MarketFinance swings into profit as revenues rise 137pc

MarketFinance reported a pre-tax profit of £240,000 in 2021 compared with a loss of £9m the previous year.

Revenue at the alternative business lender increased by 137 per cent to £24.5m, driven by strong growth in both the invoice finance and loan products, according to documents filed with Companies House. Over the year, MarketFinance lent £91m in term loans and £391m in invoice finance.

Meanwhile cost of sales were up 93 per cent to £14.3m, resulting in a 248 per cent increase in gross margin.

Operating costs rose just 12 per cent even though the business saw a higher volume of customers. It said that its previous investments in team, technology and processes allowed it to support its new customers without materially increasing the cost base. During the period the average monthly number of employees rose from 124 to 130.

Read more: MarketFinance co-founder steps down as director

“We continue to believe the Covid pandemic has accelerated a pre-existing trend of businesses seeking payments and credit away from traditional providers and towards fintechs like MarketFinance,” said chief executive and co-founder Anil Stocker. “We gained a number of new customers who highly value the speed and ease of dealing of MarketFinance.”

The remuneration of directors fell year-on-year to £165,560 from £253,160, with the highest paid director taking home £135,000.

Read more: MarketFinance raises £100m in debt financing from Deutsche Bank

“We believe in a decentralised future for finance distribution to small businesses, and a continuation of the trend that is seeing small- and medium-sized enterprise credit products move away from the incumbent banks,” added Stocker.

“As such we are doubling down on our investment in embedded finance. In the future, any business-to-business ecommerce platform will be able to embed customer authentication, payment methods and credit on demand at the point of sale using MarketFinance’s technology and API connectivity. This will enable business suppliers to work with more small business buyers, drive more loyalty and larger basket sizes, as well as accelerate cash flow and offer their customers longer to pay.”

Read more: Embedded finance market to reach $7trn by 2026