Funding Circle’s FlexiPay Exceeds Expectations

Take up of Funding Circle’s business-to-business buy-now-pay-later FlexiPay product has exceeded the platform’s expectations.

Funding Circle launched a beta trial of FlexiPay in August 2021, letting companies spread any UK invoice or supplier payment over three months, with the initial payment made upfront on their behalf.

The company’s annual report for 2021, uploaded to Companies House this week, shows high levels of engagement from around 850 customers.

The document shows £11.8m of credit limits have been approved through the product, with £7.6m originated.

The average FlexiPay payment was 20 per cent higher than expected and the average value of transactions is more than double initial expectation, Funding Circle said.

Funding Circle also said it would launch and trial a FlexiPay Card by the end of 2022.

It comes as the platform used its annual results announcement in April to reveal its exit from retail P2P lending.

Instead, it will focus on areas such as FlexiPay as well as embedded finance and its traditional business loan products.

Funding Circle reported a £64m operating profit for the year ending 31 December 2021, beating its own guidance

By the end of 2021, Funding Circle had more than £4.45bn in loans under management – a 5.8 per cent increase on 2020. Its operating income rose to £165.5m – up from £155.7m in 2020, driven by higher servicing needs. And the firm had net assets of £288m, which included £224m in cash. In 2020 net assets were £217.6m, with £103m in cash.

Cost management initiatives meant that the company’s operating expenses fell by 12 per cent last year.

However total investment income for 2021 was £41.4m – down from £66.3m the previous year. This was due to investments being monetised in line with strategy, Funding Circle said.

Total income was £206.9m last year, down from £222m the previous year as a result of anticipated lower investment income.

Loan originations were down by 16 per cent between 2021 and 2020, reflecting the end of the coronavirus business interruption loan scheme.