The London fintech cutting in the UK and expanding in the US
Times have been tough for loans fintech Funding Circle since launching an IPO in 2018. The ex-fintech unicorn's stock price is now less than a tenth of what it was when it went public, and Funding Circle has been cutting costs in its core team to compensate.
In its 2023 half year report today, Funding Circle announced it has been making cuts to its UK loans business, with costs falling £4.8m, or 8%, from H2 2022 to H1 2023. This may have something to do with the fact that Funding Circle also says "headcount across [the] UK Loans business has reduced by 8%."
Some big names have left, although it's not clear whether they were part of the UK layoffs. Global head of enterprise risk Rosaline Laverly left in February to become chief risk officer and managing director of Standard Chartered. Head of data risk Michael Doris, who previously spent 14 years at HSBC, left for a subject-matter expert role at NatWest in March.
Cuts to the UK loans business look curious. Although Funding Circle as a whole made a £16.6m loss in the first half, the UK loans business was (just about) profitable, making funding circle £1.4m, albeit after a £2.7m loss in the second half of last year.
Despite the first half loss, headcount at Funding Circle appears in the process of levelling out. The current figure, 1065, is far from a 2019 peak of 1227 employees but well above 2021's 915 employees. However, Funding circle's employees were up 6% in the first half of '23 versus the same period of '22.
So where are all these new employees going? Perhaps the US. Spending on Funding Circle's US loans business grew 44% compared to H1 2022, bolstered by a "non-recurring impairment of San Francisco office space" totaling an eye-watering £3.8m. It also announced the opening of its Denver, Colorado office, where it intends to hire "around 290 employees".
It's also been investing heavily in its product offerings, more than doubling spending on its FlexiPay team. There may also be a US focus here too, as the fintech's chief product officer, ex-Betfair CEO David Yu, is based in California.
At the moment, however, job listings in the UK far exceed those in the US. There are 35 open roles in the UK and just nine in the US.
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