Key facts
- Funding Circle CEO Lisa Jacobs announced her upcoming departure.
- The fintech's stock fell 10% at the open following the announcement.
- Jacobs took over as CEO in January 2022, a period when the company's stock was down 75% from its IPO.
- Under her leadership, the company's shares have since risen over 500%.
- Funding Circle recently upgraded its profit forecast and reported a 50% revenue increase.
- Investec raised its price target for Funding Circle to 280p, citing a valuation discount to peers.
Funding Circle shares experienced a significant drop of 10% at the open and closed down 8.7% at 210p following the announcement that CEO Lisa Jacobs plans to step down in late 2027. Analysts from Investec and Cavendish noted the surprise timing of her departure, which comes after a period of significant turnaround for the fintech firm. Jacobs, who took the helm in January 2022, inherited a company whose stock had fallen 75% since its IPO. During her tenure, she implemented a 'Medium-Term Plan' to transform Funding Circle into a multi-product financial platform, including expanding its buy now, pay later offering and international presence. This strategy involved divesting the US business for £33 million and cutting 120 roles in the UK to achieve £15 million in annual cost savings. These efforts have led to a substantial recovery, with the company's shares skyrocketing over 500% in two-and-a-half years, though they still trail the original IPO price of 440p. Despite the recent positive performance, including a 50% revenue increase and an upgraded profit forecast in a glowing half-year update, investors may be concerned about continuity following Jacobs' exit. Investec has raised its price target to 280p, highlighting a perceived valuation discount of 20-30% compared to peers, suggesting the market may be undervaluing the firm's improved revenue outlook.