Crowdfunding firm aims for rapid global growth

Helsinki - Finnish crowdfunding platform Fellow Finance is targeting fast international growth after a successful initial public offering (IPO) in Helsinki, its CEO says.

Founded back in 2013, the company was valued at €55m by the IPO, which closed on Tuesday and was more than two times oversubscribed.

The stock is due to start trading on Wednesday. Fellow Finance is among the first European peer-to-peer financial technology companies to be listed, following Funding Circle’s London IPO in September.

The Finnish company’s digital platform brokers peer-to-peer loans by private individuals and businesses. It currently operates in Finland, Sweden, Germany and Poland.

Unlike many of its competitors, Fellow Finance’s digital lending platform allows investors to invest in both consumer and company loans.

A large part of the company’s revenue comes from borrowers’ fees. In 2017 sales grew 55% to €8.7m with an operating profit of €2.5m.

In 2018, revenue is seen to be more than €12m and operating profit to stand between €3.1m and €3.6m.

"We have grown remarkably in recent years and we see that growth continuing, both in existing markets as well as in new regions [in the EU]," CEO Jouni Hintikka said.

"The low-rate environment is bringing investors to us, while borrowers are interested in our ability to arrange loans quickly," he said.

With more than €300m of brokered loans so far, Hintikka said Fellow Finance is the largest crowdfunding platform in Northern Europe. Rivals in the region include Sweden’s Lendify and Germany’s Auxmoney.

Continental Europe has lagged behind Britain, the US and China in crowdfunding and alternative finance because of its large number of small countries with different legislation and languages, Hintikka said.

"Finnish crowdfunding law has boosted the market here and the same is likely to happen in continental Europe," he said. Reuters