesses find financing. The company operates in the U.S., U.K., Germany and the Netherlands.
Funding Circle Rebrands
August 10, 2017Funding Circle is ditching their old circular logo with arrows in favor of a more modern purple logo. The website has also undergone a redesign as well.
On the new website, the company states that they are “revolutionising a broken system” and emphasize that “we believe in those made to do more.”
In a recent interview with AltFinanceDaily, Sam Hodges, a co-founder and U.S. managing director of Funding Circle said, “We are focused on building a world-class technology platform that can handle millions of transactions daily and deliver a best-in-class customer experience for borrowers and investors,” Hodges told AltFinanceDaily.
Funding Circle’s Hodges Talks $250 Billion Opportunity
August 3, 2017
Funding Circle, a marketplace that matches small businesses with lenders, broke a new barrier in the first half of 2017 with an 80 percent spike in global lending by about GBP 800 million. The U.S. marketplace lending arm, which was merged with UK-based Funding Circle in 2013, has experienced rising momentum over the same period.
Sam Hodges, Funding Circle co-founder and U.S. managing director, told AltFinanceDaily that small business lending remains an underserved and untapped market, attaching a USD 250 billion value on the annual lending opportunity.
“I co-founded Funding Circle in the U.S. after experiencing firsthand how hard it is for established, successful businesses to access financing from the traditional banking system. The traditional banking system is broken and restricted by legacy issues, and most banks don’t view smaller-ticket commercial lending as their bread and butter.”
Since 2010, when Funding Circle was launched, investors including 60,000-plus individuals, financial institutions and the UK government have poured more than USD 4 billion into 32,000 businesses globally.
Currently the Funding Circle U.S. platform is only open to accredited and institutional investors. “Over time, we would love to offer this investment product to anyone in the U.S.,” said Hodges.
He further explained that Funding Circle marketplace enables investors to diversify their fixed-income portfolios with secured business term loans. All of the loans on the Funding Circle platform are pre-screened with a risk-rating and coupon rate attached, ranging from 4.99 percent to 27.79 percent, by seasoned credit professionals using proprietary data analytics.
“While there will always be some risk attached to any type of investing, Funding Circle concentrates on providing loans to established businesses that have operating history, cash flow and a strategic plan for growth,” said Hodges.
Main Street USA
Funding Circle borrowers have typically been in business for around a decade and generate annual revenue of $2 million with a staff of about 10 people. One key differentiator from the likes of industry giant Amazon Lending is that borrowers on the Funding Circle platform could be brick and mortar shops.
“Amazon is an impressive organization, but what we’re doing is different in a variety of ways. Where they are focused on helping merchants that sell on their marketplace, our borrowers include restaurateurs, gas stations, medical clinics, construction firms, IT consultants and more,” said Hodges.
He went on to describe Funding Circle borrowers: “Walk down Main Street in any American town, and you’ll see examples of our borrowers. These are established businesses who have been underserved by the traditional financial sector — they have assets and cash flow to secure loans, and a legitimate plan for growth. We actually have many borrowers who choose our loans over a traditional bank loan, because they are faster and easier.”
Full Circle
Funding Circle started off the year with a bang, having raised USD 100 million in equity capital to help accelerate growth not only in the U.S. but also the UK and continental Europe. Meanwhile the startup continues to invest heavily in technology and talent.
“We are focused on building a world-class technology platform that can handle millions of transactions daily and deliver a best-in-class customer experience for borrowers and investors,” Hodges told AltFinanceDaily.
Along those lines, Funding Circle recently bolstered its executive team both stateside and globally, including the recent addition of Sean Glithero as CFO, who is to be based in London when he begins in his new role this fall.
“Sean shares our enthusiasm for building a better financial world by revolutionizing the financial system and securing a better deal for everyone. Sean’s record at Auto Trader, helping drive strong profit growth and shaping a digital marketplace into a dominant position, makes him ideally suited for this role,” Hodges said.
Meanwhile the U.S. executive team is also expanding, evidenced by the recent additions of Joanna Karger as U.S. Head of Capital Markets and Richard Stephenson, who joined as U.S. Chief Compliance Officer.
He is taking the reins of a balance sheet whose UK business achieved profitability in the first half of 2017. “Here in the U.S. we are doing quite well and continue to invest in growth” concluded Hodges.
Revisiting Funding Circle
July 21, 2017Funding Circle’s SME Income Fund delivered profits last year not only in the UK segment, but also in the US segment, according to sources. As the UK is Funding Circle’s home market, it naturally generated more revenue from it, but the margins were actually a lot higher in the US. The Fund’s 12-month calendar year ended on March 31st. The performance doesn’t reflect Funding Circle’s operations as a whole, just the publicly traded fund used to make loans through the company’s platform.
The fund’s Net Asset Value has reached £164.8M, Peer2Peer Finance News reported. Investors received dividends equal to 6.5 pence per share over the last year.
Funding Circle the company, has not filed its year-end 2016 financials yet. As a private limited company in the UK, they’re still a couple months away from the deadline to do so. In 2015, they lost £18M on £23.8M in revenue, which they attributed to their growth strategy.
Unlike with Lending Club and Prosper, anyone investing in a Funding Circle loan in the US must be accredited. Funding Circle Securities is the affiliated broker–dealer of Funding Circle USA. Lending Club and Prosper have a special arrangement with the SEC to work with retail investors. As part of that, every single loan on their platforms must be filed with the SEC as an individual security complete with a full prospectus.
Earlier this month, Funding Circle hired a new Global CFO, Sean Glithero, who was previously the CFO at Auto Trader.
