Loaning Circle ready for listing: £ 1.65 billion IPO
The P2P pending lender for businesses announced this with a blog post: it will land on the London Stock Exchange by the end of the year (probably already in October)
The announcement was made through the Net, where everything starts and where everything is done for FinTech. In a blog post , loaning Circle , the British who changed the world of loans to small and medium-sized businesses in the Old Continent, officially declared in early September that it will be the first European FinTech to enter the market . A decision that represents a loanamental step in the group’s growth path: a dizzying path that saw loaning Circle, from its foundation 8 years ago to today, lending “more than 5 billion pounds to 50 thousand companies worldwide”, guaranteeing to investors “interesting returns while supporting job creation in the United Kingdom, USA, Germany and the Netherlands.”
The IPO, which could be launched as early as October, will cover new and existing shares and will also be open to retail investors. The objective of the listing on the London Stock Exchange is a collection of 300 million pounds, which will be used to strengthen the budget and grow brand awareness: thanks to these proceeds it will be possible to attack new geographical markets. But among the side effects there will also be a practical demonstration from the point of view of the maturity, transparency and governance of the company: this at least is the message of loaning Circle for investors and applicants. And it is certain that this event will again change the face of FinTech in Europe, probably dragging behind other quotations – Zopa and LendInvest are the best candidates. And by placing the loan portals in the marketplace on the same ground as traditional banks, at least in Britain.
loaning Circle, in particular, has in fact already been replaced by the City banks in the SME loans sector – those that traditional institutes finance less and less and which, through a referral scheme, automatically direct the platform. Yet it has not yet reached break even : according to the documents it presented for the listing, the financial statements showed a red of 35.3 million in 2017 and 46.6 million the year before. But this does not seem to discourage investors who are eagerly awaiting the evolution of the story of this FinTech unicorn so as to be ready to aim for up to 1.65 billion pounds . At this value, Anders Holch Povlsen, owner of the Heartland A / S holding and the fast fashion Bestseller chain, said he was willing to buy 10% of the shares.
In 2015 loaning Circle had quoted the loaning Circle SME , the P2P lending loan for SMEs that in the first year had divided a dividend of between 6 and 7% and aimed at a yield of between 8 and 9% when fully operational ( we talked about it here ). In short, really a hen with golden eggs.
How could the structure of the company change after the listing? To try to hypothesize it, it is first of all necessary to look at the current corporate structure . According to AltFi , which cites the official documents presented by loaning Circle to the LSE, the largest shareholder is Index Ventures, with a 20% stake, followed by the venture capital Accel and Union Square Ventures, which respectively own a share of 9, 1% and 7.3%. Samir Desai, CEO and co-founder, has a 7.7% share, while the other co-founders James Meekings and Andrew Mullinger, respectively 4.7% and 4.2%. If we take the maximum valuation of 1.65 billion pounds, the share of Desai would have a value of 127.5 million.
The thousand employees are in turn members: but they will not be able to participate in the IPO. As well as the large shareholders who will only have the opportunity to sell 25% of their share (if more than 0.25% of the total value of the group). This 25% will not end in the float but will be secondary capital. Furthermore, for the members of the board and management, a lock-in period of 365 days is envisaged, during which time they will not be allowed to trade in the stock, which is instead granted to employees. The lock-in lasts 180 days for large shareholders who do not have significant roles on the board.
The quotation is close. And so the next step of the European FinTech, more and more recognized and recognizable, increasingly an engine of growth of the real economy.