Funding Circle

What I didn't expect was to spend now a majority of my career working with UK scaled companies that are starting to come to the US, and then we bring them to market and scale from there.

So I started with Funding Circle, which is an early fintech from years ago,

And that's where you met Sameer, is that right? That's exactly right.

So Sameer was the founder of Funding Circle.

And then it's been a harmonious relationship ever since.

So it's amazing when you get to full circle.

So yeah, the OGs are all back and a lot more mature, a lot more pedigree, a lot more scarce.

All that actually brings a lot to the table.

yeah

the other one i would i would watch as well i mean i know time has been taken out as a subprime that's a business to loans but but it's gonna it's going all anything subprime or anything at the you know the high level i mean i would i would i would just have just be careful how you do with with funding circle because the reason why i say that

is that

some of that business is a credit card business to you know small companies yes true but and that takes all on their balance sheet you know it's all the credit card risk and stuff so short-term loans people walking away i mean all i would say because but you know most i don't know but i bet you a lot of their companies you know they're one-man bands basically yes you know and they get a loan and get a credit card on the back of it and that's it and if they're starting in their personal lives to, you know, effectively go delinquent on their bills, not pay their bills, then they're probably going to be doing the same.

But so, yeah, they'd certainly be the next one in line.

I mean, another kind of interesting aspect is, yeah, this this waterfall thing of are they going to use securitization for, you know, kind of funding this this big portfolio acquisition? Because obviously Waterfall is, you know, pretty well known for, you know, securitizing assets, which it purchases from other originators, like whether it be Funding Circle, Pepper, Selina Finance in, you know, sort of the SME or RMBS kind of spaces.

The other kind of interesting aspect is whether we'll see sort of more forward flow interest in kind of these assets.

Because I think one of the big sort of themes of, I mean, certainly this year, I guess it may have been going on a little bit longer, but we've certainly seen less kind of bank participation in RMBS in terms of banks securitizing assets with which they originate.

I've mentioned this several times, but...

I've talked about the fundamentals of funding circle before.

I also mentioned last week, if they do tax the banks, that's good for funding circle.

Already the bank's not loaning to small and medium-sized enterprises.

Since 2008, you know, higher capital buffers are required due to regulation.

And so basically went from unsecured to secured and all that stuff.

And so this opened up the market for alternative finance providers.

Funding Circle's platform is phenomenal.

And it is, you can see how the growth, the growth, you know, is, is relying on the sort of banks.

Um, but if they do this, if they raise tax on banks, this is a good s- I think a, a beneficiary of this will be Funding Circle, and I explain why.

The entire modern alternative finance industry, including companies like Funding Circle, Time Finance, all that, OakNorth, and the wider credit center, was created post-2008 because of the regulatory fallout of the great financial crash.

All right? You know, banks had to raise their capital one, their Basel III.

The Basel III rules had to raise their capital, um, you know, protection buffers, all that stuff.

So you have to be a bit more selective on the businesses you loan to, all that stuff, and you take all the high-risk stuff off your books pretty much.

So this created a gap in the market for alternative funding.

Right? And if you look now, you know, banks pretty much, high street banks almost ignore small and medium-sized enterprises, and it's created an entire new sector for people like, you know, Funding Circle.

So I did a presentation on the digital transformation of finance, and this is when Monzo was a startup, Revolut was a startup.

So canned all the graduate programs that I was meant to be on and actually went to a I guess like a startup at the time, it was called Funding Circle.

They just IPO'd, so I went on as a graduate as an account manager.

Funding Circle today is the UK's largest lending platform for small businesses.

So I was really blessed to be there, was really keen to just learn more about the business.

So I was account manager for a few years and then ended up in the world of product.

Yeah, I think it's a lack of advocacy.

I think we really underestimate product inclusion and usability.

Yes

... a fun- funding circle.

They basically-

Oh, yes

Yeah, yeah, yeah.

What was your take anyway from that, uh, conversation?

conversation?Well, I already like Funding Circle, so I thought, well, I want to meet companies.

This is at the Cavendish Conference, um, who very kindly...

Uh, a bit hungover today, I've got to admit, because I was out on the tiles in the city last night meeting, uh, all sorts of companies.

I had some really good, interesting meetings with Aluma- Alumask, Brickability, and, um, what was the other one? Funding Circle.

All very interesting.

I ran into the management of Couth as well, had a nice chat with them and, uh, all sorts of, um, share ideas were flagged by lots and lots of different people I spoke to, so.