No shares sold by Funding Circle’s biggest backers in IPO

By Ryan Weeks on Friday 12 October 2018

Editor's PickAlternative Lending

Neither Index Ventures nor Accel sold any shares in Funding Circle’s £1.5bn float.

Funding Circle has had a fairly turbulent start to life as a publicly traded company, losing close to a quarter of its value in the first week of trading. It now transpires that the firm's two biggest backers, Index Ventures and Accel Partners, are along for the ride.

Index and Accel were Funding Circle’s two biggest shareholders going into the float, holding around 20 and 9 per cent of the company respectively.

As part of the offering, Funding Circle’s significant shareholders – effectively its management team and board members (including major investors) – had the chance to offload either a quarter of their shares or nothing.

Following the admission of shares to the main market of the London Stock Exchange, significant shareholders were then locked-in to their holdings for a period of 365 days.

According to regulatory filings, Funding Circle’s CEO Samir Desai, who held 7.7 per cent of the stock, sold a quarter of his shares as part of the offering. But neither Index nor Accel followed suit, instead choosing to hold their shares and weather the first year of trading, come what may.

“None of Index, Accel or DST sold in the IPO. Actions speak louder than words and you would think that demonstrates their commitment to and belief in the business and its future prospects, particularly now that it’s listed,” said Mark Austin, a capital markets partner at law firm Freshfields, who advised Funding Circle on the float.

Late-stage venture investor DST Global led Funding Circle’s $150m Series E round in April 2015.

Staying put seems a bold play for the trio of investors, given the precedent set by Funding Circle’s US counterparts Lending Club and OnDeck, which are down to $3.40 and $6.90 per share respectively, having listed in late 2014 at around $25 per share.

Index and Accel are regarded as two of the world’s premiere venture investors, having backed many of the world’s best-known technology firms, including the likes of Facebook, Deliveroo and Slack.


Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.