LONDON — A UK peer-to-peer platform for the renewable energy sector backed by designer Vivienne Westwood is selling off its assets after regulation changes meant the company couldn’t make the model work.
Trillion Fund, founded in 2011, announced in a press release on Monday that it is selling off its core assets, including its white label-ready peer-to-peer funding platform, a crowdfunding platform, and FCA permissions to operate in the space.
Trillion Fund made peer-to-peer loans to the renewable energy sector and says it raised £5 million from 8,000 members over its lifetime. Celebrated British designer and climate change activist Dame Vivienne Westwood invested £1 million in the company in 2014. Westwood owns just over 27% of the company, according to recent filings.
Westwood told the Telegraph at the time of her investment: “There is no better way of saving the planet than investing in the companies and technologies that have the potential to drastically reduce carbon emissions.”
Trillion Fund CEO Theresa Burton blames the closure of Trillion Fund’s platform on the government’s removal of subsidies for renewable energy companies in 2015, saying it killed demand for loans. She said in an emailed statement that the company was “unable to secure sufficient deal flow to support its focus on renewable energy.”
The company last year tried to pivot to more general crowdfunding but Burton says it couldn’t drum up enough demand to support the business. Burton says in the emailed statement: “Although the concept was warmly received in initial market research, it was challenging to get to the deal flow volumes required to scale fast enough.”
As well as raising money from Westwood, Trillion Fund raised over £640,000 from investors on crowdfunding platform Seedrs in December 2014 at a valuation of £4.5 million. Burton told BI she expects a “detrimental impact” for shareholders as it is an “asset sale not an on-going business sale.” But she added that it is not a “fire sale.” Investors have already been told about the sale process.
Trillion Fund has been running a private sale process since October and Burton said the company decided to put out a press release to broaden the potential pool of interested parties. The company is pitching itself for sale to a lending business with an existing customer base that is looking to get into the peer-to-peer market. Burton said she is already in talks with “five or six” potentially interested parties.
Peer-to-peer allows investors — either individuals or companies — to lend directly to either companies or people looking to borrow money over online platforms. £8.7 billion has been lent over P2P platform in the UK since the concept was invented in 2005, according to AltFi data. However, the majority has been lent by major players such as Funding Circle, Zopa, and RateSetter.
Chirag Shah, founder and CEO of Nucleus Commercial Finance, told BI in December that he believes 2017 will be a crunch year for the peer-to-peer sector, saying “there is no room” for the number of platforms in the market.
Burton echoed this sentiment, saying: “There are a lot of small peer-to-peer platforms out there like ourselves who I think are going to struggle to get the deal flow needed.”
Burton told BI she believes peer-to-peer platforms must reach a loan book of at least £80 million to reach break-even. Trillion Fund only reached a loan book of £3 million, she says, which drove the decision to “call time.” The existing loan book will continue to be run down.
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