UK P2P lenders unlikely to embark on public listings

Peer-to-peer lenders are likely to hold off on stock market flotations in the near future

UK peer-to-peer lenders are unlikely to embark on stock market flotations in the near future, industry analysts claim.

Funding Circle is the only P2P lender to have gone public, having listed in October 2018, and despite platforms such as RateSetter, Zopa and Assetz Capital all expressing intentions to list, no concrete plans have materialised.

Assetz Capital said in June that an initial public offering (IPO) continues to be evaluated as a “future step” while Zopa is rumoured to be considering a public listing but has declined to comment on plans.

RateSetter had long expressed its ambitions to float but this year’s acquisition by Metro Bank makes an IPO highly unlikely.

It is unlikely that we will see any P2P lender forge ahead with IPO plans in the near to medium-term, said John Cronin, analyst at brokerage Goodbody. The appetite among public equity market investors is likely to be heavily suppressed given the challenges faced by the sector.

Nic Conner, research consultant for business finance experts Rangewell, suggested that a cautious approach could be a good thing as it means a P2P lender will be able to show that it can survive the current economic cycle.

With the FTSE 100 at its lowest valuation since 1988, a slower route to listing is not a bad thing for the platforms either, he said. I’m sure we will see more platforms hitting the open markets one day, but it won’t be any time soon, or with the mega valuations of the past. That said, future investors will be reassured the valuation of a newly listed P2P lender is based on a proven business model, after being tested by one of the largest economic downturns in history.