Finance Rebecca Smith · 30 July 2015
Funding Circle aims to raise 150m to invest in small business loans
P2P loan provider Funding Circle is aiming to raise 150m for the launch of an investment trust later in 2015. It has become the first P2P platform to float its own fund. The online marketplace’s SME Income fund will invest in small business loans originated on the P2P lender’s platforms in the UK and in the US. The fund will target an annualised dividend of six to seven per cent without using leverage and will set itself apart from existing players by charging no fund management or performance fees. Funding Circle will pay a one per cent annual servicing fee to use the platform like all lender-investors, which makes up an underlying charge. In the past five years, Funding Circle has leant 741m to thousands of businesses across the UK and US, operating much in the same way as some of the world’s most successful tech companies. It recently added banking industry veterans to the executive team, with the previous head of global risk analytics at Barclays, Jerome Le Luel, becoming global chief risk officer. Manpreet Dhot joins as the new USA chief risk officer, after 13 years at American Express, where he had assessed consumer and commercial risk, including the company’s small business portfolio. Dhot said: Funding Circle has created a truly transparent marketplace that provides businesses access to affordable and appropriate credit products and investors the ability to build a diversified portfolio. This is a winning combination and I’m excited to join a company focused on serving the small businesses many banks have left behind. In April 2015, Funding Circle raised $150m for its Series E round from investment groups, led by New York based BlackRock and Russian VC firm DST Global. The latter is run by YurI Milner, who had previously backed Facebook and Airbnb.’several previous funding rounds had been led by Index Ventures.
ABOUT THE EXPERTRebecca Smith
Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.