Q4 2018 Update

17 January 2019

Funding Circle Holdings plc (“Funding Circle” or the “Company”), the leading small and medium enterprise (“SME”) loans platform in the UK, US, Germany and the Netherlands, today announces updates to its statistics pages for the three months ending 31 December 2018 (the “Quarter”) and selected highlights from the quarter.

The data by country included in this announcement is also available on the Company’s website at corporate.fundingcircle.com/investors/loan-performance-statistics.

Highlights

• Full year revenue growth of ~55% (excluding property) exceeding ~50% guidance stated at IPO

• Loans under Management (excluding property) of ~£3.1 billion as at 31 December 2018, up 55% compared to the same period last year and also exceeding IPO guidance

• Total originations of £2.3 billion in the year to 31 December 2018, up 40%; record originations (excluding property) of £683 million for Q4 2018 vs £522 million in Q4 2017, up 31%

• Revenue growth exceeded origination growth in H2 2018, due to policy changes for existing borrowers in the US which reduced overall originations, but had no impact on revenue

• On 28 November 2018, The British Business Bank, the UK government's economic development bank, announced a commitment of up to £150 million for lending to UK small businesses through Funding Circle

• On 7 December 2018, Waterfall Asset Management agreed to invest in £1 billion of loans originated through Funding Circle's UK platform over a two-year period

Samir Desai CBE, CEO and co-founder, said:

Funding Circle delivered a strong end to 2018 which resulted in exceeding our revenue and Loans under Management guidance for the year. We were pleased to announce a number of new institutional investor transactions in Q4, which is further validation of the attractive risk-adjusted returns generated on the Funding Circle platform. We enter 2019 with continuing confidence and remain focused on delivering our growth strategy set out at IPO.

Group performance
| | | Q4 2018 | Q4 2017 | % | 2018 | 2017 | % | | Loans under Management ( excluding property) | £m | 3,123 | 2,012 | 55% | N/A | N/A | N/A | | | £m | 683 | 522 | 31% | 2,286 | 1,631 | 40% |

Investor Returns

• Across all geographies, investor returns on a net basis are expected to deliver 5-8% in 2018 and 4-7% in 2016 and 2017

• Loans originated in H2 2018 for the UK are expected to return 5.5-6.5%. The expectation of lower performance for 2016/2017 remains as a result of the weaker consumer credit environment, which has impacted some loans in higher risk bands. In response, the Company adjusted its risk models in H2 2018 - the total amount of SME loans originated in H2 2018 represents almost the total originations for the UK in 2017

• Loans originated in H2 2018 for the US are expected to deliver 6.0-8.0%. US loan performance has steadily improved since 2015, driven by risk model improvements and changes to pricing strategy

• Loans originated in H2 2018 for Germany are expected to deliver 5.5-7.5% and loans originated in H2 2018 for the Netherlands are expected to deliver 6.5-8.5%. Like the US, loan performance in Germany and the Netherlands continues to improve year-on-year

Outlook

• The Board reconfirms guidance given at the IPO with targeted revenue growth in excess of 40% in the medium term

• More detailed guidance for the year ahead will be issued alongside full year results on Thursday 7 March

Our statistics – Q4 2018

The following information is reproduced from each country’s statistics pages, which can be found at corporate.fundingcircle.com/investors/loan-performance-statistics.

Loans under Management (million)
| | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | | Group (£) | 52 | 145 | 366 | 860 | 1,362 | 2,107 | 3,148 | | UK (£) | 52 | 144 | 332 | 653 | 1,027 | 1,584 | 2,208 | | US ($) | N/A | 54 | 261 | 354 | 577 | 939 | | DE (€) | N/A | 27 | 30 | 65 | 131 | | NL (€) | N/A | 16 | 40 | 95 |

Originations (million)
| | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | | Group (£) | 49 | 130 | 311 | 721 | 1,065 | 1,738 | 2,292 | | UK (£) | 49 | 129 | 279 | 531 | 823 | 1,264 | 1,531 | | US ($) | N/A | 334 | 281 | 514 | 792 | | DE (€) | N/A | 33 | 19 | 55 | 105 | | NL (€) | N/A | 21 | 34 | 81 |

Gross Yield
| | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | | Group (£) | 52 | 145 | 366 | 860 | 1,362 | 2,107 | 3,148 | | UK (£) | 52 | 144 | 332 | 653 | 1,027 | 1,584 | 2,208 | | US ($) | N/A | 54 | 261 | 354 | 577 | 939 | | DE (€) | N/A | 27 | 30 | 65 | 131 | | NL (€) | N/A | 16 | 40 | 95 |

Projected annualised return range (after fees and bad debt)
| | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | | UK | 9.2% | 8.4% | 9.9% | 9.6% | 9.6% | 9.7% | 9.8% | | US | N/A | 14.2% | 13.2% | 12.3% | 13.0% | | DE | N/A | 7.2% | 9.5% | 9.5% | 10.1% | | NL | N/A | 9.3% | 10.9% | 12.0% |

Projected bad debt rate range
| | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | | UK | 1.3-1.3% | 1.8-2.0% | 1.8-2.1% | 1.8-2.3% | 2.9-3.5% | 3.5-4.1% | 3.0-3.8% | | US | N/A | 10.5-10.7% | 7.5-8.3% | 4.6-6.2% | 4.6-6.4% | | DE | N/A | 4.7-5.6% | 4.4-6.2% | 1.7-3.6% | 1.7-3.7% | | NL | N/A | 2.8-4.0% | 2.2-4.2% | 2.2-4.2% |