British SME lending platform Funding Circle has agreed to sell its loss-making US business to iBusiness Funding (IBF) for £33m.
IBF, which provides lending solutions for banks and lenders, is acquiring Funding Circle’s US business for a total cash consideration of £33m.
This figure takes into account Funding Circle US’s losses of £23m in 2023, a statutory profit before tax of £7m, and gross assets of £89m.
The transaction is expected to close by the end of June.
London-listed Funding Circle announced in March this year that it would exit the US market to focus on the UK.
“Alongside the UK restructuring actions announced in May, we are continuing to execute against this plan with the sale of the US business to IBF,” said Lisa Jacobs, CEO of Funding Circle.
Jacobs added that the UK business is “on track” to be profitable in the second half of 2024.
IBF is a subsidiary of the New York Stock Exchange-listed Ready Capital Corporation.
Justin Levy, IBF CEO, said: “We are delighted for Funding Circle US to become part of IBF. Over the last 10 years, Funding Circle US has made a significant contribution to supporting US small businesses and together we will be able to accelerate progress to help even more businesses. We look forward to welcoming the team and continuing the important work of providing highly flexible and efficient funding solutions to US small businesses.”
Funding Circle listed on the London Stock Exchange in 2018 with a valuation of £1.5bn.
Globally, the fintech has provided £16bn in credit to around 150,000 businesses.