Funding Circle

2010–13; Founding

Samir Desai, James Meekings and Andrew Mullinger, friends from University of Oxford, first discussed the idea of a peer-to-peer lending marketplace in a public house in 2008.[6]

The meeting occurred during the 2007-09 financial crisis, a period in Britain when the banks were cutting back on "lending to strengthen their balance sheets and meet regulatory demands".[7][8] It was in this context that the peer-to-peer lending industry grew rapidly in Britain by providing a needed alternative source of capital.[7]

In 2009 Desai, Meekings and Mullinger quit their jobs to co-found the company that would be launched in August 2010 under the name Funding Circle.[6]

Initially, the company operated as a peer-to-peer lending platform. In 2012 the British government used the platform to lend 20 million pounds ($32 million) to small businesses.[9] From launching in 2010 to October 2013 Funding Circle had facilitated £160 million of loans.[10]

2013–15; Expansion through merging and acquisition

In 2013, Funding Circle raised $37 million in funding led by Accel Partners, with additional participation from Ribbit Capital, Union Square Ventures and Index Ventures, increasing the company's total funding to $58 million.[10][11] This capital raise supported Funding Circle's entry into the US market.[10]

To facilitate its expansion into the US, Funding Circle merged with Endurance Lending Network, a San Francisco-based company founded by Alex Tonelli and Sam Hodges.[12]

In October 2015, Funding Circle acquired Zencap, enabling it to enter markets in Germany, Spain and the Netherlands.[7] In September 2018, the global asset management firm Alcentra agreed to purchase up to $1 billion worth of business loans from Funding Circle's US platform on behalf of its clients. Financed by Credit Suisse, the deal was expected to provide funding to approximately 8,000 US businesses over a three-year period.[13]

2018; Initial public offering

Funding Circle was listed on the London Stock Exchange in September 2018, raising around £300 million at an initial valuation of £1.5 billion.[14] Danish billionaire Anders Povlsen, owner of Bestseller, anchored the offering by agreeing to purchase at least 10%[15] of the available shares. However, shares fell 24% on the first day of trading.[16]

2019–present; Since becoming a public company

Funding Circle reported its first financial results as a public company in 2019, showing a 55% year-on-year increase in revenues but also an increase in pre-tax losses from £36.3 million to £50.7 million. These increased losses were attributed primarily to higher spending on marketing and staffing.[17]

In April 2019, the Funding Circle SME Income Fund announced it would wind itself up and return capital to shareholders.[18] The company subsequently experienced slower revenue growth, citing an uncertain economic environment in July 2019.[19] Media reports linked this slowdown to broader economic uncertainty associated with Brexit rather than fundamental issues with Funding Circle's business model.[20] In August 2019, the company announced that first-half losses had increased by 15%, primarily due to rising bad debts in the UK.[21]

By September 2019, liquidity issues arose, with the Press Association reporting that lenders faced waits of almost 100 days to sell unwanted loans, compared to eight days earlier that year.[22] In October 2019, Funding Circle addressed investor concerns by issuing a communication to clarify the situation.[23] Later in November, Funding Circle's IPO was highlighted in media reports as an example of the broader difficulties faced by UK listings in 2019.[24]

2020–present: Shift to institutional lending

On 9 April 2020, Funding Circle temporarily suspended its secondary market for loan parts, citing uncertainty caused by the COVID-19 pandemic as the reason for the suspension.[25]

On 10 March 2022, Funding Circle announced its permanent exit from peer-to-peer lending, shifting its focus entirely toward institutional commercial lending.[26][27] In July 2024, the company sold its US operations to iBusiness Funding, allowing it to concentrate exclusively on its UK market and products.[28]

October 2024 saw co-founder Samir Desai step down from the board, marking the departure of the last original founder.[29] Lisa Jacobs, who joined Funding Circle in 2012 and became CEO in 2022, continues to lead the company through its ongoing transformation and strategic growth.[30]

In 2024, Funding Circle sold its American arm and made job cuts in an attempt to stem losses and aid its poorly-performing share price.[31]