Internet lender Funding Circle is plotting to float on the stock market within the next fortnight, with a value of £1.5 billion.
The company, which allows savers to lend their money directly to businesses and get paid interest, is seeking cash to expand in the US and Germany.
The Mail understands the London listing will take place in the second week of September, earning its founders millions.
The revelations come just days after car maker Aston Martin said it hopes to go public in a £5 billion listing this year.
Funding Circle will be the first peer-to-peer (P2P) lender to join the UK public markets, in a sign that the industry is coming of age. The float is expected to make it one of Britain’s most valuable financial technology firms.
It will also be likely to value the stakes of founders Samir Desai, James Meekings and Andrew Mullinger – former Oxford University students who set the firm up in 2010 – at tens of millions of pounds at least.
The firm has so far issued more than £5 billion of loans to over 51,000 businesses, and been used by 80,000 investors including ordinary people, City firms and the British Business Bank.
It has appointed Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Numis Securities to oversee the float, which is likely to happen in the second week of September.
When the business last raised cash in January 2017, it was valued at £900m, making it one of a handful of British tech ‘unicorns’ which have a value, in US dollar terms, of $1 billion or more.
P2P lending burst into life after the financial crisis, when savings rates at the banks plunged and lending dried up.
It has since ballooned into a market worth £10bn but some City figures have raised concerns over the way the industry operates. They fear that disreputable companies may be encouraging savers to lend cash to borrowers unlikely to pay it back.
There are also fears that P2P customers have never faced the test of a major financial crisis. And if High Street savings rates were suddenly to rise significantly, critics fear investors would pull their money out of P2P and put it into a safer bank account.
BORN OUT OF THE CRISIS
Every Thursday night for a year, the founders of Funding Circle gathered in each other’s kitchens to discuss plans for a new internet lender.
Samir Desai, James Meekings and Andrew Mullinger, friends from their days at Oxford University, realised that after the financial crisis, businesses were not getting support from banks. ‘You just read all over the papers how there were good, strong businesses, not being able to access finance to grow,’ Meekings said.
They set up a new kind of business in 2010, letting savers lend money to companies, without a bank in the middle.
Funding Circle has always claimed its borrowers are carefully vetted and its portfolio is extensively tested to ensure it could survive a downturn.
City observers are expecting demand for shares to be high. Russ Mould of investment firm AJ Bell said: ‘It’s a pretty strong story and there’s clearly still appetite in this industry. I can see why there would be interest.’
It comes amid a deal-making frenzy which has seen 23 floats on the London main market from January to July, with companies worth a total of £12.4bn listing.
Funding Circle last night declined to comment.