Some say that all this market madness in funding for startups came to a brutal halt in the implosion of WeWork.
The latest business that has decided to retreat back into core markets is Funding Circle. In its financial statements for 2019 the fintech notes the growth of its US and UK operations and the “reorganization” of the German and Dutch units.
“In the US, our lending to small businesses would place us inside the top 50 largest US banks. In Europe, we are reorganising our German and Dutch businesses towards a new model that is better suited to those markets and will help accelerate our path to group profitability” the statement read.
According to Finextra, that entails the layoffs of 125 staff members in mainland Europe. Funding Circle may perhaps be one of the first fintechs to fall foul of ‘the great decoupling’, that was started by trade wars and Brexit, and exacerbated by COVID-19.
This follows recent news of N26 leaving the UK banking market
Funding Circle is planning to reduce its operations outside of the UK amid 2019 losses https://t.co/aF8Y4DJm9n
— Business Insider (@businessinsider) March 16, 2020
Since Funding Circle’s IPO, the share price has dropped roughly ~90%, but the news of layoffs have some concerned that the peer-to-peer business is treading water.
At the peak of its public trading (not long after IPO in 2018) the company was worth £1.5 Billion. Now just a fraction, we hope that Funding Circle’s retrenchment into the UK and US will be enough for it to survive a turbulent economic time.
Amid all today’s market madness, shares in Funding Circle, the former unicorn, down almost 21pc to a fresh low of 48p. It floated at 440p. 90pc collapse, and can’t be trading much more than its cash reserves.
— James Hurley (@jameshurley) March 9, 2020