“As a business owner, you get used to running through brick walls and relishing the pain.” James Meekings, co-founder of Funding Circle, shares his experiences growing a successful small business loans platform with Smith & Williamson’s Hall of Fame.
Last month, Funding Circle became a publicly listed company, raising £300m and securing a valuation of £1.47bn. The move elevates it to a rarefied universe of UK technology ‘unicorns’, those start-ups worth more than $1bn.
It validates the vision of university friends Samir Desai, James Meekings and Andrew Mullinger who, in 2009, spotted that the departure of the banks from small business lending had left many enterprises struggling to access finance.
This was a problem not only for the companies themselves, but for society. Smaller companies have been a vital engine of job creation for the UK economy. A small shift on the part of the banks was potentially a real problem for society.
James left his full-time job as part of the FIFA World Cup bid team for England 2018 to set up Funding Circle. For him, the strong bond between the Funding Circle team has been vitally important from the start: “Funding Circle was founded on friendship and over the years we’ve stayed very close. As a team, it’s important that we’re able to have open discussions and challenge each other to get better, but know that we’ll always be friends at the end of the day,” James says.
“We also created a set of company values together that remain at the core of our culture. We want people to have fun, live the adventure and feel empowered about the work we’re doing to help small businesses go even further.”
Today, Funding Circle is the UK’s leading small business loans platform. “Small businesses were reliant on only a handful of high street banks for finance,” James explains, “but in the wake of the financial crisis they all pulled back from lending. We knew there was a better way to serve these companies.”
The founders designed the Funding Circle infrastructure whereby any investor, big or small, could lend to small businesses. Today, 56,000 businesses have accessed £5.6 billion from 85,000 investors across the UK, US and Europe through the platform. These businesses include music schools, cycling shops, accountancy firms and bridal boutiques.
Like all start-ups, the company has had its teething problems: “When we first launched, managing liquidity was a big challenge,” James says. “We started out with nine businesses on the platform and during the first month, our investors lent £50,000. Today, our investors are lending over £160 million a month to hundreds of businesses globally.
“Like every entrepreneur disrupting a system, doing something new is always a challenge – if it was easy, everyone would do it. As a business owner, you get used to running through brick walls and relishing the pain. In the end, it’s all about keeping a positive attitude and not letting the little things slow you down.”
Outside of work, James admits that while he never really switches off, his young family is grounding: “The thing about running a business is that it totally immerses you. Even at home, I can’t help but be focused on it. But when you’re doing something you love and feel passionate about, it’s really not work at all.
“No matter how busy I feel at work, finding time to spend with my family is so important. Teaching my two-year-old son things is a challenge filled with tears and tantrums, but overall I feel a huge sense of pride and happiness when I watch him grow a little bit more every day.”
The founders have no plans to ease up after the flotation. They will keep the vast majority of their shares and continue to believe there is significant expansion potential for the business. With an addressable market in the UK, US, Germany and the Netherlands of £470bn and £2.7bn of loans under management at Funding Circle today, there is still much to keep them busy.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.