Crowdfunding platform Fellow Finance aims for rapid growth after IPO

HELSINKI, Oct 9 (Reuters) - Finnish crowdfunding platform Fellow Finance is targeting fast international growth after a successful initial public offering (IPO) in Helsinki, its chief executive said.

Founded in 2013, the company was valued at 55 million euros ($63 million) 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 last month.

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 its revenue comes from borrowers’ fees. Last year sales grew 55 percent to 8.7 million euros with an operating profit of 2.5 million euros.

This year, revenue is seen to be more than 12 million euros and operating profit to stand between 3.1 and 3.6 million euros.

“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 told Reuters.

“The low-rate environment is bringing investors to us, while borrowers are interested in our ability to arrange loans quickly and easily.”

With more than 300 million euros 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 United States 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) for a couple of years now and the same is likely to happen in continental Europe in future,” he said, referring to EU plans for harmonising the legislation.

Fellow Finance raised about 10 million euros of gross proceeds from the IPO while owners such as asset manager Taaleri also sold some shares.

“Fellow Finance’s investment profile is a thoroughbred growth company ... The platform has proved is scalability in Finland and is already very profitable,” Inderes Equity Research said in a report. ($1 = 0.8714 euros) (Reporting by Jussi Rosendahl Editing by David Goodman)