funding circle - noah17 london
TRANSCRIPT
Using technology and data to revolutionise the customer experience
Samir Desai, Funding Circle
Three Conferences, One Mission: Empower the European Digital Ecosystem
To provide a physical marketplace that facilitates funding of
digital European companies at all stages
Mission Mission Mission
Connecting Capital with
Entrepreneurs
Connecting European Champions
and Challengers
Connecting Israel’s Startups with Large Corporates
and Investors
30-31 October 2018Old Billingsgate, London
6-7 June 2018Tempodrom, Berlin
13-14 March 2018Haoman 17, Tel Aviv
To promote Israel - Europeanrelationships and enable funding
To bring together future-shaping executives and investors active
across segments driven by digital revolution
Funding Circle is the leading global lending platform for small businesses
21. See “Key Milestones” (slide 15) for a more detailed overview of corporate capital raised2. Source: Funding Circle, includes UK, US and CE originations - USD:GBP FX rate of 1:0.82 and EUR:GBP FX rate of 1:0.853. Source: Funding Circle; As at September 2017
Deep and diverse institutional lending base $5bn+ Lent to >37,000 businesses2
$330m equity capital raised1
2010 2013 2015 2015
Strong and experienced leadership
Eric Daniels, DirectorFormer CEO Lloyds
Bob Steel, DirectorFormer Vice-Chairman
Goldman Sachs
Andrew Learoyd, ChairmanFormer COO Equities
Goldman Sachs
Samir Desai CBECEO and Co-Founder
David Yu, CPOFormer CEO Betfair
Jerome Le Luel, CROFormer CRO Barclaycard
~800 staff3
SME income Fund
Traditional banks are turning away from small businesses globally
3
1. Source: Financial Times (https://www.ft.com/content/3a1c5cbc-f088-11e3-8f3d-00144feabdc0)2. Source: https://ec.europa.eu/commission/sites/beta-political/files/juncker-political-guidelines-speech_en_0.pdf3. Source: Business Insider (http://uk.businessinsider.com/funding-circle-raises-100-million-accel-chancellor-philip-hammond-fintech-2017-1)
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UK: Cumulative net lending1 to UK small
businesses2
UK Banks
(2,568)
1,242
US: Credit gap for small businesses persists
Europe: Volumes have dropped in last 10 years
Platforms are much more efficient intermediaries
4
25% of our UK borrowers have taken more than one loan94% of our borrowers would come back us first in the future
Funding Circle does not hold inventory so generates >330x better return on capital vs. banks
At scale, lending platforms have high margins and low capital requirements
Return on required capital – Projected Funding Circle vs. large UK bank
Assumptions: Originations conservatively match average loans serviced by marketplace (in practice this is normally lower); scale assumed to be ~£10bn per annumSource: FCA Capital Requirements for Debt Based Crowdfunders under IPRU (INV) 12.2.2 R - IPRU (INV) 12.2.7 R. Loans funded band 0.2% for £50m; 0.15% for £200m; 0.10% for £250m; 0.05% above £500mLBG 2015 Annual Report Excel File
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• Income margin: ~5.0%
• EBITDA margin: 50%+
• Required capital: ~0.05%
• Return on required capital: ~5000%
~5,000%
~15%
>330x
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Leading edge analytics enables us to offer the right loan to the right borrower at the right time
Risk
Re
sp
on
se
H M L
Target Underwrite Top Up Collect Recover
Borrower Credit Lifecycle with Funding Circle
H
M
L
Marketing TargetingThrough Machine Learning
Pricing OptimisationWith Dynamic Stress-Testing
Multi-DimensionalCredit Risk Scoring
RiskGrade
Pre-SelectedTop-Up Loan Offers
Contact Strategy OptimisationThrough Machine Learning
G1
G2
G3
G4
Loan lifetime projection
Default scenarios
time
Multi-Channel MarketingSpend Optimisation
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Sophisticated web and mobile interfaces for optimal user experience
Loans funded in as little as 30 minutes
Global engineering and product
team of ~200
Instant and personalised
quote
Virtuous funding circle drives continual improvement
8~45,000 pieces of data are analysed per application
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Simple, straightforward product with industry-leading returns
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Customers want to interact and be served by brands that are not a bank
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Our vision: We aim to originate $100 billion and create three million new jobs a year
Low cost and capital light Better customer experience GlobalCutting edge tech & data
analytics
12
37,000 businesses and counting…
THANK YOU
Selected Completed NOAH Transactions
Focus on Leading European Internet companies
Covering over 400 companies across 25 online verticals, a broad range of over 500 investors as well as 100+ online-focused corporates
Deep understanding of industry dynamics
Ability to add value beyond banking advice
Facilitates overall process and minimizes management distraction
NOAH Advisors is globally well connected and has direct access to virtually all key players in the industry
Knowledge of and strong relationships with potential buyers’ key decision makers
Proactively finds and unlocks attractive investment opportunities for leading investors
Annual NOAH Conference in its 8th year
Over 40 years of combined relevant M&A experience
Routine execution of M&A and financing transactions with sizes of several billion euros
30 successfully completed NOAH Advisors transactions underline successful transfer of M&A competencies to the Internet sector
Entrepreneurial mind-set, focused on growing the business and establishing a reputation for excellence
Ability to deliver top results in short time frames
Highly success-based compensation structures align interests of clients and NOAH Advisors, and demonstrate conviction to deliver top results
Creative deal solutions
December 2014
September 2014
October 2014
May 2014
Sale of 100% of
for $800m to
Exclusive Financial Advisor to Fotolia and the Selling Shareholders
Sale of 100% of
for €80m to
Exclusive Financial Advisor to Trovit and its Shareholders
Sale of controlling stake in
to
Exclusive Financial Advisor to Facile.it and its Shareholders
sold 100% of
for $228m to a joint venture between
Exclusive Financial Advisor to Yad2 and its Shareholders
Unique Industry Know-How
Unmatched Network and Relationships
Strong Investment Banking Competence
Full Commitment - We Are Entrepreneurs!
EUROPE’S LEADING INTERNET CORPORATE FINANCE BOUTIQUE
September 2016October 2016
December 2016
Financial Advisor to Oakley Capital
®
Marco RodzynekManaging Director & Founder
Jan BrandesManaging Director
Justus LumpeManaging Director
The NOAH Advisors Core Banking Team
Nikhil ParmarDirector
Acquisition of a Majority Stake in
by
from
at a valuation of €300m
Investment in
Exclusive Financial Advisor to KäuferPortal and its Shareholders
by
84% Ownership
Financial Advisor to Silver Lake
Investment in
by
August 2017
Financial Advisor to EMK Capital
Acquisition of a Majority Stake in
by
at a valuation of $200m