Folk2Folk, which recently announced plans to expand nationally, looks to place shares in the value of 3.5M GBP. The offer consists of 1.5M GBP in new shares and 2M GBP in shares offered by the founders. Minimum required investment amount is 20,000 GBP. The offer is restriced to certified or self-certified high net worth or sophisticated investors.

Full announcement text:

Folk2Folk, a P2P lender to rural businesses, has engaged Asset Match to handle a secondary placing of 7,600 founder shares and a primary fundraise of £1,500,000. The two transactions together will total approximately £3,500,000. EIS relief will be available on the offering of new shares.

• The total amount being offered is £3,500,000 of combined founder and new shares
• Investors will receive a split of approximately 57% founder shares and 43% new shares (however, should demand allow, investors may receive a higher proportion of new shares to founder shares)
• EIS relief will be available on the portion of the offering represented by new shares
• The offer price is £263 per share
• Pre-money valuation is c. £16,000,000 which is the post-money valuation from when the company raised £1,000,000 last year
• The founders have committed not to sell further shares for a period of at least one year after completion of this placing and will still own more than 50% of the enlarged share capital.
• Folk2Folk has committed to making its shares tradeable on Asset Match’s secondary market in the future (most likely after 12 months)
• Folk2Folk had arranged loans of over £83,000,000 at the end of January 2016, an increase of 175% over the previous 12 months
• Folk2Folk is re-setting the values around lending, and focusses on fairness, ease and a sense of community
• New bespoke technology platform which has been developed over the last 9 months is due to be installed by the end of the first quarter bringing the opportunity to scale and increase productivity

All necessary documents – the Articles of Association, Business Summary, Bios and Application Form – are available on our platform. To access the page, first register (if you have not already) and then request access to the BookBuild page by emailing Asset Match.

Background:

Folk2Folk was founded in 2012 by Mark Parnall and Louis Mathers and was born out of the local law firm, Parnalls in Launceston. Parnalls had for many years run a building society agency business for Bradford and Bingley (later Santander), together with a separate private mortgage business and Folk2Folk is the successor to these businesses. Since March 2015, Folk2Folk has been headed by Jane Dumeresque, a qualified chartered accountant and an experienced financial services professional with executive and non-executive director experience.

In September 2015 the company completed a £1,000,000 EIS fundraise at a pre-money valuation of £15,000,000 and since then, as indicated above, the company’s loan book has continued to grow rapidly.

Other key points:

• Folk2Folk is purely an arranger; it does not take risk onto its balance sheet
• They charge a 2% arrangement fee and 1% per annum service fee on arranged loans
• They are a unique hybrid of a FinTech P2P platform and a regional high street presence
• Recently launched a panel of local law firms to facilitate growth into other rural regions of the UK
• No presence, and no plans to develop, a city centre business
• An attractive branding suited to expanding overseas

Investment:

This opportunity is only available to certified or self-certified high net worth or sophisticated investors. The minimum investment is £20,000.

The Folk2Folk offering has gone live on Asset Match this morning and you can follow the subscription process via our BookBuild page for Folk2Folk once you have been given access.

We will be holding an Investor Presentation with the senior management of Folk2Folk at the Institute of Chartered Accountants Hall, Moorgate Place on Tuesday 1st March at 17:30. Please visit the following link to reserve a place – Investor Presentation.