Upward, marginal


  • Market consolidation across product lines
  • Foreign inbound M&A (particularly from US buyers)
  • Trade consolidators scooping up competitors


  • Expanding universe of potential investors:
    • Trade consolidators—seeking scale (e.g., Factris's acquisition of Debifo), vertical integration (e.g., Paylate's acquisition of AmmoPay) and opportunities to conquer their own niches (e.g., Morses Club's acquisition of Hays Credit)
    • Banks—lower cost of capital associated with specialty finance businesses
    • Foreign investors—expanding into new geographies and tapping into new customers (e.g., Brightlane Corp.'s acquisition of VATBRIDGE)
    • Financial sponsors—opportunity to capture an under-serviced market
    • Investment managers—attractiveness of captive platforms (e.g., Downing's acquisition of Funding Empire)
  • Pressure from rising default rates encouraging market players to pullulate organically or acquire superior credit assessment technology


  • Differing regulatory prerogatives:
    • Consumers—safeguarding over market freedom (e.g., UK FCA's imposition of financial limits for UK investors' investment in P2P platforms)
    • SMEs—market freedom over safeguarding (e.g., UK Government's rejection of Treasury Select Committee's proposal to regulate SME wholesale lending market)


Specialty finance providers are likely to continue to attract buyer interest, particularly from trade consolidators, financial sponsors and US buyers.

Other financial services—Publicly reported deals & situations

Market consolidation

47 specialty finance M&A deals announced in H2 2018*

  • Bank Frick: Acquisition of majority equity holding of Tradico (June 2019)
  • Brightlane Corp.: Acquisition of VATBRIDGE (April 2019)
  • Downing: Acquisition of Funding Empire (March 2019)
  • Morses Club: Acquisition of Hays Credit (February 2019)
  • Duke Royalty: Acquisition of Capital Step (February 2019)
  • Praetura Asset Finance: Acquisition of Kingsway Asset Finance (January 2019)
  • Factris: Acquisition of Debifo (January 2019)
  • Barclays: Minority equity investment in MarketInvoice (January 2019)

New entrants

  • Propio: Successful £375,000 equity crowdfunding raise (April 2019)

Growing pressure on P2Ps

  • Funding Circle: 55% revenue increase in FY2018, amidst 3.00%–3.8% expected loan default rate (January 2019)

Government/ Regulatory approach


  • UK FCA: Imposition of financial limits for UK investors' investment in P2P platforms, with effect from December 2019 (June 2019)


  • UK Government: Rejection of Treasury Select Committee's proposal to regulate SME wholesale lending market (January 2019)