Three friends who met at university are in line for a combined windfall of £70m after revealing plans for a £2bn float of Funding Circle, the British peer-to-peer lending business they founded eight years ago.

Funding Circle, which allows small firms to tap into a pool of money provided by thousands of investors, aims to raise £300m in a stock market float valuing the company at up to £1.95bn.

The firm has already secured backing from Heartland, the investment vehicle of the Danish multibillionaire Anders Holch Povlsen, who is the largest shareholder in the online retailer Asos. Povlsen, also one of the UK’s largest landowners thanks to successive purchases of sprawling Scottish estates, has pledged to take a 10% stake.

The chief executive, Samir Desai, said he and his two co-founders, who met at Oxford University, were inspired by tough lending conditions amid the credit crunch. “In 2008 we were seeing small businesses struggling to get access to finance,” said Desai, whose 7.6% stake is worth up to £125m. “It’s a small part of what banks do, but actually quite a big thing for society. We wanted to bring together disaffected parties and get a better deal for all.”

Funding Circle offers loans of up to £1m to firms that want to raise capital quickly or have been turned down by a bank. Its model, which relies on sophisticated data analytics, has resulted in the issuance of £5bn of loans since 2010 by matching 50,000 businesses directly with 80,000 investors.

Desai and his co-founders, James Meekings and Andrew Mullinger, all aged 35, own 17% of the company between them, a stake worth up to £280m based on the upper end of the float target. However, they do not intend to sell all their shares in the flotation and will instead share a windfall representing a quarter of the wealth crystallised by the float.

Funding Circle staff, all of whom have a stake in the business, will have the option to either retain their shares or sell 25% of their holding. Desai said the founding trio were likely to take the latter option, triggering a combined cash windfall of up to £70m before tax.

“We’ve been doing this a long time, but we’re keeping the vast majority [of our shares] and we’re excited about the long-term potential,” he said. “We want people to be committed for the long term.”

The largest shareholder is the venture capital group Index Ventures, with 20%, while the rival startup financiers Accel and Union Square also hold sizeable stakes. British investors such as Carphone Warehouse founder Charles Dunstone and the venture capitalist Jon Moulton are among other well-known names on the share register.

The company said it would use the £300m it hoped to raise to fund expansion into new countries and to “engender trust” with borrowers, lenders and regulators. It added that raising the cash would help it pursue growth without worrying about profitability in the medium term.

Despite rapid revenue growth, up from £51m in 2016 to £94.5m in 2017, the company racked up losses of more than £70m during those two years.

Desai said the company was only losing money because of the cost of building its business overseas, insisting that its UK operation was already profitable. He said the company would become more profitable as it reduced investments and started to rely more on repeat borrowers, who cost less to acquire and to vet.

“We make a 15% margin on the first loan, but a 55% margin on repeat loans,” he said. “At some point we become large enough and it becomes about repeat customers, when we’d expect the profitability to be very high.”

According to Funding Circle’s last set of accounts, revenues have been boosted as the company stepped into the space vacated by banks showing caution about lending amid economic uncertainty caused by Brexit. Revenues nearly doubled last year and are on course to show further growth for 2018, with half-year revenues already at £63m compared with £41m in the first six months of 2017.

Desai said Funding Circle would survive in the event of an economic crash that could affect the ability of borrowers to pay back investors.

He said the firm had deployed the same stress-testing criteria used by the Prudential Regulatory Authority, a UK regulator that monitors the health of the banking system, to track the resilience of banks.

With the offer of new shares, as well as the sale of existing shares by current investors, Funding Circle expects 25% of its stock to be publicly tradable after the float. The investment banks Merrill Lynch, Goldman Sachs and Morgan Stanley are acting as advisers on the float.

Some Funding Circle investors have reported losing money on their loans, but the company said it has advised customers to spread their investment more widely to protect it. In documents released alongside its flotation plans, the firm said the average return on loans made in 2017 was on course to be between 4.6% and 7.6%.