- Today’s main news: US lenders gang up on SoFi for banking play. RealtyShares closes largest commercial debt transaction to date. RateSetter launching IFISA. BlackRock invests in European robo. DCB Bank launches biometric ATM in India.
- Today’s main analysis: SoFi, Upstart, Lending Club and their sponsored deals.
- Today’s thought-provoking articles: 10 real estate investing fintech startups. Victoria making a play to be Australia’s fintech capital (podcast). Startup offers out for poor Filipino farmers reliant on predatory lending. ID Finance wins microfinance award in Kazakhstan.
- US lenders oppose SoFi banking move. GP: “This push from the banks to reject SoFi’s bank application says a lot of good things for Sofi. First, the banks feel threatened and worried. They are paying attention and are using every arrow in the quiver against SoFi. Second, this means that SoFi is likely to succeed, otherwise the banks wouldn’t worry about their process. And third, this means that once SoFi does hopefully get their banking license, the banks will then probably start on the normal path of buy/rent/build to compete more seriously with SoFi. I look forward to this natural market evolution.” AT: “It was bound to happen. Legacy institutions don’t like competition from new players, and it’s quite typical to petition the government to do their dirty work.”
- SoFi bank, Upstart, and Lending Club’s inaugural sponsored deals. GP:”More outstanding info on ABS securitization, pricing and comparison. “AT: “A must-read from PeerIQ.”
- RealtyShares closes largest commercial debt transaction to date. GP:”At $11.9 million. Crowd Funded real estate is a great market as long as the underlying type of real estate they work with makes sense.”
- Will Amazon become a force in fintech? GP:”Given the Whole Foods deal last week if they want to become a force they should buy an SME lender like OnDeck or Kabbage. “AT: “I’d say it already has, but speculating on what that might mean beyond payments and lending to their own business partners is nothing more than speculation.”
- Why Amazon’s growth in small business lending threatens the banking system. AT: “Amazon has suddenly become the hot topic of discussion in fintech. Because they’ve made a bold play in lending, to their own small business sellers (Amazon is a sort-of P2P marketplace for merchandise), the talking heads have decided they will likely become the world’s largest online bank (forgive the hyperbole). I can see some of the points, and they’re well taken, but I don’t know how it would benefit Amazon to move away from its core competency. To own a bank, now that would be a different story.”
- Amazon and the future of fintech. AT: “I generally like Seeking Alpha’s analyses, but this smacks of nothing more than keyword targeting for a search engine ranking. Frankly, I think we’re talking about this too much.”
- Blankfein talks up Goldman Sachs’ consumer lending business. GP:”If the CEO of GS is talking like this I expect GS to use this same model (deposits/debt) in other markets and soon. If I were them I would look into life insurance and SME lending or mortgages.”
- KBRA assigns preliminary ratings to Marlette Funding Trust 2017-2.
- MPL spigot on full blast with latest Marlette deal.
- Yirendai beats investor suit. GP:”Every time anything major happens public companies get hit with securities fraud lawsuits. It’s part of the experience. In this case it was due to the Chinese regulator imposing P2P rules that lead to Yirendai’s stock falling and the suit.”
- Samsung, Diebold Nixdorf partners on biometrics ATM tech.
- Examining fintechs’ new approach to growth. GP : “Online lenders have transitioned from acquiring customers at any and all costs to focusing very intently on unit-level profitability. This is a natural transition in any new markets.”
- Origin Investments leads the way in RECF.
- Money360 secures 8 top talent hires.
- OCC Office of Innovation schedules open office hours. GP:”A great innitiative. The office of the OCC continues to be the main agency innovating in fintech as we saw with the proposed Fintech charter.”
- RateSetter to launch IFISA. GP:”Shortly after Zopa launched it to in house investors last week.”
- Ranger Direct Lending fund updates on loan write-off.
- WeSwap launches partnership API.
- Nuance says biometrics have come of age.
- RateSetter, Al Rayan CEOs named in Queen’s honor list. GP:”Congratulations! The US has no Queen or King unfortuantely for the US startups. They have to rely on the president only, we suppose.”
- 10 real estate investing fintech startups. AT: “A good list. I hadn’t heard of some of these. And I like that the focus is not on U.S. companies entirely.”
- Most valuable venture-backed fintech unicorns.
- DCB Bank launches biometric ATM. AT: “It’s interesting that certain technologies, biometrics being one of them, are taking off in Southeast Asia more than in the U.S. Some of the most exciting news comes out of India and Singapore.”
- How Alibaba is taking over the Indian market. AT: “Alibaba is into way more than payments, as this article shows.”
- Wodehouse Capital Advisors launches exclusive investment network.
- Poor Filipino farmers get alternative to predatory lending with Cropital. AT: “I wonder how many other countries could benefit from this kind of platform? Kiva has had a good run with helping small businesses in a lot of small third-world countries get the funding they need to expand and grow. With farming such a big part of the economy in a lot of these countries, there is much room for other Cropital-like platforms, some of which could go cross-border.”
- TechPreneur Africa signs MOU with Abu Dhabi Global Market.
- Africa’s payments and remittances getting too crowded.
- United States
- US lenders rally to oppose SoFi banking move (Financial Times), Rated: AAA
- SoFi Bank, Upstart and Lending Club’s Inaugural Sponsored Deals (PeerIQ), Rated: AAA
- RealtyShares Closes Largest Commercial Debt Transaction to Date (BusinessWire), Rated: AAA
- Will Amazon become a force in fintech? (TechCrunch), Rated: A
- Why Amazon’s Growth in Small Business Lending Threatens the Banking System (Inc.), Rated: A
- Amazon And The Future Of FinTech (Seeking Alpha), Rated: A
- Blankfein talks up Goldman Sachs’ consumer lending business (Financial Times), Rated: A
- Kroll Bond Rating Agency Assigns Preliminary Ratings to Marlette Funding Trust 2017-2 (Crowdfund Insider), Rated: A
- MPL spigot on full blast with latest Marlette deal (Global Capital), Rated: A
- Chinese P2P Lender Yirendai Beats Investor Suit, For Now (Law360), Rated: AAA
- Samsung and Diebold Nixdorf in biometric ATM tie-up (Telecompaper), Rated: A
- Specialty Finance: Examining Fintechs’ New Approach to Growth (ABL Advisor), Rated: A
- This $ 130 Million Fund Is Leading The Way In Real Estate Crowdfunding (Forbes), Rated: A
- Money360 Secures Top Talent to Support Company Growth (Marketwired), Rated: B
- OCC Office of Innovation Schedules Open Office Hours for Fintech & Traditional Finance Firms (Crowdfund Insider), Rated: B
- United Kingdom
- UK P2P Lending Platform to Launch Innovative Finance ISA (National law Review), Rated: AAA
- Ranger Direct Lending fund updates on loan write-off (AltFi), Rated: AAA
- Currency exchange fintech launches partnership API (AltFi), Rated: A
- Nuance says that biometrics have reached their “coming of age” (SC Magazine), Rated: A
- RateSetter and Al Rayan CEOs named in Queen’s honours list (Financial Reporter), Rated: B
- Ping An Group Yao Bo: is actively promoting the listing of Lu Jin (01caijing), Rated: A
- European Union
- BlackRock gets into European ‘robo advice (Business Insider), Rated: AAA
- Wealth managers’ alternatives exposure reaches record high in 2017 (AltFi), Rated: A
- 10 Real Estate Investing Fintech Startups (Nanalyze), Rated: AAA
- Most valuable venture-backed fintech unicorns (Reuters), Rated: A
- Victoria making a play to be Australia’s FinTech capital (Omny.fm), Rated: AAA
- DCB Bank launches first biometric ATM (India Info Online), Rated: AAA
- How this #1 Global Conglomerate Is Engulfing Indian Market (Entrepreneur.com), Rated: A
- Wodehouse Capital Advisors launches exclusive investment network (Forbes India), Rated: A
- Sedania expects earnings boost with Islamic FinTech platform from 2H17 (The Edge Markets), Rated: A
- For Poor Filipino Farmers Reliant On Predatory Lending, This Startup Offers An Alternative (Forbes), Rated: AAA
- TechPrenuer Africa signs fintech MoU with Abu Dhabi Global Market (Finextra), Rated: AAA
- Africa’s payments and remittances space becoming crowded (How We Made It In Africa), Rated: A
- ID Finance awarded Microfinance Company status from the National Bank of Kazakhstan (ID Finance Email), Rated: AAA
US lenders rally to oppose SoFi banking move (Financial Times), Rated: AAA
A powerful lobby group for US banks is circling the wagons against SoFi, the biggest of a new breed of online lenders, urging the Federal Deposit Insurance Corporation to reject its application to launch a banking unit.
But the move should be resisted, said Chris Cole, senior regulatory counsel at the Independent Community Bankers of America, a trade group representing about 6,000 small banks holding almost $5tn in assets. He argued that SoFi is trying to take advantage of a “loophole” that would allow it access to the federal safety net, but without having to comply with all the laws a regular bank faces.
“We want these fintech companies to be subject to the same kind of regulations as banks are,” said Mr Cole of the ICBA.
Last year the student-loans specialist generated just over $8bn of loans, according to S&P Global Market Intelligence, more than any other online lender in America.
SoFi Bank, Upstart and Lending Club’s Inaugural Sponsored Deals (PeerIQ), Rated: AAA
The past week was a seminal one for SoFi, Lending Club, and Upstart.
SoFi filed for an ILC bank charter in the state of Utah. The application indicates SoFi seeks to offer deposits and a credit card product. SoFi Bank, led by Arkadi Kuhlman, would be capitalized with $166 Mn in equity. Kuhlman was the Former CEO of ING Direct (and money transfer service Zenbanx). ING Direct pioneered online deposit-banking and may provide a glimpse into SoFi’s mobile banking aspirations. SoFi’s focus on community, a credit card offering, and a rewards program reminds us of another highly successful mass affluent brand–American Express.
Collateral Comparison Benchmarks
We find that:
- Lending Club’s CLUB 2017-NP1 has among the highest excess spread among its peer group – indicating an exceptional return for whole loan investors in the seven party multi-seller group under the base case scenario.
- Lending Club’s closest comp may be OneMain’s OMFIT 2016-3. Both deals have comparable credit scores, loan balances, and collateral interest rate.
- OMFIT has approximately 50% of loss estimate as compared to CLUB 2017-NP1. This is driven primarily by channel effects (e.g., retail branch vs. online origination), other forms of security attached to the loan, and potentially a conservative ratings approach in evaluating CLUB 2017-NP1.
- Upstart has the lowest loss range estimate across the cohort of marketplace lenders, and the lowest coupons. Upstart also has a greater mix of longer-term loans. Upstart’s closest comp is Prosper’s PMIT 2017-1.
- PMIT 2017-1 has a comparable loss-range as UPST 2017-1 but picks up two points in excess spread due to higher WAC.
Capital Structure and Pricing
CLUB 2017-NP1 and UPST 2017-1 both secured an A- rating on the senior class.
However, CLUB 2017-NP1 has one notch higher ratings on its Class B and Class C tranches, at BB and BBB respectively, despite a 7% higher loss estimate as compared to UPST 2017-1.
In a notable milestone, the Class A tranche of CLUB 2017-NP1 priced at L+110 bps – the tightest pricing of any consumer loan securitization tracked by PeerIQ’s Securitization Tracker. From a funding cost perspective, the rate is competitive with term CD rates offered by GS Bank.
Although the equity tranche investors in CLUB 2017-NP1 are providing greater subordination to bond investors, they benefit from a less restrictive CNL trigger. CLUB 2017-NP1 has the highest starting CNL profile (MOB=1) vs. its peer group, starting at 7% and peaking at 29%.
By contrast, UPST 2017-1, structured and led by Goldman Sachs, has the lowest loss estimate amongst its peers, has a tighter initial trigger at 4% and peaks at 18% (a similar CNL profile to its closest comp PMIT 2017-1). UPST also benefits from somewhat higher structural leverage for equity tranche participants.
RealtyShares Closes Largest Commercial Debt Transaction to Date (BusinessWire), Rated: AAA
RealtyShares, a leading online marketplace for real estate investing, today announced the close of the company’s largest commercial real estate debt transaction to date. The deal was innovatively structured to include capital sourced from RealtyShares’ institutional investor network as well as its real estate crowdfunding marketplace.
A total of $11.9 million was sourced via RealtyShares for the acquisition and partial recapitalization of a 10-property portfolio of student housing in Seattle, WA. The properties are located within 1.5 miles of the University of Washington, a campus of 54,000 students. Entirely within the city of Seattle, this student housing portfolio is attractively located in one of the highest growth housing markets in the United States.
Will Amazon become a force in fintech? (TechCrunch), Rated: A
Amazon is the tech giant most likely to become a dominant player in fintech, predicted James Lloyd, Ernst & Young’s fintech leader, when speaking on stage at TechCrunch and TechNode’s event in Shenzhen, China on Monday.
Lloyd told TechCrunch that he expects Amazon to expand further into payments, lending and credit scoring.
Meanwhile, Amazon also recently announced that it had surpassed $1 billion in small-business loans to more than 20,000 merchants involved in its Amazon Marketplace in the U.S. UK, and Japan during the past year. In fact, since Amazon Lending began in 2011, it has surpassed $3 billion in loans to small businesses. The company is making money from both the sales of products via its online platform and by charging interest on the loans.
Amazon could disrupt small business finance in the same manner that it forever changed retail.
Currently, the company only offers short-term business loans ranging from $1,000 to $750,000 for up to 12 months to micro, small and medium businesses that sell on Amazon. It has the potential to expand into retail banking. Amazon could begin setting up deposit accounts or lending to small business borrowers outside of its own network. This could help Amazon grow its core business of online sales as well as establish the company as one of the leading online lenders to small companies. Eventually, Amazon could expand such operations to the other countries across the globe where it operates marketplaces. Think about the potential of moving into markets such as India and China.
Banks and other lenders should be nervous.
Amazon And The Future Of FinTech (Seeking Alpha), Rated: A
Can you imagine people that are accustomed to this kind of retail shopping are going to be comfortable with commercial banking, with financial institutions, as we know them now?
Furthermore, Amazon has already been in serious discussions with PayPal.
Here the essence of the banking system is not holding money for customers, but transferring funds from one place to another place. That is, the banking system of the future will work through the payments system.
And, this payments system will not necessarily be tied into where you hold your assets, just how your assets might be connected to the payments system.
The experimenting of Mr. Bezos is bringing him over the edge into the realm of the banking industry. The payments system is crucial. There is no telling how his experimentation might change the whole banking industry.
Blankfein talks up Goldman Sachs’ consumer lending business (Financial Times), Rated: A
Lloyd Blankfein, chairman and chief executive of the Wall Street bank, took to CNBC on Monday evening to talk about Marcus, the consumer lending business that the bank launched with some fanfare last October.
Quizzed by Jim Cramer, the host of Mad Money, Mr Blankfein said that the venture had so far been a big success, crashing through $1bn in loans originated and on course to hit $2bn by the end of this year. People had responded well to Goldman’s promise to save them “three, four, five hundred basis points” on the interest rates they were paying on credit card balances, Mr Blankfein said, while charging no fees of any description – ever.
Kroll Bond Rating Agency Assigns Preliminary Ratings to Marlette Funding Trust 2017-2 (Crowdfund Insider), Rated: A
Kroll Bond Rating Agency (KBRA) announced on Monday it has assigned preliminary ratings to three classes of notes issued by Marlette Funding Trust 2017-2. This is a $322.7 million consumer loan ABS transaction that is expected to close on June 29th.
MPL spigot on full blast with latest Marlette deal (Global Capital), Rated: A
Marketplace loan originator Marlette Funding is marketing its latest securitization following the pricing of breakout deals from Lending Club and Upstart last week.
The Marlette offering marks the second time the lender has tapped the securitization this year. The deal is structured as a club style offering similar to last week’s Lending Club securitization, which was the first time the lender issued a club deal. Marlette originates loans through Cross River.
Chinese P2P Lender Yirendai Beats Investor Suit, For Now (Law360), Rated: AAA
A California federal judge on Monday dismissed a securities fraud suit brought against Chinese peer-to-peer lending company Yirendai Ltd., giving leave to amend while warning the investors to tell him if “you’ve taken your best shot.”
At the onset of Monday’s hearing, U.S. District Judge Michael W. Fitzgerald issued a tentative ruling granting Yirendai’s motion to dismiss, but giving permission for a revised suit to be submitted to the court.
Samsung and Diebold Nixdorf in biometric ATM tie-up (Telecompaper), Rated: A
Samsung SDS America has teamed up with US payment technology specialist Diebold Nixdorf to develop a mobile-based biometric authentication system for cardless ATM transactions. The system allows customers to stage a withdrawal via their mobile banking app prior to arrival at the ATM. They then need to simply tap their mobile device to the near field communications (NFC) reader on the ATM, confirm their transaction and instantly receive a prompt to complete authentication via facial recognition on their mobile device.
Specialty Finance: Examining Fintechs’ New Approach to Growth (ABL Advisor), Rated: A
In this year’s keynote address at the Lendit USA conference, held during the first week of March in New York City, OnDeck’s Noah Breslow highlighted the four phases that tend to characterize the evolution of any new market. He also observed that the marketplace lending industry has already progressed past the first three phases – growing awareness, initial skepticism, and the ensuing stampede among new customers and providers. Today, Breslow emphasized, lenders are now adjusting to the fourth phase, which he predicted will see the strongest players thrive amid a still-rationalizing peer set.
To be sure, marketplace lending has grown rapidly over the past three years. To wit, originations of unsecured online loans jumped from $5.57 billion in 2014 to $11.99 billion in 2015, according to Orchard Market Data. After peaking in the fourth quarter of 2015, however, originations have since receded, pulling back roughly 18% last year. At the same time, Orchard documented that the 2014- and 2015-vintage loans experienced higher and faster charge-off rates than previous years, attributable at least in part to a higher proportion of subprime originations during those two years.
As a result, online lenders have transitioned from acquiring customers at any and all costs to focusing very intently on unit-level profitability. Gone are the days when a new, tech-enabled lender would look to prove out their business model by quickly accumulating customers with little or no regard to the bottom line.
While investments in the segment hit a peak in 2015, when there were 132 new investments in the space worth a combined $5.2 billion, according to PitchBook Data, new capital has continued to pour into the market.
This $ 130 Million Fund Is Leading The Way In Real Estate Crowdfunding (Forbes), Rated: A
The real estate crowdfunding industry is projected to be valued at more than $300 billion by 2025. The global crowdfunding industry has gone from $880 million in 2010 to $34.4 billion.
In real estate, especially, this has allowed companies like Origin Investments, a private equity real estate company, to raise more than $130 million for a fund — its third fund, to be exact. To date, this is the largest fund raised by a single U.S. real estate crowdfunding platform, ranking it alongside the backing that tends to launch hot tech startups into the limelight.
In fact, their expertise in asset management is what allowed them to raise $10 million in the first week of opening their third fund.
Money360 Secures Top Talent to Support Company Growth (Marketwired), Rated: B
Money360, the leading commercial real estate marketplace lending platform, recently announced the addition of eight new hires to support the company’s rapid expansion. The hires include five seasoned commercial real estate executives and three industry specialists, who were brought on to support the increased deal flow and expanding base of borrowers and capital partners in the U.S. and around the world.
The new hires include:
- Paul Cleary, Chief Operating Officer: Cleary was Executive Vice President of Cherrywood Commercial Lending, LLC, where he helped found the company and oversaw loan production and marketing. Prior to that, he was the First Vice President of the Business Services division at Kinecta Federal Credit Union. He earned his MBA from University of California, Irvine, his JD from the University of San Diego School of Law and his Bachelor of Arts from University of California, Santa Barbara.
- John Calder, Director of Credit Administration: Calder has worked as a commercial real estate operator and executor for more than 20 years at companies including SABAL Financial Group, Mir, Mitchell & Company, LLP and Sterling Bank & Trust. He earned his bachelor’s degree in business at University of Colorado, Boulder.
- Stratos Athanassiades, Regional Director – Midwest Region: With more than 20 years of experience, Athanassiades has held a number of managerial roles for Alliant Credit Union, Business Partners, LLC, MetLife and Wachovia Securities. He earned his bachelor’s degree in political science and international relations from Northwestern University.
- Nick Jans, Regional Director – Southwest Region: Jans has originated and produced more than $2.1 billion in commercial real estate financings. His background includes positions as principal at Willow Bend Commercial Capital, Vice President at New York Life Investment Management and Investment Director at Massachusetts Mutual Life Insurance Company. He earned his bachelor’s degree in business administration from Saint Louis University in Missouri.
- Craig Brown, CRE Loan Underwriter: With nearly 30 years of experience, Brown has held a number of executive and managerial positions at real estate consulting companies, mortgage firms and major banks. His wide range of experience includes positions at Security Pacific Bank, CORE Realty Holdings, LLC and Wells Fargo Bank. Brown earned his Bachelor of Arts from Stanford University and his JD from Western State University.
In addition to the new executives, the new hires also include three support specialists: Jared Wright, CRE Loan Analyst; Annie Chantaduly, CRE Loan Expeditor; and Joel McRae, CRE Customer Service specialist.
OCC Office of Innovation Schedules Open Office Hours for Fintech & Traditional Finance Firms (Crowdfund Insider), Rated: B
The Office of the Comptroller of the Currency (OCC) is opening up its doors at its Office of Innovation. Announced today, the OCC will host office hours for its Office of Innovation at the OCC’s district office in New York City. The OCC is welcoming national banks, federal savings associations and Fintech companies to stop by and visit from July 24 to 26.
If you are interested, you may contact the OCC and request a slot through July 5.
You may schedule time for the Office of Innovation here.
UK P2P Lending Platform to Launch Innovative Finance ISA (National law Review), Rated: AAA
RateSetter, a UK P2P lending platform, has raised £13 million in its latest round of fundraising as it prepares to launch its “innovative finance” ISA (IF-ISA). The IF-ISA allows investors, or lenders, to earn interest free of income tax. Before a P2P platform can offer its own ISA, it must be fully authorised by the Financial Conduct Authority (FCA).
Ranger Direct Lending fund updates on loan write-off (AltFi), Rated: AAA
Investors in the £250m Ranger Direct Lending investment trust have had a bumpy 2017 after a stellar run in 2016 where the portfolio outperformed nearly all its rivals as well as the broader marketplace, as shown in the graph below.
Currency exchange fintech launches partnership API (AltFi), Rated: A
Peer-to-peer money exchange firm WeSwap has launched a new service called “WeSwap Connect”. The B2B platform is designed to allow other firms to offer WeSwap’s travel money services alongside their own, via a “one-click” API integration.
WeSwap has named peer-to-peer lender Zopa as one of 18 new partners to sign up to the new service in the last 12 months, alongside such firms as SIXT, Perkbox and Secret Escapes.
WeSwap allows holidaymakers to swap currency with people travelling in the opposite direction. That currency is then loaded onto a Mastercard capable of holding 18 currencies simultaneously. WeSwap Connect allows partner firms to offer their customers a co-branded version of that Mastercard to take on holiday.
Nuance says that biometrics have reached their “coming of age” (SC Magazine), Rated: A
The company recognises biometrics’ inherent flaws: struggling to identify people in noisy environments who are using voice recognition, or failing to authenticate someone using a finger scanner thanks to dirt in the device, when used as a stack of defences, can be used as a case to dismiss biometrics.
There are a few examples of the media misrepresenting biometrics too. Prime example: the BBC using twin brothers to evade detection of HSBCs “my voice is my password” voice recognition system.
What further exacerbates the problem is that there are numerous examples of where a failure to authenticate might lead to ‘cart abandonment’ in the e-commerce space, for example, and consequently lead to lost revenue for the company.
For context, the UK’s Annual Fraud Indicator says the cost per year of fraud to the UK is stood at £193 billion. An extra 21 percent would push that figure up to £233.53 billion.
This is where Nuance says biometrics could help. Internal research from the company claims 74 percent of tier-one financial institutions and 76 percent of telcos still exclusively use knowledge-based authentication to secure transactions in contact centres.
More than 1,500 cases of fraud totalling almost £4 million were stopped in just the first eight months of voice biometrics being deployed.
RateSetter and Al Rayan CEOs named in Queen’s honours list (Financial Reporter), Rated: B
Al Rayan Bank CEO, Sultan Choudhury, and RateSetter founder and CEO, Rhydian Lewis, have both received an OBE in the Queen’s Birthday Honours list.
Lewis was named in the list as a ‘Peer to Peer and Financial Inclusion Innovator’ and was honoured for services to Financial Services.
Choudhury was honoured in recognition of his services to the UK Market for Islamic Finance.
Ping An Group Yao Bo: is actively promoting the listing of Lu Jin (01caijing), Rated: A
On the afternoon of June 16, at the shareholders’ meeting of Ping An Group, Yao Bo, executive vice president and chief financial officer of Ping An Group, said that in addition to the listing of the land, the shareholders also mentioned the listing of Ping An Securities, Is: if you can enhance the overall value, will be actively considered.
BlackRock gets into European ‘robo advice (Business Insider), Rated: AAA
BlackRock, the world’s biggest asset manager, made its first push into Europe’s “robo-advice” market on Tuesday after taking a stake in Anglo-German digital investment manager Scalable Capital.
BlackRock, which manages $5.4 trillion across a range of actively managed and index-tracking funds, led a €30 million (£26.2 million, $33.6 million) funding round for Scalable alongside its two existing German venture capital backers, a joint statement said.
The funding will help Scalable expand its robo-advice business — which uses low-cost exchange-based funds and online distribution — with financial institutions and corporates to help grow assets past the €250 million raised in the 16 months since launch from more than 6,000 retail clients.
Patrick Olson, BlackRock’s chief operating officer for Europe, the Middle East and Africa, and who will join Scalable’s supervisory board, said the decision to invest came as investors increasingly wanted to access their holdings using technology.
Wealth managers’ alternatives exposure reaches record high in 2017 (AltFi), Rated: A
Seven Investment Management (7IM) has increased its exposure to alternative strategies to the firm’s highest ever levels as it seeks defensive returns away from traditional fixed income and equities.
This has prompted its investment management team to look to new strategies, for example, the £1.6bn 7IM AAP Balanced fund has seen alternative strategies exposure increase from 2.5 per cent at the start of 2016, moving to 5.5 per cent a year ago, and up to 8 per cent in May 2017.
The previous peak was 7 per cent in October 2011 during the Eurozone crisis and US debt ceiling crisis.
10 Real Estate Investing Fintech Startups (Nanalyze), Rated: AAA
One asset class that’s just begging to be reinvented these days is that of realty. What’s the matter with realty and why does it need to be reinvented? A few problems:
- The traditional way to invest in property is to buy a single house which offers zero diversification to the buyer
- Commercial property is not very accessible for retail investors due to higher price points
- Real estate has very, very low liquidity. You can’t buy or sell it very fast.
Founded in 2014, New York startup Cadre has taken in $133 million in funding so far from investors that include some big names like Alibaba’s Jack Ma, Goldman Sachs, Khosla Ventures, and Peter Thiel’s Founders fund to name a few. Just last week, Cadre closed their Series C round of $65 million led by Andreessen Horowitz.
Over the past 9 years, LendInvest has lent $1.28 billion in loans to developers that have bought, built, or renovated 3,000 properties across the UK.
Founded in 2012, Los Angeles startup RealtyMogul.com has taken in $45 million in funding so far to develop an “online market for real estate investing”. More than 120,000 investors are using the platform to invest $270 million into commercial real estate deals.
Founded in 2013, San Francisco startup RealtyShares is a crowdfunding platform for both commercial and residential real estate financing which has taken in $35.7 million in funding so far (think Lending Club for real estate).
New York startup Knock has taken in $34.5 million in funding to solve the problem of poor liquidity in residential real estate. Their online home selling platform provides a guaranteed way to sell their home in six weeks. The fees are 6% which also includes a 3% commission to the agent representing the buyer. Why we still need “agents” in this day and age is mind boggling.
Oakland California startup Roofstock has taken in $33.25 million in funding to develop an online marketplace that lets you invest in leased single-family rental homes. Essentially, you can become a landlord by purchasing homes that already have tenants.
London England startup Property Partner has taken in $32.26 million in funding so far to develop a platform that offers residential real estate crowdfunding with a secondary exchange for investors to trade holdings on.
Arizona startup Offerpad has taken in $30 million in funding so far to offer solutions that make the online buying and selling of homes more efficient. In the case of Offerpad, that offer to buy can close in as little as 5 days and up to 90 days.
Los Angeles startup Peerstreet has taken in $21.1 million in funding so far to develop a crowdfunding platform for investors to easily access high yielding loans, collateralized with real estate.
Hamburg startup Exporo has taken in $18.03 million in funding so far to build a real estate crowdfunding platform specifically for zee Germans.
Most valuable venture-backed fintech unicorns (Reuters), Rated: A
Victoria making a play to be Australia’s FinTech capital (Omny.fm), Rated: AAA
Victoria is creating a FinTech hub and will host the first FinTech festival in Australia. The Victorian Minister for Small Business, Innovation and Trade, Philip Dalidakis chats to Trevor Long and Nick Bennett on Talking Technology about making a play to be Australia’s FinTech capital and the joys of dial-up internet.
DCB Bank launches first biometric ATM (India Info Online), Rated: AAA
Edging over competitors, DCB Bank launched first of its kind ATM, that will not require a debit card to dispense cash as the machine will instead verify the customer’s Aadhar card details including the iris and the fingerprint of the customer.
However, the ATM will also accept debit cards swipes for the purpose of cash withdrawal.
The high-tech ATM was installed in the capital of Telangana, said a press release issued by the bank.
How this #1 Global Conglomerate Is Engulfing Indian Market (Entrepreneur.com), Rated: A
China’s Alibaba Group Holding Ltd. has already made a foothold in India with its ticketing operations, cloud computing and news agency.
The company has also invested in digital wallet Paytm for the launch of Paytm Mall, a mobile shopping app which offers a mixed experience of a mall and bazaar to Indian customers.
In September 2015, Alibaba Group and Ant Financial invested about $680 million in the online payment platform.
In March 2015, Paytm received a $575 million investment from Alibaba Group after Ant Financial Services Group, an Alibaba Group affiliate, bought a 25% stake in One97(the parent company of Paytm), as part of a strategic agreement. Ant Financial Services Group, which operates Alipay the biggest online payment platform, will help Paytm improve user experience and continue doing good in competitive digital wallet space.
Wodehouse Capital Advisors launches exclusive investment network (Forbes India), Rated: A
Wodehouse Capital Advisors, a multi-family office and mid-market focussed investment bank has launched an investment network for high net worth individuals (HNIs).
The platform also seeks to be an “impartial peer-to-peer networking forum”. According to Manmohan Tiwana, managing director and CEO, Wodehouse Capital Advisors, “WIN is a great way to invest, as it allows you to do so in a social environment and also earns you profits at the same time.” Aside from offering investment opportunities, WIN will offer its members “various luxuries and lifestyle-related products” such as access to high-end event and conferences organised by Wodehouse Capital Advisors.
Sedania expects earnings boost with Islamic FinTech platform from 2H17 (The Edge Markets), Rated: A
Technology empowerment company Sedania Innovator Bhd expects income to start coming from recently acquired Islamic FinTech platform provider Sedania As-Salam Capital (SASC) as early as the second half of financial year ending Dec 31, 2017 (FY17).
According to the independent market research report, the personal financing market under the Islamic banking system in Malaysia was valued at RM28.8 billion in 2016, amounting to 41.7% of the total personal financing market, it said.
For Poor Filipino Farmers Reliant On Predatory Lending, This Startup Offers An Alternative (Forbes), Rated: AAA
For Cropital cofounder Rachel de Villa, her company’s mission is rooted in personal experience. After seeing her grandmother lose her pineapple farm, she became determined to prevent other farmers from losing their livelihoods due to financial hardship.
To date, Cropital has facilitated loans for 600 farmers in six provinces throughout the Philippines. The team vets potential borrowers based on the types of crops they’re growing (or livestock they’re raising) and suitability to the region. Once a farmer successfully repays a loan, he or she can recommend other local farmers to the platform, who will also go through the vetting process.
Investments begin at 5,000 Philippine pesos (about $100 USD) and increase by increments of the same. Cropital built a custom virtual wallet for its platform, and users must transfer money through that system.
TechPrenuer Africa signs fintech MoU with Abu Dhabi Global Market (Finextra), Rated: AAA
TechPreneur Africa, a social impact firm focused on harnessing innovation and entrepreneurship to achieve real economic impact across Africa has signed a memorandum of understanding (MOU) with Abu Dhabi Global Market (ADGM), an international financial centre in Abu Dhabi, to foster and support the growth and activities of FinTech in the Middle East and African regions.
ADGM is the first in the MEA region to have a FinTech regulatory laboratory (RegLab) regime to foster innovation in financial services.
Techpreneur Africa who officially launched operations in the African Market in 2015, are delighted at the potential the opportunity presents to African Fintech entrepreneurs, firms and the financial services industry in its drive towards 30% financial inclusion growth by 2020.
Africa’s payments and remittances space becoming crowded (How We Made It In Africa), Rated: A
We asked Tom Jackson, co-founder of Disrupt Africa, about the report’s major takeaways. We asked Tom Jackson, co-founder of Disrupt Africa, about the report’s major takeaways.
According to Disrupt Africa’s recent report, there are over 300 fintech start-ups active in the continent. I assume some of them are high-potential, fast-growing enterprises, while others are struggling for survival?
The extent to which Africans are lacking access to formal financial services means there is an innate potential in fintech on the continent, as evidenced by the fact there are more than 300 companies working in the space. However, there is a danger of saturation, especially in segments such as payments and remittances, and we would hope to see some consolidation over the coming years as there is not room for so many individual companies to all scale and succeed.
What, according to you, have been some of the more noteworthy fintech investments over the past year?
Zoona’s $15m round last August was major, with Nomanini also raising [funding]. In the payments space, Nigeria’s Flutterwave raised a sizeable round. It has also been interesting to see so many blockchain start-ups raising funding – notably BitPesa, Custos Media, The Sun Exchange and BitFinance. In fact, our data suggests that blockchain start-ups stand a greater chance of securing investment than any other type, with almost 40% of African blockchain start-ups backed so far.
According to your report, the payments and remittances market is the most popular sub-category within the fintech space. Why do you think that is?
Moving money between African countries, and in and out of Africa, is an expensive business – with transaction fees charged by banks and traditional remittance firms, such as Western Union, starting as high as 10%. Tech-enabled payments and remittances start-ups can bring these prices right down – often to around 2% or 3% – and open up new economic opportunities for Africans.