Funding Circle's $2 billion London debut sets tone for big listings

By Dasha Afanasieva

LONDON (Reuters) - Funding Circle made a positive market debut on Friday, valuing the British peer-to-peer lending platform at 1.5 billion pounds ($2 billion) and testing investor appetite for large listings with London's biggest for several months.

Backed by Danish billionaire Anders Holch Povlsen and launched in 2010, Funding Circle is the first of Britain's new breed of peer-to-peer financial technology firms to launch an initial public offering (IPO).

The IPO, which valued Funding Circle at around 1.5 billion pounds and is expected to help to set the tone for a string of large listings in Europe, was priced at 440 pence per share. Based on its offering size and price, Funding Circle raised around 440 million pounds on the London Stock Exchange.

The pricing was at the bottom end of the 420-530 pence per share price range set originally by the company and its advisers, and the stock opened in London at 460 pence before falling back to trade at to 444 pence at 0719 GMT.

Funding Circle's online lending platform enables investors including banks, asset managers, insurers, government-backed entities and funds to lend to small and medium-sized businesses in Britain, the United State, Germany and the Netherlands.

The company said that in the six months to the end of June it had an adjusted loss before interest, tax, depreciation and amortisation of 16.3 million pounds on revenue of 63 million pounds, up from 13.2 million pounds the previous year.

Funding Circle's flotation is a boost to the London Stock Exchange, which has been looking to attract large technology firms for whom New York is often more enticing because of its track record of technology floats.

Cyber security firm Avast went public in May 2018 and Alfa Financial, which provides software for the asset finance industry, rose sharply in its May 2017 listing.

A banker working on Funding Circle's debut said the deal would set the tone for others:

"Once you get to three or four, it begins to be a track record and it opens a dialogue with investors."

($1 = 0.7655 pounds)

(Reporting by Dasha Afanasieva; Editing by David Goodman and Alexander Smith)