Episode Transcript
Neil: Hello, and welcome to this episode of Be Inspired from the London Stock Exchange. Today I'm sat in the heart of Fitzrovia at 8 Mortimer Street in LendInvest's office. LendInvest was founded in 2008 and successfully completed its IPO on AIM in August, 2021. This is a technology driven asset manager focused on property finance, which on one side of the platform connects some of the largest investors with this interesting asset class and on the other provides short-term funding and development loans to underserved borrowers such as landlords and property developers, and is quickly expanding into the buy to let market as well. The company's just passed 2 billion pounds of AUM and let's go and meet the guys and learn more about what they're up to. Rod and Christian, thanks very much for joining us today. How you both doing?
Christian: Yeah, thanks very much. It's great to be here.
Neil: Christian, tell us how you met your co-founder Ian, and how The LendInvest story started.
Christian: Yeah, sure. I actually didn't know Ian that well when we set up the business. I met through a mutual friend. And I guess the initial genesis of the idea was, as you mentioned, we set up in 2008. It was kind of an interesting time to be setting up a mortgage lending business. But the initial idea was we could see that interest rates were going to zero and there was huge volatility in the stock market. So there were investors that were kind of looking for something to do with their capital, looking to get a return. At the same time, there were borrowers that were looking for funding through the financial crisis, banks had pretty much stopped lending. So it was kind of, there were two parties that we could see we could match together. In some respects, the initial genesis of the ideas has remained to today. So we are sort of matching those two parties. But today we're very focused on technology and we're very institutional in terms of our funding base so large institutions funding us, and we're using technology to service our customers as we do.
Neil: And, and Christian, when did you meet Rod and decide to pass on the CEO bat? We meet so many founders who like to stay in control, but I guess it's slightly different for you. Tell us a little bit about that.
Christian: Sure. So I think it was about late 2019. Ian Rod and I were sort of having serious discussions around it, but Rod's been in the business for a long time. And so I think in many respects was kind of a key part of us growing the business and, you know, part of the core team. So I think we felt really lucky that there was kind of a natural successor to pass the bat onto. I could see that there were some people that could do the job better than me. So, uh, I was very happy to hand it on and, you know, that was 2019, it wasthe start of 2020 when, Rod sort of came on board as CEO and right as we went into Covid. So he kind of got the ultimate baptism of fire in that role and the businesses continued to perform exceptionally well and be really successful.It's been, it's been a good passover, I would say of that role.
Neil: And Rod, what's your background and what's it been like working with Christian and Ian so heavily involved in the business?
Rod: I've actually been in LendInvest for over seven years so LendInvest has been a big part of my career. I joined LendInvest to lead the capital markets and fund management sides of the business. And then as Christian said, took over as CEO just over two years ago. LendInvest has been a core part of my career. It's been fantastic working really closely with these guys. I joined the business when it was just 30 people, so when you're in a small company, you sort of all muck in and do everything together. So it's been a great experience.
Neil: And what a fantastic story. You started in 2008, you're profitable by 2015, you hit a billion pounds of AUM by 2019, you decide to list in August 2021 and a successful IPO in that, what drove you to list at that juncture?
Christian: Yeah, it is interesting. I mean, I guess we've always aspired to be a listed business. I guess for Ian and I as entrepreneurs, we kind of saw it as the holy grail of, of the journey sort of, to take a business to listing. And for us specifically, we thought it's just a really good way for us to continue to raise our profile as a business, to institutionalize the business and for us to drive down our cost of capital. So there was sort of real commercial reasons to be a listed business.
Rod: I think in 2020 we just saw an opportunity to do it. The business had done really well through the Covid period and we had this sort of tech roadmap that we wanted to deliver and we could see the opportunity to raise capital and we could accelerate the delivery of that tech roadmap. So a lot of things came together that made 2021 the right time to do it.
Neil: I love this case study because you weren't a unicorn when you listed and you've been hugely successful. What advice would you give to other founders looking at an IPO right now? Tell us about the process. The good, the bad, the ugly. Don't hold back guys.
Christian: I think yeah, you don't have to be a unicorn. In terms of the good around the process for us, we were able to do it quite quickly. So we literally, you know, had, it was from a board decision, sort of the start of April where we said, yeah, let's go and explore an IPO, just sort of mid-July being a listed company. So in three and a half months we were able to do it. I think if you really focus on it, you can do it in a very condensed way. It's a hugely exhausting and distracting process, but it doesn't have to go on for a huge period of time. So I think for us, that that was a real positive, wasn't it?
Rod: Yeah. In terms of the bad and the ugly, the most challenging thing is the uncertainty all the way through that period. You don't know you're going to get it done until you get it done. And clearly a huge amount of focus and effort goes into the process, and for that uncertainty to be sitting around it right until the end is really stressful and a challenge. But as Christian mentioned, the way that we controlled that was by condensing the timescale as short as possible to be in that period of uncertainty for as little period as possible.
Neil: And the LendInvest brand was known when you listed but you raised 40 million pounds. What has it meant for a high growth FinTech like yours? What has the IPO enabled you to do?
Rod: So we raised that capital to accelerate our tech and product strategy, and for us that means hiring more people. Hiring more software engineers to be able to build technology faster. And we've been able to increase the size of the technology team by about 30% since, since listing so that's been sort of a core focus. The other key thing we've done is brought some really key experience people into the business, I suppose using the profile from the IPO to be able to attract some really top talent. So that's been really great too.
Neil: What can we expect from you guys over the next few months and years?
Rod: So the big focus for us now is, is a move into homeowner mortgages and, um, that's where, uh, we're focusing our tech development efforts and, um, also bringing people into the business to, to launch into that product. And we're gonna f focus initially on, um, serving customers whose income it's harder to verify. So that could be contract workers or self-employed people. Um, and, um, we'll use a lot of the technology that built to target the Bette space and use that in the, in the homeowner mortgage space too.
Neil: Rod, you're really just scratching the surface today, right? Can you see a time where I can go onto the LendInvest app on my phone, have it check my pay slip and account, and basically offer me a remortgage from a lender I haven't heard of, but it's been accredited by you guys and enables me to process that mortgage and hopefully minutes, do you think that's on the roadmap?
Rod: I think you don't even need the pay slip there with open banking. You can avoid that step too. So absolutely. A mortgage at a touch of a button is, it is something that I think we aspire to and would be what the industry needs.
Neil: Talking of open banking. Christian, you are probably one of the busiest guys I know. What else have you got going on beyond LendInvest?
Christian: LendInvest is my baby, so I'm still really involved in the business. I'm involved in a couple of other businesses now, which I'm quite excited about. Also, this FinTech founders group, which I know the London Stock Exchange has been been great in supporting us with that group. I'm trying to help give a voice to founders in the sector, entrepreneurs and lobby the government for changes and hopefully can continue to see the UK as sort of a leading place for FinTech globally.
Neil: And gentlemen, as a parting thought, what's a one piece of advice that you'd give other CEOs, CFOs, founders, board members thinking about a listing in the UK?
Christian: For me, I think, as as a high growth business, when you are on that trajectory to an IPO, it's important to think about growth, but also I think you've gotta bear in mind that at some stage it will be about profits when you sort of make that transition to being a public company. And it may not be necessarily day one, you have to be profitable, but I think you have to have visibility on that, and I think you need to be quite conscious of that in your journey as you make that transition to being a public company.
Rod: And, and for me, it's not to get too distracted, stay focused on delivering that strategy and delivering the mission.
Neil: Super. Guys, what do you like to do for fun when you're not working
Christian: Wow, we were just talking before. I do my Peloton. I've sort of got a young family. I mean, I kind of, yeah, if that's fun then yeah.
Rod: Yeah, I'm not on the Peloton anywhere near enough. And look, I love skiing, that's been been something that I've been able to do this year. So that's, that's a passion of mine.
Neil: Well, thanks very much Rod and Christian for sharing your time with us today. I really appreciate it, and it's great to get this story out into the open. Thanks,
Christian: Thanks Neil. Thanks very much.
Neil: Thanks for joining us today. You can find more videos and podcasts just like this at www.london stock exchange.com.
