Funding Circle
Sam Hodges
Co-‐Founder & Managing Director, Funding Circle
Brig and Michelle of Slidebelts
2014 Funding Circle borrower
April 2015
Disclaimer
This document provides general and preliminary information about Funding Circle’s (FC) commercial
lending platform and is intended for initial reference purposes only. It is not a summary or a
compilation of all applicable information and is not complete. This document does not constitute an
offer to sell or the solicitation of an offer to buy securities by FC. There shall be no offer or sale of any
securities by FC without the delivery of confidential offering materials (the “Offering Materials”) and
related documents. The information contained herein is qualified by and subject to more detailed
information in the Offering Materials, including the risk factors applicable to an investment in FC or
the loan pools.
The materials and information contained and described herein are proprietary of FC and may not be
reproduced or distributed in any fashion without FC’s written consent.
2
Capital market evolution is non-‐linear
Marketplace lending, digital wealth management PayPal, credit derivatives
Innovation (log scale)
Early securitization hedge funds, online brokerages
LBOs, new credit markets LIBOR created
Global financial crisis
Tech bubble S&L crisis, ‘94 bond market shock
Fed funds at 17%
Price controls, stagflation
70s
80s
90s
00s
10s
Beyond
3
Lending: ripe for change
Two recurring traits of disrupted industries • Middle-‐men
• Gate-‐Keepers
Banking has both and more
• Information
• Access
• Consumer preference
It’s big – it’s global
4
Solution: Transparency
“I didn’t have six months to wait around for banks or the SBA. Thanks to Funding Circle’s fast and easy process, I’ve never missed payroll and we’re poised to quadruple our revenue this year. For a small business owner, that is huge. That is powerful.”
Pictured:
Dorika Mamboleo Beckett
Founder/CEO
2014 Funding Circle borrower
6
Funding Circle is the preferred platform for SMEs
NPS Score
US Banks
Borrowers that would return to Funding Circle before their bank
10
60
77%
UK Banks -‐11
89
-‐50
0
50
100
7
Huge addressable market ripe for disruption
~$480bn
Annual Originations
~$140bn
~$1bn
Funding Circle Loan Book
UK SME Loans
US SME Loans
Source: Project Merlin, Bank of England, Funding Circle Analysis, Datamonitor, FRB Community Reinvestment Act
Note: UK SMEs defined as businesses <250 employees US SME loans defined as <$1m loans to small and medium sized businesses –
has been adjusted to account for loans >$1M to SMEs (+20%)
8
Funding Circle: A global leader in marketplace SME lending
FC Quarterly New Lending ($m)
Lending over $1B to thousands of small businesses since 2010
Lending ~$75m per month*
Lending ~$75m per month (Q4 2014)
FC Originations
200
180
160
140
120
100
80
60
40
20
0
Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 ' 14 Q2 ' 14 Q3 ' 14 Q4 ' 14 Q1 ' 15
*Q4’14
**Exchange rate of $1.52 USD/GBP
While industry growth has been impressive…
10
We’re just getting started
You
are
he
re
11
Marketplace = global
12
We’re building a better financial world