Acquisition Opportunity

Hilco Streambank is seeking offers to acquire the business and intellectual property assets of the UK-based FinTech lending platform CODE Investing Limited (in Liquidation).

Joanne Rolls and Allister Manson, both of Opus Restructuring LLP, as Joint Liquidators of CODE Investing Limited (in Liquidation) (“CODE” or the “Company”) have appointed Hilco Streambank to actively seek interested parties with regards to the Company’s intellectual property assets.

The Company’s proprietary Platform provides a set of tools, modules and capabilities to connect more efficiently and cost-effectively SMEs seeking finance with institutional lenders. The Company has invested c. £13m in debt and equity to date to fund the development of the CODE Platform and to build out its business. The institutional Marketplace underpinned by the Platform has originated a portfolio of more than £127m in debt and equity in the UK.

Revenue generating and with strong links into institutional lenders, the business and intellectual property assets of the Company present a unique opportunity for parties looking to enter or expand into the sector.

Background

The traditional SME finance process is dysfunctional, lengthy, and inefficient, contributing to an estimated the SME funding gap of £59 billion in the UK, £630 billion in Europe, and £6.2 trillion in developing economies.¹ For institutional lenders, the high cost of acquisition, low conversion rates, and inefficient processes present barriers that are estimated to contribute towards a £1 trillion gap in lost potential institutional lending.²

Founded in 2013, CODE's mission was to fix the broken SME finance experience by delivering greater funding certainty and speed to SMEs, serving institutions looking for yield, and bringing them together more efficiently through the effective use of data, technology, and toolsets.

CODE's platform enables two solutions to address the dysfunction of the traditional borrowing process:

• Marketplace: A “one-stop-shop” for SME finance, providing institutions with cost-effective, direct lending access to qualified SMEs and offering SME borrowers a more streamlined, transparent experience. The Company has relationships with over 60 institutional lenders along with formal strategic partnerships with a large European asset manager, a listed parent company of SME service providers, and a UK-based bank specialising in equipment and vehicle financing.


• Platform-as-as-Service (“PaaS”): For organisations that lack existing infrastructure, the CODE Platform can be easily configured to customer requirements to deliver an end-to-end lending capability without costly investment. To support its PaaS business, the Company entered into a global distribution partnership with a £4 billion IT services and business process outsourcing firm; it has been selected as a preferred partner by a PIF-backed company in KSA.

The Company has invested c. £13m in debt and equity financing to develop its business model and the CODE Platform, built in-house using practices and experience gained from financial institutions like HSBC and First Direct.

In the financial year ending 31 March 2019, the Company generated revenues of c. £115k, a gross profit of c. £108k. In 2018, the Company generated revenues of £181k and a gross profit of £164k.

Sale Process

All expressions of interest and bids are to be directed to Hilco Streambank in writing. A Bid Submission Form is available on request. Please contact Hilco Streambank to gain access to a virtual data room of further information on signing of a confidentiality agreement.

Key Terms & Conditions

The Joint Liquidators act as agents of the Company and without personal liability.

The bidder acknowledges that Hilco acts as an agent for the Joint Liquidators of the Company who offer for sale only what right, title and interest (if any) the Company possesses in the assets. Such sale will be without any warranties, expressed or implied. Neither Hilco nor the Joint Liquidators have verified the information provided, and bidders are deemed to have carried out their own due diligence.

VAT, if applicable, at 20% will be added to the price. A non-refundable deposit of 20% will be payable by the buyer within 48 hours of bid acceptance. Legal completion to occur within 5 business days of bid acceptance. Hilco Streambank's full Terms and Conditions apply. 

References

¹https://data.worldbank.org/region/european-union; https://voxeu.org/article/estimating-financing-gap-small-and-medium-sized-enterprises

²Calculation by Management based on http://www.synthesis-sif.lu/wp-content/uploads/2015/07/GlobalMarketplaceLending.pdf