P2P lender Ratesetter to hit £280m valuation

Image: Ratesetter has set its sights on the London stock market

By Mark Kleinman, City editor

One of the UK's largest peer-to-peer lenders is in talks about a £30m fundraising that is expected to be a prelude to a long-awaited effort to join the London stock market.

Sky News has learnt that Ratesetter has kicked off talks with prospective backers in the last fortnight about injecting fresh funding into the company.

Sources said this weekend that the latest funding round was expected to value Ratesetter at about ‎£280m.

That would represent a modest premium to its price tag when it last raised money just over a year ago.

Ratesetter, established by co-founder and chief executive Rhydian Lewis‎, has lent more than £2.5bn to date, underlining the growth of P2P lending as an asset class.

Investors have so far earned more than £100m from the platform, while its inaugural ISA product has attracted over £80m of subscriptions.

Ratesetter has, however‎, experienced difficulties in line with the nascent P2P sector - notably last year when it was hit by £80m of problem loans.

The company insists that no investors have lost money because of its Provision Fund, although the boss of the City regulator has raised concerns about the risk that these pools of cash could "trend towards being misleading".

Existing investors in Ratesetter include Woodford Investment Management, the firm headed by Neil Woodford, one of the City's best-known fund managers.

Mr Lewis had indicated that any fundraising subsequent to last year's round was likely to be through an initial public offering, but a flotation is seen as unlikely before next year.

Funding Circle, Ratesetter's larger British rival, is finalising plans to go public in London this autumn in a deal valuing it at up to £2bn.

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Ratesetter declined to comment‎ on its fundraising, which is being overseen by Lazard and Peel Hunt, the investment banks.

Ratesetter is now chaired by Paul Manduca, the City grandee who also chairs Prudential, the FTSE-100 insurer.

Original Article

Business

October 26, 2018