- Today’s main news: OnDeck prices $125M securitization. Kabbage issues $200M in ABS notes. LendInvest expands buy-to-let to Scotland. Celsius surpasses $4B in crypto lending. ID Finance raises 4.95 GBP on Crowdcube. IOU Financial releases 3- and 9-month financial results.
- Today’s main analysis: Why the banking system is broken.
- Today’s thought-provoking articles: Productivity trends and LendingClub earnings. Consumers and holiday credit activity. Gen Z FICO scores are higher than Gen X and Millennial scores. Fintech’s third wave.
- OnDeck prices $125 million securitization. This will be the highest rating ever for an ABS in the small business loan category of online lending. Congratulations!
- Kabbage issues $200 million in notes to 2019-1 ABS series. Added to $700 million outstanding.
- Productivity trends. A PeerIQ analysis. Also includes a bit on LendingClub Q3 earnings.
- Consumers to continue strong credit activity over holidays. According to TransUnion.
- Gen Z has higher FICO scores than Gen X and Millennials. Just give them to default.
- Fintech’s third wave will change banking.
- Rob Frohwein on the growth of Kabbage.
- LendingPoint makes No. 9 on Deloitte 2019 Technology Fast 500.
- Fundrise touts 5-year performance.
- Digital assets are the future of real estate investing.
- Bankers association wants to shut down shadow banking.
- StreetShares costs, losses soar.
- Toast to help restaurants secure loans.
- There is a tech firm for your loan.
- Reliant Funding debuts free business guide for veteran-owned businesses.
- Loan Doctor launches online 6 percent APY high yield CD account.
- RefiJet is LendingTree’s top-rated auto refinance company for fourth straight quarter.
- JOUST partners with AFFINITY.
- BFS Capital names chief operating officer.
- LendInvest expands buy-to-let offering into Scotland.
- Celsius Network surpasses $4 billion in crypto loans.
- Larger businesses can get loans at MarketInvoice.
- MarketInvoice rebrands to MarketFinance.
- Why the banking system is broken. This is an excellent analysis from Hacker Noon with some insight into peer-to-peer lending.
- 2019 DeFi inflows doubled.
- TrustToken partners to offer interest on 5 currencies.
- Lending is one way to earn from cryptocurrencies.
- Spain: ID Finance raises 4.95 million GBP on Crowdcube.
- China: Yirendai digital Q3 earnings preview.
- Canada: IOU Financial releases 3- and 9-month financial results.
- China: Tencent plans blockchain-based virtual bank.
- Canada: Sezzle opens office in Toronto.
- India: Who bears fintech risk?
- Netherlands: Fintech comparative guide.
- China: OneConnect Financial Technology files for $100 million IPO in the U.S.
- Indonesia: ALAMI claims first sharia-based VC funding round in Southeast Asia.
- France: Crowdfunding association gets new chairman.
- China: Jack Ma says Singles’ Day shopping misses expectations.
- United States
- OnDeck Announces Pricing of $ 125 Million Securitization (OnDeck), Rated: AAA
- Kabbage issues $ 200M in additional notes to 2019-1 ABS series (Asset Securitization Report), Rated: AAA
- Rob Frohwein on the Growth of Kabbage, from Lending to Payments (The Financial Revolutionist), Rated: A
- Productivity Trends, LC Q3 Earnings (PeerIQ), Rated: AA
- Consumers Poised to Continue Strong Credit Activity this Holiday Season (Markets Insider), Rated: AAA
- Gen Z is turning around credit: Survey of NearPrime borrowers finds Gen Z FICO scores higher than Millennials & Gen X (LendingPoint Email), Rated: AAA
- LendingPoint No. 9 Fastest Growing Company in North America on Deloitte’s 2019 Technology Fast 500 (Yahoo! Finance), Rated: A
- How Fintech’s Third Wave Will Change How You Bank (Fortune), Rated: AAA
- Real Estate Investment Platform Fundrise Touts Performance Over Past 5 Years (Crowdfund Insider), Rated: A
- The Future Of Real Estate Investing: Digital Assets Are Here, Now (Forbes), Rated: A
- Independent Community Bankers of America Supports Closure of Industrial Loan Charter “Loophole” to Eliminate “Shadow Banking” (Crowdfund Insider), Rated: A
- Costs, Losses Soar At StreetShares (deBanked), Rated: A
- Reliant Funding Debuts Free Comprehensive Business Guide for Veteran-Owned Businesses (The Grunion), Rated: B
- Toast Launches Toast Capital To Help Restaurants Secure Loans (Crunchbase), Rated: A
- Want a loan? There is a tech firm for It (Keyc.tv), Rated: A
- Loan Doctor Launches Online 6% APY High Yield CD Account (Markets Insider), Rated: B
- RefiJet Is LendingTree’s Top-Rated Auto Refinance Company for the Fourth Consecutive Quarter (Benzinga), Rated: B
- JOUST Partners With AFFINITY To Shake Up The Home Loan Landscape (BandT), Rated: B
- BFS Capital Names Brian Simmons as Chief Operating Officer (BusinessWire), Rated: B
- United Kingdom
- LendInvest expands Buy-to-Let offering into Scotland (Property Funds World), Rated: AAA
- Celsius Network surpasses $ 4 billion in crypto loans (CryptoSlate), Rated: AAA
- Larger businesses can now get loans in new borrowing scheme (Elite Business Magazine), Rated: A
- MarketFinance Set to Transform Business Lending Industry (PR Newswire), Rated: B
- Yirendai Digital Q3 2019 Earnings Preview (Seeking Alpha), Rated: AAA
- Tencent plans blockchain-based virtual bank on back of new Hong Kong licence (Fintech Futures), Rated: A
- Ping An fintech spinoff OneConnect Financial Technology files for a $ 100 million US IPO (Nasdaq), Rated: A
- Alibaba’s Jack Ma Says Singles’ Day Shopping Results Miss Expectations (The Epoch Times), Rated: B
- European Union
- Fintech ID Finance Raises £4.95 Million on Crowdcube, Claims Record for Spain (Crowdfund Insider), Rated: AAA
- FinTech Comparative Guide (Mondaq), Rated: A
- French Crowdfunding Assocaition Appoints New Chairman (Crowdfund Insider), Rated: B
- The Banks Have Gone Mad and the System is Broken (Hacker Noon), Rated AAA
- DeFi Inflows Doubled in 2019 (Cryptovest), Rated: AAA
- TrustToken Partners to Offer Industry-Leading Interest on 5 International Currencies (Yahoo! Finance), Rated: A
- 7 Practical Ways of Earning From Cryptocurrency (Cryptomorrow), Rated: B
- Who Bears the Risk in Fintech? (FinDev Gateway), Rated: A
- Indonesia’s ALAMI gets funding, claims to be the first sharia-based VC funding round in SEA (e27), Rated: A
- IOU Financial Inc. Releases Financial Results for the Three and Nine-Month Period Ended September 30, 2019 (Yahoo! Finance), Rated: AAA
- Sezzle opens office in Toronto, taps PayPal executive to lead it (StarTribune), Rated: A
OnDeck Announces Pricing of $ 125 Million Securitization (OnDeck), Rated: AAA
On Deck Capital, Inc. announced today that it has priced $125 million initial principal amount of Series 2019-1 Fixed Rate Asset-Backed Notes (the “Notes”) in a private securitization transaction. The Notes, which will be issued in five classes, were priced with a weighted average fixed interest rate of 3.04% per annum. It is expected that DBRS, Inc., in satisfaction of one of the closing conditions, will rate the Notes at closing. The anticipated AAA(sf) DBRS rating for the Class A Notes would be the highest rating ever for a class of notes in an asset-backed securitization of small business loans in the online lending industry.
Productivity Trends, LC Q3 Earnings (PeerIQ), Rated: AA
The labor department released the latest productivity data, which showed a contraction in productivity – a 30 bps decline in the recent quarter (vs +90 bps growth expectation), the biggest decline in 4 years. Economists have attributed the surprise decline to the ‘cat memes’ and Instagram. (#wekid.)
Below we show an excerpt of long-run productivity growth. Takeaways:
- Long-run US GDP and productivity growth is at a lower trend level (2.3%) than observed during the 1960+ period (3.1%)
- This means that the ‘speed limit’ for GDP and income growth is about ~2% (consistent with 10-year bond yields of ~1.9% – another rough correlation for growth)
Deserve, a FinTech startup, led by CEO Kalpesh Kapadia, raises $50 million in funding led by Goldman Sachs. Deserve is a lending-as-a-service infrastructure provider that sells their platform to firms that want to offer their own branded cards. Sallie Mae, Accel, Aspect Ventures, Pelion Venture Partners and Mission Holdings also invested in the Series C round.
LendingClub Beats Earnings, Markets Expect Q4 GAAP Profitability
The earnings are a milestone in that it is the first time that LC experienced a positive adjusted net income since the turnaround Sanborn led since becoming CEO in 2016.
- Revenue also topped records at $204.9 million, up 11% year over year.
- LendingClub crossed a record $3.3 billion in originations for the quarter, up 16% year over year
- GAAP net loss of just $400,000 compared to the prior year period where they lost $22.8 million. Analysts expect Q4 GAAP profitability
- Adjusted net income came in at $8 million, up from a loss of $7.3 million, in the prior year period.
Consumers Poised to Continue Strong Credit Activity this Holiday Season (Markets Insider), Rated: AAA
New TransUnion (NYSE: TRU) data from the just-released Q3 2019 Industry Insights Report point to a few factors that could portend good things for retailers this holiday season.
TransUnion found that private label card originations increased 2.4% to 12.4 million in Q2 2019 (latest data available), marking the first such year-over-year increase in 11 quarters. Origination growth is being driven by prime and above consumers, with their share of new accounts growing faster than non-prime borrowers. The number of new bank-issued credit cards also rose in Q2 2019, increasing 5.2% to 16.6 million, the fifth straight quarter of yearly growth.
As a result of this growth, the number of consumers with access to revolving credit now stands at a record high 200.5 million consumers as of Q3 2019, up from 198.0 million in Q3 2018. On average, bank-issued credit card balances for individuals have grown to $5,668, while private label average card balances, per individual, grew to $2,022 in this timeframe.
Charging Up Credit Cards in November and December; Paying Them Down in the New Year
| Percent of Bankcard
Debt Paid Down in the
|Q4 Private Label
Debt Paid Down
in the Following
|2018/2019||$31.9 billion||92%||$6.6 billion||102%|
|2017/2018||$32.6 billion||84%||$6.3 billion||94%|
|2016/2017||$33.3 billion||72%||$8.5 billion||30%|
Gen Z is turning around credit: Survey of NearPrime borrowers finds Gen Z FICO scores higher than Millennials & Gen X (LendingPoint Email), Rated: AAA
We recently analyzed just over 5 million NearPrime loan applications received between July 2018 and July 2019 to find that Gen Z, or those born after 1996, have an average FICO score that’s higher than both Millennials and Gen X. This is especially interesting when you consider that how long you’ve had credit is a key factor when it comes to credit scoring. And even with the duration of credit use playing a role in FICO scores, Gen Z is off to a strong start in building their credit profile.
What does Gen Z want personal loans for?
- 3X more likely than a Millennial to apply for loans for a major purchase.
- 2X more likely than both Gen X and Millennials to apply for loans for healthcare.
- More than 2X more likely than a Millennial to apply for loans for auto needs.
LendingPoint No. 9 Fastest Growing Company in North America on Deloitte’s 2019 Technology Fast 500 (Yahoo! Finance), Rated: A
Data and technology platform LendingPoint today announced it ranked No. 9 on Deloitte’s Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and energy tech companies in North America and now in its 25th year. LendingPoint grew 8,812.87% since its start in 2015, hit successive usage records year-over-year and is now running $100 million per month in loan originations through its platform.
How Fintech’s Third Wave Will Change How You Bank (Fortune), Rated: AAA
The first wave met demands resulting from the aftermath of the financial crisis: A need for credit fueled alternative lenders. Online and peer-to-peer marketplaces, such as Prosper and LendingClub, flourished, while laid-off workers seeking to re-skill buoyed student loan providers like Social Finance, or SoFi.
The next wave swelled atop a flood of mobile devices that came after Apple debuted the iPhone in 2007. Access to consumers became the primary object for upstarts. Apps appealed to younger generations, used to flicking and tapping smartphone screens rather than visiting branch offices.
This paradigm is still in full swing. Some of its best-known champions: Credit Karma, a free credit score provider, Internet-only “neobanks” like Chime, Monzo, and N26, and online stock traders like Robinhood.
Even as the second wave crests, a third is beginning to rise: Automation.
Real Estate Investment Platform Fundrise Touts Performance Over Past 5 Years (Crowdfund Insider), Rated: A
Fundrise reports that during the past five year period, the platform portfolio has averaged a 10.79% return. In comparison, Vanguard’s Total Stock Market ETF and Real Estate ETF produced average returns of 7.92% and 7.40%, respectively, states Fundrise.
The Future Of Real Estate Investing: Digital Assets Are Here, Now (Forbes), Rated: A
Some of the most proven use cases include agricultural supply-chain management and food safety, tokenization of real estate assets, foreign exchange transactions, immutable voting, interbank settlements, securing patient data and land registry. And the list goes on.
Be it company equity, asset-backed securities, cryptocurrencies or security token offerings (STOs), the age of digital assets is now, and they are real-deal investments, with
The Independent Community Bankers of America (ICBA) has issued a statement of “strong support” regarding pending legislation targeting Industrial Loan Charters (ILC). The Eliminating Corporate Shadow Banking Act of 2019 (S 2839) was introduced to the Senate Banking Committee yesterday sponsored by Senator John Kennedy.
Independent Community Bankers of America Supports Closure of Industrial Loan Charter “Loophole” to Eliminate “Shadow Banking” (Crowdfund Insider), Rated: A
The Independent Community Bankers of America (ICBA) has issued a statement of “strong support” regarding pending legislation targeting Industrial Loan Charters (ILC).
The Eliminating Corporate Shadow Banking Act of 2019 (S 2839) was introduced to the Senate Banking Committee yesterday sponsored by Senator John Kennedy.