There’s a lot going on in our sector just now, with a rush of FinTech companies on both sides of the Atlantic seeking IPOs.
FaizPay, a company offering a truly multi-channel fast and fair payments service that’s built on Open Banking rails, has secured 87% or £526,958 of its fundraising target of £600,001 from 79 investors (at the time of writing) via a securities offering on Seedrs. As of July 4, 2021, there are 34 days left in the company’s sale.
With business offices in London, FaizPay focuses on the Finance & Payments sectors (Digital Mixed B2B/B2C). Incorporated in December 2019, the company reports a £4.5M pre-money valuation, and it’s offering 11.75% equity along with EIS and tax relief.
Here are the main business highlights shared by the company:
The queue of fintechs hoping to reach the public market in the coming weeks and months is… extensive.
Quite a busy time for the army of investment bankers, lawyers and management teams who’ll be shepherding this herd of fintechs.
Their excitement is understandable.
After years of ‘challenging’ market conditions, investors on both sides of the Atlantic have demonstrated their appetite for higher-risk, even lossmaking fintechs.
The warm reception of PensionBee in London and Marqeta in New York, both of which are bobbing at or around their offer price, is certainly a reassuring sign.
Then there’s the stellar performance of listed fintech investors like Chrysalis Investments (up over 105 per cent YoY), Augmentum Fintech (up nearly 30 per cent YoY) and Draper Esprit (up over 100 per cent YoY).
Contrast that with the last time LendInvest considered listing in 2019, no-deal Brexit fears gripped the market while industry peer Funding Circle had seen its shares sink 74 per cent since its IPO the previous year.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.