Thursday June 7 2019, Weekly News Digest

economic downturn

News Comments Today’s main news: SoFi completes first rated pass-through certificates offering. Y Combinator backs Monzo for U.S. expansion. Funding Circle set for largest securitization. Dianrong shifts strategy. Funding Circle inks 50M Euro deal with Avida Finans. Open raises $30M. Today’s main analysis: Chance for recession is rising (A MUST-READ PeerIQ analysis). Today’s thought-provoking articles: […]

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

economic downturn

News Comments

United States

United Kingdom

International

China

APAC

News Summary

United States

SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA

SoFi announced today that it completed a $200 million offering of post-graduate student loan asset-backed certificates issued by SoFi Alternative Trust 2019-C (SAT 2019-C). The Certificates are rated single-A by DBRS and mark the first rated pass-through certificate transaction issued by SoFi and the first publicly rated student loan pass-through transaction in the securitization market.

Unlike traditional student loan ABS transactions, SAT 2019-C does not use overcollateralization or bond subordination as forms of credit enhancement.  The A rating assigned to the certificates by DBRS reflects the strong credit attributes of the borrowers. The portfolio has a weighted average credit score of 783 and a weighted average annual income of $175,746.

Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA

Leading US startup backer Y Combinator has become the latest high-profile backer of Monzo, on the eve of the bank’s American expansion.

Today Monzo confirmed it had raised £113m in a round led by Y Combinator’s Continuity fund, along with Latitude, General Catalyst, Stripe, Passion Capital and others.

Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA

Weak economic data continue – inflation expectations tumble, manufacturing has moved into recession, and the 10y/3m yield curve remains mildly inverted. Although the FOMC took no rate action this week, dovish signaling has led market participants to expect a 70% chance of 3 or more rate cuts in 2019.

Source: WSJ, PeerIQ

CPI Since 1879 During Business Cycles

Source: Deutsche Bank, PeerIQ

How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA

Scott Rosenberg: Kabbage represented a great opportunity for me to apply my prior experiences and help architect the future vision of a fast-growing company. Every role in my career has allowed me to lead or influence multiple divisions within a company, which makes my operational approach similar to that of a COO or General Manager. Beyond leading the CFO office in previous roles, I led Marketing at J. Crew, Operations at Pillsbury and most recently was the President of Purchasing Power. This broad vantage point lets me ensure financial growth as the CFO, but also identify opportunities to establish operational efficiencies more broadly across the organization. I take the same approach at Kabbage as I lead multiple disciplines, including Capital Markets and Legal. It encourages transparency across teams which allows us to move faster. With more than 175,000 customers accessing over $7.0 billion to-date, it’s an exciting role to drive hyper growth and deliver the best products and experiences for U.S. small businesses.

According to a survey released today by Kabbage that polled more than 500 companies across multiple industries, 80% of American entrepreneurs said they felt confident in their readiness to weather another economic crisis.

H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A

H&M and Klarna announced that they have expanded their current partnership agreement to also include the US market, in the development of an unrivalled payments and shopping experience across touchpoints. Together, H&M and Klarna are aiming at further integrating H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.

This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A

CrowdStreet, which launched in 2014, is the leading player in the fast-growing field of online commercial real estate investing. The company’s online Marketplace allows individual investors to reap the rewards of investing in the $6 trillion commercial real estate sector, investing in everything from multifamily apartment buildings to self-storage facilities and senior-living centers.

The average return on the first 14 deals financed on CrowdStreet’s platform — those which have fully wrapped up, yielding final returns to investors — is 31.7%, with a 1.6x equity multiple and a holding period of two years.*

MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A

Total student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from passing financial milestones and saving for the future.

Massachusetts Mutual Life Insurance Company (MassMutual) has teamed up with CommonBond to offer a new student loan refinancing program through CommonBond with a rate advantage to help people take control of their student debt. This program – available online to all individuals with student debt today — is among the first of its kind in the student lending and insurance industries. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisors, currently 9,000 strong.

Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A

Ocrolus today announced $24M in Series B funding led by Oak HC/FT, a premier venture growth equity fund with deep fintech expertise. Ocrolus is powered by an elegant blend of artificial intelligence and crowdsourced human quality control, enabling firms across the financial sector to automate high-stakes business processes with precision. The company will use its new funding to automate underwriting workflows for lenders and banks, and expand into new verticals.

How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A


Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A

Forged in the wake of the financial crisis and political movements like Occupy Wall Street, digital advisory firms have become decidedly open about their political agendas. By advocating for the democratization of financial advice and stronger consumer protections, digital investment platforms have become the face of progressive politics in the market. That’s attractive to young investors — assets managed on digital platforms are expected to soar to $1.26 trillion by 2023, according to a report by Aite Group.

Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A

The $1.5 billion-asset bank agreed on Monday to buy Seed for an undisclosed amount. The 5-year-old fintech offers a mobile account for small businesses, complete with bill payment, remote deposit and an attached debit card.

“It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A

Today, PayActiv, Inc., the leader in employer-sponsored, holistic financial wellness service for employees, unveiled its documentary made in collaboration with Early Light Media and Roundtable Companies about the direct benefits of timely earned wage access. Now available at ItsAboutTimeTheFilm.com, the documentary, titled It’s About Time, looks at pay timing and its correlation with epidemic financial stress being experienced by millions of working Americans.

Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B

The data company MX is set to announce Tuesday an infusion of $100 million from a host of partners, including National Bank of Canada and Washington Federal.

Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B

Arizona’s first real estate crowdfunding company, Neighborhood Ventures, recently closed on its third investment property, an eight-unit apartment building in Old Town Scottsdale. Ninety Arizona residents invested a total of $550,000 into the purchase of the property, which will be renovated with a plan to operate it as an Airbnb.

United Kingdom

Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA

DEUTSCHE Bank has unveiled more details on Funding Circle’s fourth securitisation, revealing it will be the highest-value package of loans it has offered so far.

The investment bank, which has been mandated as sole arranger and lead manager, said the deal will comprise 3,030 loans, with an aggregate balance of £244m and an average interest rate of 9.91 per cent.

FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A

London’s FTSE 250 fell 0.14% lower to 19,260.07 in afternoon trade on Wednesday, with Funding Circle leading the index lower.

The peer-to-peer lending marketplace was accompanied by fellow financial stocks, with Amigo HoldingsCharter Court Financial ServicesPlus500 and Onesavings Bank all featuring among the top fallers.

OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A

OakNorth has completed a £60m loan to Affordable Housing & Healthcare Group (AHH) for the development of three new affordable retirement living schemes.

He said that in retirement he will continue to be a school governor, and that he intended to devote more time to the two charities he is involved with (the other one being Lendwithcare – peer to peer lending to entrepreneurs in a number of Third World countries).

China

Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA

Wu Yujian and Liu Jiefei Dianrong, one of China’s largest peer-to-peer (P2P) lending platforms, said it’s planning a shift in strategy to focus on cooperating with traditional financial institutions as China’s regulators continue to tighten their grip over the industry. The move was revealed on Thursday as the Shanghai-based company confirmed (link in Chinese) it had completed a new

Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A

An intermediate court in Beijing overseeing the Ezubo case said on Wednesday that victims could detail their cases to authorities at local registration sites between July 2 and Aug. 30.

European Union

A very Nordic fintech revolution (Pitchbook), Rated: AAA

Europe is a hotbed of activity when it comes to fintech investments, as the sector continues to mature. Year after year, billions of euros are plowed into promising startups, with last year seeing more than €2.8 billion raised across 438 deals, per the PitchBook Platform.

Below is a list of some of the most innovative fintech companies founded in the Nordics, together with noteworthy investments and backers.

EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A

European lawmakers floated new rules on Wednesday to make it easier for businesses and investors to ask the public to fund their projects, bringing the European Union a step closer to forging a common set of rules for national regulators overseeing crowdfunding.

International

Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA

Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.

How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA

DeFi lending startups are leveraging blockchain to shake-up the traditional money lending industry.

Digital Assets Kept as Collateral

Salt is one company which has been borne out of the cryptocurrency sector.  Through its platform, digital assets are kept as collateral but returned upon repayment of the loan.

Automated P2P Lending Agreements on Blockchain

ETHLend is another DeFi platform built on top of the Ethereum network.  It creates a means for lenders and borrowers from around the world to establish peer to peer lending agreements over blockchain.

Blockchain Catering to the Unbanked in Latin America

A Blockchain-Driven Lending Circle

A completely different approach is being taken by startup, WeTrust.

When it comes to lending, users can establish a ‘lending circle’ on the platform.

Australia

P2P lender expands presence in third-party space (TheAdviser), Rated: AAA

Peer-to-peer lender RateSetter has announced its new partnership with Choice Aggregation Services (Choice), providing accredited brokers with access to the lender’s personal loan offerings.

P2P lender joins aggregator panel (Broker News), Rated: A

The partnership will make RateSetter’s unsecured personal loan product available to Choice Aggregation Service’s network of more than 1,600 brokers, in line with the trend towards servicing a more diverse array of client needs.

Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A

Prospa research has highlighted how lending to small business positively affects the economy through contributing to GDP and creating and supporting jobs.

Data released this week by accounting software firm Xero, analysed invoices from 150,000 Australian SMEs and concluded that 53% of trade credit invoices are paid late by big business suppliers and customers – on average 23 days after their due date. Squeezing SMEs, Xero calculates these late payments are worth $115bn.

Technology boosting financial literacy (Financial Review), Rated: A

Technology will need to play a bigger role in boosting the financial literacy of Australians as a large number of financial planners leave the profession, says Bronny Speed, financial advice leader at Chartered Accountants Australia New Zealand.

Speed says as increased educational and licensing standards for Australia’s 29,000 financial advisors will push some out of the market, it will leave a gap in the profession’s ability to provide financial advice and boost literacy.

India

India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA

Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.

Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A

In today’s age of digitisation, it is all about the customer and improving his/her experience. To achieve this goal, banks and fintech companies have to support each other. This change in the ecosystem has invented the concept of neo banking which can be rightly dubbed as the new era of the banking industry.

Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A

As Budget is about to come in few weeks, it’s time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.

While sharing the budget expectations, he said, ‘Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.

Is fintech reeling under new challenges? (DNA India), Rated: A

The super exciting fintech segment in the start-up ecosystem has been encountering a host of challenges in the recent past. Following a move by the Reserve Bank of India (RBI) to start a regulatory sandbox for the beta-testing of new fintech products in a controlled environment prior to their release, comes the issue of a liquidity crunch in the non-banking finance companies (NBFC) space.

STEADY GAINS

  • Over 1,300 new fintech ventures had cropped up in the sector between 2015 to 2018, according to a data
  • Fintech is a broad sector. It is wrong to connect the NBFC crisis to the whole fintech space
  • For a peer-to-peer (P2P) lending player who is dependent on retail investors for funding loans, maintaining trust is the key challenge
Asia

Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA

Singapore is actively studying whether to allow companies with no banking parentage to set up virtual banks, paving the way for start-ups like on-demand services operator Grab to potentially enter the formal financial services industry.

KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A

KoinWorks announced that it has raised $12 million in a Series B funding round. The round was co-led by EV Growth and Quona Capital, with participation from existing investors. The funding will be used to expand the KoinWorks team and partnerships, as well as further develop the company’s systems and technology.

Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A

The American Chamber of Commerce in Việt Nam (AmCham) expressed its desire for a highly standardised, transparent and stable business environment so all investors are treated equally.

Concerns were also raised by the Korea Chamber of Commerce in Việt Nam (Kocham) and the Japanese Chamber of Commerce and Industry in Việt Nam (JCCI).

The limit of foreign ownership in local financial firms has also prevented fintech and P2P firms from calling for foreign capital, making them unable to hire talent and keeping their businesses less competitive.

PT ALAMI Fintek Sharia (Alami) came in as the runner-up position in the TaqwaTech Pitch Pit organised by Gobi Partners Venture Capital.

Three companies from Indonesia qualified for the top ten, namely Alami, as well as two marketplace startups for pilgrimage services PergiUmroh.com and Umroh.com.

Authors:

George Popescu
Allen Taylor

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

Thursday June 7 2019, Weekly News Digest

economic downturn

News Comments Today’s main news: SoFi completes first rated pass-through certificates offering. Y Combinator backs Monzo for U.S. expansion. Funding Circle set for largest securitization. Dianrong shifts strategy. Funding Circle inks 50M Euro deal with Avida Finans. Open raises $30M. Today’s main analysis: Chance for recession is rising (A MUST-READ PeerIQ analysis). Today’s thought-provoking articles: […]

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

economic downturn

News Comments

United States

United Kingdom

International

China

APAC

News Summary

United States

SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA

SoFi announced today that it completed a $200 million offering of post-graduate student loan asset-backed certificates issued by SoFi Alternative Trust 2019-C (SAT 2019-C). The Certificates are rated single-A by DBRS and mark the first rated pass-through certificate transaction issued by SoFi and the first publicly rated student loan pass-through transaction in the securitization market.

Unlike traditional student loan ABS transactions, SAT 2019-C does not use overcollateralization or bond subordination as forms of credit enhancement.  The A rating assigned to the certificates by DBRS reflects the strong credit attributes of the borrowers. The portfolio has a weighted average credit score of 783 and a weighted average annual income of $175,746.

Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA

Leading US startup backer Y Combinator has become the latest high-profile backer of Monzo, on the eve of the bank’s American expansion.

Today Monzo confirmed it had raised £113m in a round led by Y Combinator’s Continuity fund, along with Latitude, General Catalyst, Stripe, Passion Capital and others.

Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA

Weak economic data continue – inflation expectations tumble, manufacturing has moved into recession, and the 10y/3m yield curve remains mildly inverted. Although the FOMC took no rate action this week, dovish signaling has led market participants to expect a 70% chance of 3 or more rate cuts in 2019.

Source: WSJ, PeerIQ

CPI Since 1879 During Business Cycles

Source: Deutsche Bank, PeerIQ

How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA

Scott Rosenberg: Kabbage represented a great opportunity for me to apply my prior experiences and help architect the future vision of a fast-growing company. Every role in my career has allowed me to lead or influence multiple divisions within a company, which makes my operational approach similar to that of a COO or General Manager. Beyond leading the CFO office in previous roles, I led Marketing at J. Crew, Operations at Pillsbury and most recently was the President of Purchasing Power. This broad vantage point lets me ensure financial growth as the CFO, but also identify opportunities to establish operational efficiencies more broadly across the organization. I take the same approach at Kabbage as I lead multiple disciplines, including Capital Markets and Legal. It encourages transparency across teams which allows us to move faster. With more than 175,000 customers accessing over $7.0 billion to-date, it’s an exciting role to drive hyper growth and deliver the best products and experiences for U.S. small businesses.

According to a survey released today by Kabbage that polled more than 500 companies across multiple industries, 80% of American entrepreneurs said they felt confident in their readiness to weather another economic crisis.

H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A

H&M and Klarna announced that they have expanded their current partnership agreement to also include the US market, in the development of an unrivalled payments and shopping experience across touchpoints. Together, H&M and Klarna are aiming at further integrating H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.

This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A

CrowdStreet, which launched in 2014, is the leading player in the fast-growing field of online commercial real estate investing. The company’s online Marketplace allows individual investors to reap the rewards of investing in the $6 trillion commercial real estate sector, investing in everything from multifamily apartment buildings to self-storage facilities and senior-living centers.

The average return on the first 14 deals financed on CrowdStreet’s platform — those which have fully wrapped up, yielding final returns to investors — is 31.7%, with a 1.6x equity multiple and a holding period of two years.*

MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A

Total student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from passing financial milestones and saving for the future.

Massachusetts Mutual Life Insurance Company (MassMutual) has teamed up with CommonBond to offer a new student loan refinancing program through CommonBond with a rate advantage to help people take control of their student debt. This program – available online to all individuals with student debt today — is among the first of its kind in the student lending and insurance industries. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisors, currently 9,000 strong.

Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A

Ocrolus today announced $24M in Series B funding led by Oak HC/FT, a premier venture growth equity fund with deep fintech expertise. Ocrolus is powered by an elegant blend of artificial intelligence and crowdsourced human quality control, enabling firms across the financial sector to automate high-stakes business processes with precision. The company will use its new funding to automate underwriting workflows for lenders and banks, and expand into new verticals.

How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A


Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A

Forged in the wake of the financial crisis and political movements like Occupy Wall Street, digital advisory firms have become decidedly open about their political agendas. By advocating for the democratization of financial advice and stronger consumer protections, digital investment platforms have become the face of progressive politics in the market. That’s attractive to young investors — assets managed on digital platforms are expected to soar to $1.26 trillion by 2023, according to a report by Aite Group.

Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A

The $1.5 billion-asset bank agreed on Monday to buy Seed for an undisclosed amount. The 5-year-old fintech offers a mobile account for small businesses, complete with bill payment, remote deposit and an attached debit card.

“It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A

Today, PayActiv, Inc., the leader in employer-sponsored, holistic financial wellness service for employees, unveiled its documentary made in collaboration with Early Light Media and Roundtable Companies about the direct benefits of timely earned wage access. Now available at ItsAboutTimeTheFilm.com, the documentary, titled It’s About Time, looks at pay timing and its correlation with epidemic financial stress being experienced by millions of working Americans.

Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B

The data company MX is set to announce Tuesday an infusion of $100 million from a host of partners, including National Bank of Canada and Washington Federal.

Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B

Arizona’s first real estate crowdfunding company, Neighborhood Ventures, recently closed on its third investment property, an eight-unit apartment building in Old Town Scottsdale. Ninety Arizona residents invested a total of $550,000 into the purchase of the property, which will be renovated with a plan to operate it as an Airbnb.

United Kingdom

Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA

DEUTSCHE Bank has unveiled more details on Funding Circle’s fourth securitisation, revealing it will be the highest-value package of loans it has offered so far.

The investment bank, which has been mandated as sole arranger and lead manager, said the deal will comprise 3,030 loans, with an aggregate balance of £244m and an average interest rate of 9.91 per cent.

FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A

London’s FTSE 250 fell 0.14% lower to 19,260.07 in afternoon trade on Wednesday, with Funding Circle leading the index lower.

The peer-to-peer lending marketplace was accompanied by fellow financial stocks, with Amigo HoldingsCharter Court Financial ServicesPlus500 and Onesavings Bank all featuring among the top fallers.

OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A

OakNorth has completed a £60m loan to Affordable Housing & Healthcare Group (AHH) for the development of three new affordable retirement living schemes.

He said that in retirement he will continue to be a school governor, and that he intended to devote more time to the two charities he is involved with (the other one being Lendwithcare – peer to peer lending to entrepreneurs in a number of Third World countries).

China

Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA

Wu Yujian and Liu Jiefei Dianrong, one of China’s largest peer-to-peer (P2P) lending platforms, said it’s planning a shift in strategy to focus on cooperating with traditional financial institutions as China’s regulators continue to tighten their grip over the industry. The move was revealed on Thursday as the Shanghai-based company confirmed (link in Chinese) it had completed a new

Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A

An intermediate court in Beijing overseeing the Ezubo case said on Wednesday that victims could detail their cases to authorities at local registration sites between July 2 and Aug. 30.

European Union

A very Nordic fintech revolution (Pitchbook), Rated: AAA

Europe is a hotbed of activity when it comes to fintech investments, as the sector continues to mature. Year after year, billions of euros are plowed into promising startups, with last year seeing more than €2.8 billion raised across 438 deals, per the PitchBook Platform.

Below is a list of some of the most innovative fintech companies founded in the Nordics, together with noteworthy investments and backers.

EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A

European lawmakers floated new rules on Wednesday to make it easier for businesses and investors to ask the public to fund their projects, bringing the European Union a step closer to forging a common set of rules for national regulators overseeing crowdfunding.

International

Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA

Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.

How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA

DeFi lending startups are leveraging blockchain to shake-up the traditional money lending industry.

Digital Assets Kept as Collateral

Salt is one company which has been borne out of the cryptocurrency sector.  Through its platform, digital assets are kept as collateral but returned upon repayment of the loan.

Automated P2P Lending Agreements on Blockchain

ETHLend is another DeFi platform built on top of the Ethereum network.  It creates a means for lenders and borrowers from around the world to establish peer to peer lending agreements over blockchain.

Blockchain Catering to the Unbanked in Latin America

A Blockchain-Driven Lending Circle

A completely different approach is being taken by startup, WeTrust.

When it comes to lending, users can establish a ‘lending circle’ on the platform.

Australia

P2P lender expands presence in third-party space (TheAdviser), Rated: AAA

Peer-to-peer lender RateSetter has announced its new partnership with Choice Aggregation Services (Choice), providing accredited brokers with access to the lender’s personal loan offerings.

P2P lender joins aggregator panel (Broker News), Rated: A

The partnership will make RateSetter’s unsecured personal loan product available to Choice Aggregation Service’s network of more than 1,600 brokers, in line with the trend towards servicing a more diverse array of client needs.

Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A

Prospa research has highlighted how lending to small business positively affects the economy through contributing to GDP and creating and supporting jobs.

Data released this week by accounting software firm Xero, analysed invoices from 150,000 Australian SMEs and concluded that 53% of trade credit invoices are paid late by big business suppliers and customers – on average 23 days after their due date. Squeezing SMEs, Xero calculates these late payments are worth $115bn.

Technology boosting financial literacy (Financial Review), Rated: A

Technology will need to play a bigger role in boosting the financial literacy of Australians as a large number of financial planners leave the profession, says Bronny Speed, financial advice leader at Chartered Accountants Australia New Zealand.

Speed says as increased educational and licensing standards for Australia’s 29,000 financial advisors will push some out of the market, it will leave a gap in the profession’s ability to provide financial advice and boost literacy.

India

India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA

Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.

Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A

In today’s age of digitisation, it is all about the customer and improving his/her experience. To achieve this goal, banks and fintech companies have to support each other. This change in the ecosystem has invented the concept of neo banking which can be rightly dubbed as the new era of the banking industry.

Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A

As Budget is about to come in few weeks, it’s time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.

While sharing the budget expectations, he said, ‘Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.

Is fintech reeling under new challenges? (DNA India), Rated: A

The super exciting fintech segment in the start-up ecosystem has been encountering a host of challenges in the recent past. Following a move by the Reserve Bank of India (RBI) to start a regulatory sandbox for the beta-testing of new fintech products in a controlled environment prior to their release, comes the issue of a liquidity crunch in the non-banking finance companies (NBFC) space.

STEADY GAINS

  • Over 1,300 new fintech ventures had cropped up in the sector between 2015 to 2018, according to a data
  • Fintech is a broad sector. It is wrong to connect the NBFC crisis to the whole fintech space
  • For a peer-to-peer (P2P) lending player who is dependent on retail investors for funding loans, maintaining trust is the key challenge
Asia

Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA

Singapore is actively studying whether to allow companies with no banking parentage to set up virtual banks, paving the way for start-ups like on-demand services operator Grab to potentially enter the formal financial services industry.

KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A

KoinWorks announced that it has raised $12 million in a Series B funding round. The round was co-led by EV Growth and Quona Capital, with participation from existing investors. The funding will be used to expand the KoinWorks team and partnerships, as well as further develop the company’s systems and technology.

Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A

The American Chamber of Commerce in Việt Nam (AmCham) expressed its desire for a highly standardised, transparent and stable business environment so all investors are treated equally.

Concerns were also raised by the Korea Chamber of Commerce in Việt Nam (Kocham) and the Japanese Chamber of Commerce and Industry in Việt Nam (JCCI).

The limit of foreign ownership in local financial firms has also prevented fintech and P2P firms from calling for foreign capital, making them unable to hire talent and keeping their businesses less competitive.

PT ALAMI Fintek Sharia (Alami) came in as the runner-up position in the TaqwaTech Pitch Pit organised by Gobi Partners Venture Capital.

Three companies from Indonesia qualified for the top ten, namely Alami, as well as two marketplace startups for pilgrimage services PergiUmroh.com and Umroh.com.

Authors:

George Popescu
Allen Taylor

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

Friday April 27 2018, Daily News Digest

Canada investments

News Comments Today’s main news: Kabbage buys Orchard.Ascentium Capital issues $330M securitization.LendingTree reports record Q1 results.Funding Circle issues second MPL deal.Revolut raises $250M, achieves unicorn status.BBVA issues first blockchain loan from a global bank.IOU Financial releases 2017 results. Today’s main analysis: Canadian fintech funding declines 60 percent in Q1. Today’s thought-provoking articles: Where the oldest […]

Canada investments

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United Kingdom

European Union

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United States

It’s Official: Kabbage To Acquire Orchard (Lend Academy) Rated: AAA

It was the worst kept secret in fintech. There were rumors flying around during LendIt Fintech earlier this month and then Bloomberg published this story a couple of weeks ago about the pending deal. Well, today it became official. In a press release this morning it was confirmed that Kabbage, the tech-focused small business lender, will acquire Orchard.

So, what will become of Matt Burton and his team? Some clues are provided in the press release:

Orchard’s CEO and co-founder, Matt Burton, as well as Chief Analytics Officer and co-founder, David Snitkof, will both join Kabbage in leadership roles upon the closing, helping oversee technology integrations and future innovations. In total, Kabbage will add more than twenty Orchard employees who are predominantly focused on advanced analytics, data science and engineering to its New York City office.

Kabbage plan in Orchard deal: Expand offerings to banks, small businesses (American Banker) Rated: A

Kathryn Petralia, president and co-founder of Kabbage, said the acquisition will help the company diversify its business and offer more data-driven services to small businesses and financial institutions. It currently works with ING, Santander and Scotia Bank. Kabbage’s U.S.-based loans are issued by Celtic Bank in Salt Lake City.

The Orchard name will not survive. “At closing we will be Kabbage,” Burton said.

Until now, Orchard has been providing loan and portfolio analysis to other online lenders. This business model will be discontinued and those relationships will most likely end. Orchard’s current clients are being told about its sale to Kabbage, Burton said.

Ascentium Capital Announces $ 330 Million Securitization (Ascentium) Rated: AAA

Ascentium Capital issued a $330 million small ticket equipment securitization of Ascentium Equipment Receivables 2018-1 Trust.

This represents the company’s ninth securitization since 2012 and the first time a non-investment grade, independent equipment finance company received triple AAA and Aaa ratings from both Standard & Poor’s and Moody’s.

LendingTree Reports Record 1Q 2018 Results (Markets Insider) Rated: AAA

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com today announced results for the quarter ended March 31, 2018.

First Quarter 2018 Business Highlights

  • Revenue from mortgage products of $73.5 million represents an increase of 17% over first quarter 2017 driven by strong growth in both purchase and refinance revenues at 13% and 18%, respectively.  According to Mortgage Bankers Association, originations industry-wide were projected down 4% in the comparable period.
  • Record revenue from non-mortgage products of $107.6 million in the first quarter represents an increase of 55% over the first quarter 2017.
  • Revenue from our credit card offerings continued its momentum, growing to $46.1 million in 1Q, up 36% over the first quarter 2017.
  • Personal loans revenue of $26.0 million grew 53% over first quarter 2017.
  • Home equity revenue continued to climb, growing 81% over first quarter 2017.
  • More than 8.0 million consumers have now signed up for free credit scores and savings alerts through My LendingTree.  Revenue contribution from MyLendingTree grew 76% in the first quarter compared to the prior year period as new features, such as Credit Analyzer and free credit monitoring, are driving increased engagement.

LendingTree Study Reveals Which Places Buy the Oldest Used Cars (PR Newswire) Rated: AAA

LendingTree today released the findings of its study on the places that buy the oldest used cars. LendingTree analyzed auto loan offers for borrowers in the top 50 U.S. metros (based on population) to find the average age of used cars financed in each metro, as well as which makes of used cars were most popular.

The national average age of a used car people sought to finance was six years old, but some parts of the country prefer older used cars more than others.

Source: Lending Tree

Mobile Banking One of Top Three Most Used Apps by Americans, 2018 Citi Mobile Banking Study Reveals (Citigroup) Rated: AAA

Apps for mobile banking have become some of the most widely used by Americans, according to Citi’s 2018 Mobile Banking Study, released today. The survey of 2,000 U.S. adults found that, measured by top two ranked responses, 31 percent of consumers use their mobile banking app the most, behind only apps for social media (55 percent) and the weather (33 percent).

“Over the past year we’ve witnessed this increase in engagement first-hand, with mobile usage in North America increasing by almost 25 percent, and we don’t see this trend slowing down any time soon.”

LendingClub was sued for the fees it charges — how you can avoid being overcharged (Market Watch) Rated: A

Pay attention to both the interest rate advertised, as well as the annual percentage rate (APR), Clements said. If they’re different, the lender is likely factoring additional fees into your annual percentage rate.

You may need to borrow more money than you expected if that’s the case, he said, because the total amount you would receive will be less than you asked for.

Research several lenders before choosing which one you want, he said. And if there are any unfamiliar terms, or any confusion about how much you’ll pay back monthly, ask.

Digital bank in a box: Fintech offers branding tool (American Banker) Rated: A

The core systems provider Nymbus is offering a new product for bank customers that want to get in on the burgeoning trend of having a stand-alone, digital brand.

Dubbed SmartLaunch, the offering enables financial institutions to create a digital brand under their existing charter in as little as 90 days, according to Nymbus. The product is built on Nymbus’ cloud-based SmartCore platform, and the company says it provides banks that use the service with all outsourced operational and technological requirements to run the digital bank. Also included are client support, digital marketing and website services.

Source: American Banker

RealtyMogul and Comunidad Realty Partners Close $ 30 Million in Texas Multifamily Properties (Citizen Tribune) Rated: A

RealtyMogul, a pioneer in providing private real estate to discerning investors, announced that MogulREIT II, its real estate investment trust or “REIT,” has completed investments in multifamily apartment complexes in Fort Worth, Texas and San Antonio, Texas, consisting of over 450 units.

The properties were acquired through a partnership with Comunidad Realty Partners, a dynamic real estate investment firm specializing in workforce housing communities in culturally diverse neighborhoods.

Scaling Real Estate Crowdfunding: PeerStreet Establishes a Culture of Excellence at the Top (Crowdfund Insider) Rated: A

Loans on PeerStreet are sourced and curated from vetted private lenders throughout the United States. These lenders have real estate expertise and established borrower relationships. To date, PeerStreet has helped to finance over $900 million in loans by using this partnership approach. The properties they help finance are typically smaller in value – a segment of the industry that is usually overlooked by big institutional money. Loans range from 6 to 24 months and are first lien so investors have a good degree of security.  Most of the loans are below a loan to value of 75%. About a year ago, PeerStreet announced having funded $300 million in loans. In less than 12 months, PeerStreet has funded double that number.

PeerStreet is doing small loans commercial, some multi family and mixed used properties. The largest loan size is around $5 million but there can be exceptions. The rate of return for investors during 2017 stood, on average, at 8% net of fees. As for defaults, so far only five loans have gone into foreclosure but they have not experienced any loss of principle – a positive metric.

Citizens Bank Taps Finastra and Infosys for Trade Finance Solution (Citizens Bank) Rated: A

Citizens Bank, working with Infosys as its implementation partner, has selected Finastra to power the trade finance solution it offers to its corporate clients. This new capability will enable Citizens’ corporate clients to digitize traditionally paper-based trade processes, leading to increased efficiencies and reduced costs.

The new trade finance offering will allow the bank to meet increased client demand. Citizens picked Finastra’s Fusion Trade Innovation for its end-user experience, ability to support all trade products, capacity to integrate with downstream systems through open APIs and its high level of configurability.

Consumers in Columbus less likely to put fraud alerts on their credit reports (The Columbus Dispatch) Rated: A

However, a new study finds that consumers in the biggest Midwest cities, including Columbus, are much less likely to put alerts on their credit reports than those in other cities, such as Las Vegas, Houston, Miami and New York. The study by online lender Lending Tree was based on a random sample.

US banks to get more freedom to offer unsecured loans (Financial Times) Rated: B

Joseph Otting, Comptroller of the Currency, said he believed standards should be relaxed to allow banks back into the small dollar loan market; loans would range from $500 to $5,000 and be paid back in 45 and 90 days; right now payday lenders dominate this space and typically take advantage of borrowers by charging high fees and rolling over the principal; allowing banks back into the market will help to bring more regulation and cut down on abuses.

Growth plans: Both big and small banks set to expand locally (Orlando Business Journal) Rated: B

David Stahl, senior vice president, SunTrust Bank: We acquired an online lender called LightStream two years ago, and that has been a huge opportunity for us. The days of people walking into a bank and applying for a loan are pretty much gone.

Free Research Reports on These Credit Services Stocks — MoneyGram, Navient, Oaktree Specialty Lending and On Deck Capital (PR Newswire) Rated: B

This morning, WallStEquities.com observes MoneyGram International Inc. (NASDAQ: MGI), Navient Corp. (NASDAQ: NAVI), Oaktree Specialty Lending Corp. (NASDAQ: OCSL), and On Deck Capital Inc. (NYSE: ONDK). Credit Services companies originate, acquire, and service loans to individuals and corporations. Their products include student loans, mortgages, lines of credit, private equity, and venture capital. All you have to do is sign up today for this free limited time offer by clicking www.wallstequities.com/registration

Covr Financial Technologies appoints Chris Growney to Board of Directors; Gregory Fleming and Robert Kerzner, join Covr’s Advisory Board (PR Newswire) Rated: B

Covr Financial Technologies, a digital, multi-carrier life insurance platform for financial institutions, announced that Chris Growney, an advisor with venture capital and advisory firm Nyca Partners has joined Covr’s Board of Directors following Nyca’s role in Covr’s June, 2017 fundraising. Growney, a director, advisor and investor in a broad range of start-up and growth companies was most recently the founder of Clearwater Analytics, an investment analytics and accounting software company based in Boise, Idaho.

6th Avenue Capital Announces Promotion of Darren Schulman to President (deBanked) Rated: B

6th Avenue Capital, LLC (“6th Avenue Capital”) announced today the promotion of Darren Schulman to President, effective immediately. In his new position, Schulman has oversight over originations, underwriting, operations, collections and strategic initiatives. He previously served as Chief Operating Officer, and will continue to report directly to Chief Executive Officer Christine Chang.

The company also announced today that Chang and Schulman have been appointed to the company’s Board of Directors.

Best Egg Teams with Junior Achievement of Delaware on Financial Education Initiatives (Business Wire) Rated: B

Best Egg, the consumer lending brand of Marlette Funding, LLC, is providing both classroom education and other inspiring financially-related activities for Junior Achievement of Delaware (JA of DE). This announcement coincides with National Financial Literacy Month, being celebrated throughout the month of April.

United Kingdom

Funding Circle brings second marketplace loan deal (Global Capital) Rated: AAA

Sole arranger and lead manager Deutsche Bank announced Thursday a £207m UK SME securitization from Funding Circle, Small Business Loan Origination Trust 2018-1, the second ABS offering from the online lender.

In addition to being just the second deal from Funding Circle, and the third European marketplace loan ABS overall, SBOLT 2018-1 marks the first time Kroll Bond Rating Agency has assigned a public rating for a European securitization deal.

KBRA Europe Assigns Preliminary Ratings to Small Business Origination Loan Trust 2018-1 DAC (Business Wire) Rated: A

Kroll Bond Rating Agency Europe Limited (KBRA) has assigned preliminary ratings to four classes of notes (“Rated Notes”) issued by Small Business Origination Loan Trust 2018-1 DAC (“SBOLT 2018-1”). This is a £206.6 million ABS transaction collateralised by unsecured loans made to small and medium-sized enterprises (“SMEs”) incorporated in the United Kingdom (“UK”).

This transaction represents the second ABS securitisation collateralised by unsecured loans to SMEs originated through the online lending platform operated by Funding Circle Limited (“Funding Circle”), and the first European rated ABS securitisation for KBRA.

Source: Business Wire

Confirmation of that came on Thursday as Revolut became the first of Britain’s digital-only banks to achieve “unicorn” status – in other words, a privately held start-up company with a valuation of more than $1bn (£720m).

Revolut, which was only founded in July 2015, has been valued at $1.7bn (£1.22bn) in its latest funding round.

The bank, which started out as a currency exchange app but later moved into providing personal banking and cryptocurrency trading services, raised $250m (£180m) from backers including DST Global, an investment firm backed by the Russian billionaire Yuri Milner, whose previous early-stage tech investments have included Facebook, Twitter, Airbnb and Spotify.

Ranger Direct Lending rejects investor call to wind up (City Wire) Rated: A

Ranger Direct Lending (RDL) has criticised shareholder Oaktree Capital Management for trying to force the struggling alternative income fund to wind up.

Oaktree, the second largest shareholder in the fund that invests in and through lending platforms, has made public its correspondence with Ranger, which it described as a ‘sub-scale platform’ with shares ‘too illiquid to attract large institutional investors, especially in light of its persistent trading discount to net asset value (NAV)’.

Goji passes £50m in assets (Goji) Rated: A

Goji has now got more than £50m of assets on its platform a little over a year after opening its doors to investors.  With over 5,000 customer accounts, our hard earned growth is testament to the work the whole industry has done in selling the asset class to the UK public.

After campaigning hard to change the tax laws to open up the ISA rules so that non-lending platforms could also offer an IFISA, Goji was the first firm to offer investors diversification across a number of platforms through a single Innovative Finance ISA.  Goji’s Diversified Lending Bonds target 5%, whilst it’s Renewables Lending Bond targets returns in excess of 8%.

A lending site where you can rent anything just scored millions in venture capital (Business Insider) Rated: A

Fat Lama, which announced $10 million in its Series A on Wednesday in a round led by Blossom Capital, says it will use its latest funding to further its reach within the US and to create a mobile-first offering (so far, the site’s mobile app is only available in the UK).

Fat Lama lets users borrow everything from drones to camera equipment to printers.

The site insures any item listed on its site for up to $30,000, and Englander said his company has plans to raise that amount to $50,000 in the near future.

 

 

Artificial intelligence backed to reduce P2P defaults (Peer2Peer Finance) Rated: A

ARTIFICIAL intelligence (AI) could provide peer-to-peer lenders with greater lending security and less chance of defaults, a technology consultancy claims.

Nick Parham, technical pre-sales consultant at NashTech, said there is much P2P platforms can learn about AI from traditional lenders.

“The traditional lending market offers us a powerful insight into the potential for AI in P2P lending,” he said.

TURNING TO YOUR PEERS (BQ Live) Rated: A

They created ArchOver, a peer-to-peer (P2P) lending platform that allows firms that have been operating for more than two years to borrow money from lenders using its website. Companies borrow a minimum of £250,000, with interest rates starting at 7.7% a year.

Since it launched in the autumn of 2014, ArchOver has helped its lenders to inject more than £65m into British businesses, bringing in more than £2.5m in interest at an average return of 7.3%. In an age when bank savings accounts are paying less than 0.5%, it’s easy to see the attraction for investors who understand the risks as well as the rewards.

European Union

Klarna integrates with Magento for streamlined checkout (Payments Source) Rated: AAA

Commerce platform Magento is giving merchants the option to activate Klarna instant credit for online checkouts.

Sweden-based Klarna is built into the latest version of Magento Commerce, giving merchants a streamlined path to offer goods consumers may opt to pay for immediately, within 30 days, or longer via installments, Klarna said in a Thursday press release.

Taaleri increases its ownership in Fellow Finance by 7.3 per cent (Globe Newswire) Rated: A

Taaleri Plc has decided to exercise its option to acquire an additional 7.3% holding in Fellow Finance Oy, as outlined in the shareholders’ agreement signed in 2015. After the transaction Taaleri’s shareholding in Fellow Finance, which offers a crowdfunding platform for companies and for consumers, will increase to 45.7%. The transaction is scheduled to be realized in April-May.

International

BBVA and Indra deliver the world’s first blockchain-supported corporate loan (BBVA) Rated: AAA

BBVA has successfully completed the first global corporate loan transaction using blockchain technology from the negotiation of the deal to its signing, in line with their close collaboration to leverage cutting-edge technologies to streamline business processes.

The pilot enabled the closing of a €75 million loan using a solution developed by BBVA based on distributed ledger technology (DLT). This demonstrates how BBVA continues to incorporate innovative and disruptive technology into its customer solutions, including those products that up to now have seen limited digital innovation, as is the case with wholesale finance.

BANKS VS FINTECHS: THE WAR FOR TALENT (International Banker) Rated: A

Many of these start-ups, moreover, are equipped with enough cash to be able to compete with their banking counterparts on salaries. According to assessments by recruitment site Glassdoor, for example, a London-based software engineer at online lender Funding Circle will earn a base salary of £51,000 on average, which is equal to the salary paid at Goldman Sachs for a similar role. At UBS, that figure is £59,000, while at challenger Monzo Bank it is currently £64,000. Speaking recently to Bloomberg, co-founder and CEO of property lending platform LendInvest, Christian Faes, asserted that between 30 and 40 percent of the company’s hires are from major financial institutions, while banks also account for 100 percent of its small-risk and compliance team. Similar trends are also being reported by UK online lender MarketInvoice Ltd., where three-quarters of its 85 employees have come from either the financial-services or accountancy space.

Source: International Banker

Deserve Raises $ 50 Million in Debt Financing (Finovate) Rated: A

In rebranding his company from SelfScore to Deserve, CEO Kalpesh Kapadia explained “we believe that access is everything and everyone deserves a chance to build a positive credit history. So we are making our products available to all students, U.S., and international, and to all those who seek to build and/or maintain a good credit history.”

And now Deserve is $50 million closer to serving this broader population of potential customers. The Accel-backed fintech has just secured a $50 million debt facility from Keystone National Group to drive growth in account receivables and help “jumpstart” first-time credit owners’ financial journeys.

 

Fintech for the Financially Excluded? (Stanford Social Innovation Review) Rated: A

At Bamboo Capital Partners, we believe fintech can help low-income people reduce vulnerabilities, build assets, manage cash flow, and increase income, and we have invested as such: In the last couple of years, we have made four equity investments in fintech companies in Colombia, Mexico, Chile, and Tanzania, committing more than $16 million. Our investees are helping democratize access to finance through peer-to-peer lending platforms (KuboFinanciero), promoting access to insurance (ComparaOnline), enabling mobile payments and savings for low-income people through nano deposits (Movii), and providing a smart data platform for emerging market financial institutions (First Access).

APAC

Game-changing technologies at work in Asia Pacific’s real estate (JLL) Rated: AAA

Singapore-based mall operator Capitaland has a chatbot called Sparkle on its app that responds to shoppers’ queries and make reservations or hail a ride from its malls.  National Australia Bank is participating in a A$9 million investment round for real estate crowdfunding platform Brick X.

The rise of proptech, however, could be a cause for cybersecurity concerns, as highlighted in JLL’s report Clicks and Mortar: The Growing Influence of Proptech.

Source: Jill Real Views

 

Coast Labor MP Calls For Ban On Loan Machines (TripleM Network) Rated: A

There are calls for the Berejiklian Government to outright ban payday loan machines cropping up on the Central Coast.

There’s a Cash N Go kiosk at Wyoming offering up to $1000 at a time with minimal checks, while the devices, which look like ATMs, have also been spotted in the Hunter and Illawarra.

Latin America

Brazil’s Central Bank authorizes peer-to-peer lending (Rueters) Rated: AAA

Brazil’s Central Bank on Thursday released rules for credit start-ups that include authorization for peer-to-peer lending, as a way to increase competition in loans in a country with notoriously high interest rates for consumers.

Credit fintechs will be allowed to operate with a minimum capital of 1 million reais ($288,000), according to the new regulation. Peer-to peer lending had not yet been formally authorized in the country. The practice involves lending between individuals through online services.

Canada

Funding for Canadian Fintech Companies Declines 60 Percent in Q1 (Investing News) Rated: AAA

Canadian fintech companies received $88 million in investment over the first quarter of 2018, representing a 60-percent decline, says a new report from PwC.

Total investment in Canada in the first quarter of 2018 was over $1 billion, which is a 52-percent increase over the last quarter. A total of 105 deals were signed as compared to 81 in the previous quarter, representing a 30-percent increase.

Source: PwC

Read the full report here.

IOU Financial Inc. Releases Financial Results for the Year Ended December 31, 2017 (Benzinga) Rated: AAA

IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV:IOU) announced today its results for the year ended December 31, 2017.

  • Reached profitability during the year with positive adjusted net earnings of $0.1 millionin Q4.
  • Surpassed the half-billion loan origination mark with loan originations of $91.3 million(US) for the year.
  • Increased interest revenue of 8.1% to $14.4 million for the year ended December 31, 2017 vs 2016.
  • Reduced operating costs (excluding non-recurring costs) by 20.3% to $9.0 million for the year ended 2017.
  • Raised $3.5 million via a private placement.

BlackChain Solutions Signs LOI With DMG Blockchain Solutions to Bring P2P Lending to the Cryptocurrency Market (Investing News) Rated: B

Under the proposed license, BlackChain will retain exclusive rights for use of the technology for P2P Lending. DMG will be entitled to a royalty on commercial revenues generated by Blackchain using the technology. The parties intend to negotiate and finalize a definitive agreement by May 15th, 2018.

 

MENA

Global REIT’s crypto-powered real estate investment model will be first of it’s kind… (Global Cryptocurrency Press) Rated: AAA

Moving this structure onto the blockchain, and powering the investments with cryptocurrency now means the average cryptocurrency investor can easily access the real estate investment market. Global REIT will begin in their home of Dubai, a place where real estate is currently exploding, and acquire assets within the U.A.E, before branching out globally.

Authors:

George Popescu
Allen Taylor

Monday March 19 2018, Daily News Digest

Monday March 19 2018, Daily News Digest

News Comments Today’s main news: Robinhood valuation tops $5B. MarketInvoice reaches 2B GBP milestone. Lendy reaches 20K investors. Senmiao Technology prices IPO at low end. Merchant Advance Capital closes $30M debt facility. Today’s main analysis: CLUB 2018-NP1 Deep Dive. Today’s thought-provoking articles: Helena, Montana wants to be tech talent destination. More SMEs plan to apply for finance. The third age of credit. Australian […]

Monday March 19 2018, Daily News Digest

News Comments

United States

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China

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United States

Valuation for Robinhood, Maker of App That Offers Free Stock Trades, Tops $ 5 Billion (Wall Street Journal), Rated: AAA

Robinhood Markets Inc. is set to be valued at about $5.6 billion in a new funding round, according to people familiar with the matter, a fourfold increase in just one year that reflects the stock-trading app’s soaring popularity among millennials.

The Silicon Valley startup is in the final stages of securing around $350 million from a group of investors led by Russian firm DST Global, according to the people familiar with the fundraising.

Helena, Montana wants to be a new destination for engineers after landing a SoFi office (VentureBeat), Rated: AAA

With a population of slightly more than 31,000, Helena is one of the country’s smallest state capitals. It’s not surprising, given that the entire state of Montana is home to only 1 million people. In addition to being tiny, Helena is also incredibly remote. The closest large metropolitan areas are Salt Lake City and Seattle, which are both nearly 500 miles away.

Those qualities shouldn’t make Helena a candidate to house a large engineering team for one of Silicon Valley’s most valuable unicorns. However, SoFi, the online personal finance company focusing on student loans, mortgages, and personal loans, has multiple locations in the city that together house roughly 140 employees — many of them programmers and engineers, as I learned on a trip last month to Helena.

Amazon’s footprint grows, CLUB 2018-NP1 Deep Dive (Peer IQ), Rated: AAA

Amazon continued its foray into the lending sector this week by offering a a robo advisor. Amazon is partnering with banks where they lack a clear regulatory swim lane.

CLUB 2018-NP1

Source: Peer IQ

This is the largest near-prime deal that has been issued so far. The deal has 8,237 loans more than the CLUB 2017-NP2 deal and the average loan balance is $422 lower. The weighted average FICO on LC’s near-prime deals is 639, lower than that on AVNT 2017-B.

Source: Peer IQ

Kushners’ Cadre Startup Benefited From Misleading Rent Filings (Bloomberg), Rated: A

Cadre owned about 60 percent of three rent-regulated buildings in Queens sold by Kushner Cos. in April 2017. The $59 million price tag was an 80 percent premium over what they paid in January 2015, property records in New York show. It was the first known deal that Cadre, then a fledgling company, took from purchase to sale, and the high rate of return in a short time was touted as a proof-of-concept for its web-based investing platform.

Kushner Cos., Cadre’s operating partner at the properties, told the city the buildings had no rent-regulated tenants when applying for construction permits to update the buildings in 2015 but tax records filed later showed almost 100 such residents, according to a report by the Associated Press. The number of tenants fell precipitously prior to the buildings’ sale, the wire service reported.

 

U.S. Appeals Court Voids Obama-Era ‘Fiduciary Rule’(Financial Advisor), Rated A

A federal appeals court on Thursday voided the U.S. Department of Labor’s “fiduciary rule,” an Obama administration measure adopted in 2016 meant to curb conflicts of interest among providers of financial advice to Americans planning for retirement.

Study Finds Link Between Payday Loans, Poor Health (LendEDU), Rated: A

A new study has disclosed that almost 40 percent of people seeking short-term, high-interest loans from lenders such as payday loan companies are likely to report their health as either fair or poor.

Short-term loans have grown from a $10 billion industry in 1998 to $48 billion in 2011, reported The Guardian. Interest is extremely high on these loans—up to 600 percent per year—and the funds, typically utilized by low-income borrowers, are used for necessities including car repairs, food, and rent, according to the study.

Short-term loans have grown from a $10 billion industry in 1998 to $48 billion in 2011, reported The Guardian.

How Citizens Bank is reaching millennials (Tearsheet), Rated: A

Citizens Bank is selling millennials a comfortable, enjoyable life of travel, adventure and everything short of avocado toast in an effort to grow its student loan refinancing business.

At the end of 2017, Citizens’ student loan book was valued at $8.1 billion, according to the company. It’s a space which startups have forged a path, with CommonBond funding $1.5 billion loans since it was founded in 2012, and the value of SoFi’s student loan originations at $14 billion. Still, banks have unique advantages when it comes to the student loan refinance market, like a strong resource base to invest in marketing, and a book of business based on deposit products that lowers their costs.

Goldman Sachs launches in-house incubator (Tearsheet), Rated: A

Goldman Sachs has launched an in-house incubator to allow its employees to bring innovative ideas and solutions to life, and to Goldman.

GS Accelerate is accepting applications for “ideas that can deliver best-in-class solutions for our clients, take Goldman Sachs into new business areas, manage risk and tackle inefficiencies in our operations,” according to an executive memo sent to staff Thursday and shared with Tearsheet. Goldman declined to comment further.

Developing The Application of Anti-fraud Technology to Enhance Financial Risk Management (Lendit), Rated: A

With the maturity of the underlying technologies such as artificial intelligence and blockchain, the manual driven anti-fraud method will be closely integrated with artificial intelligence driven anti-fraud method by incorporating the online and offline scenarios, constantly and quickly generating a surge in innovative strategies from the previous unidirectional and inefficient strategy.

The current application of anti-fraud technology is a rule engine driven approach, that is, it can detect the problems when the frauds are triggered but cannot predict and warn in the early stage. By accumulating and studying the data of fraudulent activities and developing the new cyber technology, the application of anti-fraud technology is expected to be turn from passive investigation into active pre-warning to build up the first firewall of anti-fraud. Adding intervention techniques out of the rule engine, such as neural network technology, will help to improve the pre-warning mechanism.

Bank Fintech Partnership More Than Just a Good Idea (Lendit), Rated: A

Bank customers demand highly functioning and seamless digital experiences.  They expect easy loan application processes that minimize data entry and turn around decision and funding in session-time.  They expect configurable communications, inbound and outbound, via the channel of their choosing and on the cadence of their choosing.  They expect to conduct every possible interaction, including account opening, without being require to walk into a branch.  They crave AI-driven advice and AI-fueled interaction channels.  With mobile payment processes, remote deposit capture, 24/7 access and service, and high degrees of security all to boot.

While it is possible to develop these capabilities in house, the best solutions already exist, developed by fintech providers who are ready to partner with the bank.

Blake Cohen of SALT Lending (Lending Academy), Rated: A

In this podcast you will learn:

  • How Blake first got involved with blockchain and bitcoin.
  • The conversation that led to the founding of SALT Lending.
  • The outcome of his conversations with banks around accepting bitcoin as collateral.
  • How they discovered there would be demand for their proposed lending service.
  • Why they decided to sell discounted memberships instead of doing an ICO.
  • Why anybody who is holding cryptocurrency instantly understands their value proposition.
  • How much membership tokens, known as SALT tokens, cost.
  • The total amount of loan demand they have received to date.
  • How the process works when taking out a loan.
  • The loan products they are offering today.
  • How their margin calls work.
  • Why they do no credit checks on their borrowers.
  • How loans are getting funded today and their plans for the future here.
  • How the volatility in the price of cryptocurrencies has impacted their business.
  • The vision for the future of SALT lending.

Best Online Checking Accounts (Benzinga), Rated: A

Online checking accounts are different from regular checking accounts at your bank/credit union and the number one reason they’re different is that they’re from banks that forgo a traditional branch structure. Ally Bank is a great example of this type of online-only option.

Best for no monthly fees: Capital One 360 Online Checking Account
Best for hIgh APY: Consumers Credit Union Free Rewards Checking
Best for no deposit minimum: Ally Interest Checking
Best business online checking account: EverBank Business Checking

Lendio announces South Charlotte franchise (Bankless Times), Rated: B

Small business loan marketplace Lendio this week opened a franchise in Charlotte, North Carolina. Through the Lendio franchise program, Chris Cronk will help local businesses in the community apply for loans, review their options and secure funding.

OnDeck Names Diamond Janitorial Services as Small Business Of the Month (PR Newwire), Rated: B

OnDeck (NYSE: ONDK), the leader in online lending to small business, today announced that Diamond Janitorial Services has been selected as the OnDeck Small Business of the Month for March, 2018.

 

Government Lifts Prohibition on Payday Lending Chain’s Partnership With National Banks (WSJ), Rated: B

The Office of the Comptroller of the Currency has lifted a prohibition on partnerships between payday loan chain ACE Cash Express Inc. and national banks, as the agency’s Trump-appointed head, Joseph Otting, is encouraging financial institutions to offer more small-dollar consumer loans.

The OCC rescinded a 2002 consent order that restricted ACE’s ability to offer payday loans funded by nationally chartered banks.

Private equity firms buying real estate data and software provider EDR for $ 205 million (Housingwire), Rated: B

Two prominent private equity firms are buying EDR, a provider of real estate data and software-as-a-service, for $205 million, the companies announced earlier this week.

The buyers for EDR, which provides property due-diligence and risk management technology and information, are Silver Lake and Battery Ventures.

United Kingdom

MarketInvoice reaches £2b milestone (Finextra), Rated: AAA

Business finance company MarketInvoice has today reached the landmark milestone of having advanced £2b worth of invoice finance and business loans to UK companies.

The first £1b was achieved after 5 years of trading and the second £1b took just 14 months to reach. During this brief time, two new products were launched (confidential invoice discounting and business loans). These helped MarketInvoice provide funding worth £714.2m to business in 2017 up from £410.4m in 2016 (up 74%).

Lendy Announces 20,000 Investor Milestone & Repays Five Loans in February 2018 (Crowdfund Insider), Rated: AAA

Lendy announced this week it has attracted its 20,000th investor to its peer-to-peer lending platform. This news comes just days after the online lender announced it repaid five loans in February 2018.

According to P2P Finance News, the lender reported that about 7,000 new investors have joined its platform during the past year, with growth in the under 40 age group. Lendy also revealed that investors have secured more than £37 million in interest since its platform’s launch in 2012, with over  £373 million in total has been lent through the platform.

More SMEs planning to apply for finance, research shows (London School of Business & Finance), Rated: AAA

A study from market research agency BDRC has shown that the number of SMEs planning to apply for finance increased in 2017, rising from 10% in the first quarter to 14% in the last three months of the year.  

The company’s SME Finance Monitor surveyed 132,000 businesses and also found that more SMEs are becoming aware of peer-to-peer (P2P) lending, with more than 30% being aware of this type of finance in the final quarter of 2017.

The research showed an increase in awareness of P2P lending combined with crowdfunding, with 46% being aware of these types of finance, up from 36% at the start of last year.

Nearly half (48%) of larger businesses with 50-249 employees were found to be aware of P2P lending, compared to 32% of solo operations and 31% of smaller businesses with fewer than ten employees.

Get ready for UK fintech’s Big IPO Year (AltFiNews), Rated: A

Funding Circle, one of the most notable UK ‘unicorns’ (a tech firm with a valuation north of £1bn), is the latest firm to make headlines for a soon-expected IPO. It also recently enlisted Goldman Sachs and Morgan Stanley to help with the process, according to media reports. Many other notable digital lending platforms such as Zopa and LendInvest as well as banking challengers such as Monzo have also dropped hints that they aspire to move into public spheres eventually, if not soon.

Peer-to-peer lender offers rare secured retail bond paying 5.4pc (The Telegraph), Rated: A

peer-to-peer lender is launching a secured retail bond paying 5.375pc in interest annually, until it matures in 2023. The company, LendInvest, is a service that allows individuals to loan their money to finance property projects.

IF Isas: a bold way to build your capital (Money Week), Rated: A

This time last year, for example, none of the big three peer-to-peer (P2P) lending platforms – Zopa, RateSetter, and Funding Circle – had IF Isas available. But the situation has improved, and now more than 30 platforms offer them.

More than 75% of those surveyed by specialist researcher AltFi Data shortly before Christmas said they weren’t aware of the products.

If you want to lend to consumers, you could try RateSetter, which offers up to 4.9% a year over five years. A far riskier option is FundingSecure. This platform offers 12% or more on sub-prime asset-backed lending – P2P pawnbroking, effectively.

On the lending to business side, Funding Circle offers 7.2%, but is currently only open to existing customers. Assetz Capital offers from 3.75% to 15% over various terms. Crowdstacker offers up to 7%. The UK Bond Network allows you to invest from £5,000 in individual corporate bonds from listed and unlisted businesses, returning an average of 11.1%. And if you prefer to invest in renewable-energy projects, Abundance Investments offers up to 15%.

China

Micro-cap Chinese fintech Senmiao Technology prices $ 12 million IPO at $ 4 low end (Nasdaq), Rated: AAA

Senmiao Technology, an early-stage Chinese marketplace for peer-to-peer lending, raised $12 million by offering 3.0 million shares at $4.00, the low end of the range of $4.00 to $4.50.

At $4.00, the company commands an IPO market cap of $102 million and an enterprise value of $90 million. During fiscal 2017, it booked $0.2 million in revenue and a net loss of $0.7 million.

China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A

Ant Financial Buys Shares in Telenor Microfinance Bank

On March 13, Pakistan’s Telenor Group announced a strategic partnership with China’s Ant Financial Services Group. According to the agreement, Ant Financial will acquire 45% of Telenor Microcredit Bank, at the value of US $184.5 million. According to the agreement, Ant Financial will acquire 45% of Telenor Microcredit Bank, at the value of US $184.5 million.  

JD Finance Starts a New 13 Billion-Yuan Fundraising

On March 13, JD Financial announced that the group has initiated a new 13 billion yuan fundraising round. The new funding raised will be mainly utilized for financial licenses acquisition, technology research and marketing. It is said that CICC and COFCO shall lead this investment with a share of 10-billion-yuan. The leading investors will sign the agreements with JD Finance by the end of March and close their investment by the end of April.

Statistics shows that the valuation of JD Finance has reached 120-billion-yuan before this planned investment and is expected to reach between 165 and 190-billion-yuan after that.

 

 

Weekly Review (Investors Business Daily), Rated: A

China-based online lender Qudian (QD) reported $229.2 million in revenue and diluted EPS of 26 cents. ADT posted a surprise adjusted loss of 6 cents a share on 6% sales growth to $1.11 billion. On a GAAP basis, the home security company earned 99 cents a share.

European Union

Real estate crowdfunding in Finland: the drivers of campaign success and the industry development (Theseus.fi), Rated: B

The objectives of the study were to examine the phenomenon of real estate crowdfunding in Finland, to explain the success or failure of RECF campaigns, to understand the drivers behind industry development and to assess its future potential. The data was collected from the two main sources: interviews with the experts and the information from the websites of the crowdfunding platforms.

International

The Third Age of credit (TechCrunch), Rated: AAA

Today, buoyed by a plethora of technologies and a golden age for abundant data, creditis undergoing its most radical change yet. But it is being pulled in many directions by competing forces, each with their own vision for the future.

The last year has witnessed a Cambrian explosion in credit innovation, unveiling hundreds of possibilities for the future of credit. Unlike the last two ages, credit of the future will be personal, predictive, self-correcting and universal.

What does a new world of credit look like?

Thousands of startups are all finding new ways to apply this same concept of statistical modeling. WeLab in Hong Kong and Kreditech in Germany, for example, use up to 20,000 points of alternative data to process loans (WeLab has provided $28 billion in credit in four years). mPesa and Branch in Kenya provide developing-world credit using mobile data, Lendabledoes so using psychographic data and Koradoes this on blockchain. Young peer-to-peer lending startups like Funding CircleLending Club and Lufax have originated more than $100 billion in loans using algorithmic underwriting.

Victory Park Capital partners IFC on fintech fund for emerging markets (Finextra), Rated: A

Victory Park Capital (“VPC”), a leading investment firm focused on providing flexible debt and opportunistic equity solutions worldwide, announced today that it has launched a new fund together with the International Finance Corporation (“IFC”), a member of the World Bank Group.

The new fund will invest in financial technology companies in emerging markets. The partnership aims to improve access to debt capital for financial technology companies that lend to small businesses and consumers in emerging markets.

Accountants Look to Artificial Intelligence As Clients Get More Demanding (Sanvada), Rated: A

Accountancy firms to be particular are busy investing in AI and automation initiatives to help staffs with mundane tasks. The need is so open in some situations that businesses fail to deliver their mandate to customers.

In the research, close to 50 percent of the accountants said they would like to automate number crunching, diary management and the most time consuming of all: data entry. On the same note, three quarter showed great attraction to AI, to have it assist time-consuming responsibilities and automate involving tasks with recurring patterns.

Accounting firms have been in the front line of using cloud computing and Sage report stated that 67 percent of respondents now link their success to the use of cloud tech.

Finastra named provider of best payments solution by Global Finance (Vested for Finastra Email), Rated: B

Finastra has been named ‘best payment solutions provider’ by Global Finance, as part of the publication’s Best Treasury & Cash Management Banks and Providers for 2018, announced in the March issue of the magazine.

Finastra received the award based on its best-of-breed payments and financial messaging solutions that enable financial institutions and their business customers to manage cash, process payments, exchange information and transfer funds cost-effectively, securely and reliably within and across national boundaries.

Australia

SMEs shun banks, turn to fintechs (Financial Standard), Rated: AAA

The proportion of SMEs planning to use banks dropped from 38% to 24% between 2014 and 2018, the Scottish Pacific SME Growth Index shows. It is recalculated every six months.

About half (47.6%) of the 1253 small-to-medium business leaders who had not used non-banking lending options in the last 12 months said they are interested in using alternative financing in the future.

Of the SMEs that used alternative working capital options in 2017, the most popular was debtor finance (77%), followed by merchant cash advances (23%), peer-to-peer lending (10%), crowdfunding (9%) and other online lending (5%).

9 in 10 SMEs say cash flow problems prevented revenue growth (Finder), Rated: A

A new report released this week has revealed the changing state of cash flow, finance and growth for Australian small- to medium-sized enterprises (SMEs). The SME Growth Index, released by working capital provider Scottish Pacific, found that one in five (21.1%) SMEs were unable to take on new work because of cash flow restrictions, and 9 in 10 (92.7%) SMEs said that cash flow restrictions actually prevented them from generating more revenue.

Small business revenue is heavily influenced by the business’ cash flow. Of the 1,253 small business respondents to the Index, only 7.3% said that improved cash flow would not have led to more revenue. The restrictions on revenue due to cash flow has cost the Australian economy $229.8 billion.

FinTech Australia Points to Report that Highlights Growth in Fintech Lenders as Traditional Finance Declines (Crowdfind Insider), Rated: A

FinTech Australia, is highlighting a report this week that points to the decline in traditional fince options (IE Banks) and the ongoing rise in SMEs using Fintech platforms to address their capital needs.

The report is courtesy of the Scottish Pacific SME Growth Index, released every six months, which is based on interviews with 1,253 SMEs across Australia with annual revenues of up to $5 million.

For SMEs with plans to invest in expansion over the next 6 months, 24% say they will fund growth by borrowing from their main relationship bank – continuing a downward trend, and well short of the high of 38% who nominated this option to fund growth in the first round of the Index in September 2014. More than one in five SMEs (22%) plan to use alternatives to their main bank to fund upcoming growth, with 91% relying on their own funds. Of the SMEs that used alternative working capital options in 2017, their funding choices were: debtor finance (used by 77%), merchant cash advances (23%), P2P lending (10%), crowdfunding (9%) and other online lending (5%).

Gen Y advisers shy away from the big banks (Financial Review), Rated: B

Data from consumer information company Adviser Ratings provided exclusively to The Australian Financial Review reveals in the last two years, the non-aligned sector – or what was previously termed the independent space – has seen it attract 70 per cent of all news advisers, compared with 40 per cent previously.

There has also been a 32 per cent increase in the number of Australian Financial Services Licenses (AFSLs) granted by the Australian Securities and Investments Commission. This equates to 400 new licenses in two years. Total adviser numbers have grown 10 per cent, up to 24,777 from 22,612 over that period.

India

Is RBI sleeping over Faircent’s P2P ad that promises huge returns? (MoneyLife), Rated: AAA

An overhyped, front page advertisements in a leading economic daily by Faircent.com, which claims it is India’s largest peer-to-peer (P2P) lending website, is luring people promising returns that are safer than the risky ’Sensex’ — almost like a Ponzi scheme. Shockingly, the company’s business and its puffery does not seem to attract the attention or supervision of any regulator. Not even the Reserve Bank of India (RBI), whose governor recently lamented that his organisation does not have adequate powers over banks — especially public sector banks. So what about finance companies that are regulated by it? The Faircent.com advertisement would give you a clue. The last line of the advertisement, in its fine print carries a disclaimer saying, the “Reserve Bank of India (RBI) should not be held responsible for these claims or promises”.

Movers And Shakers Of The Week [12–17 March 2018] (Inc 42), Rated: B

Online financial services marketplace BankBazaar has appointed Aparna Maheshas the Chief Marketing Officer.

P2P lending company Faircent has roped in Vikas Prasad and Mayank Bishnoi on board its leadership team.  Vikas has joined Faircent as Head – Planning, Processes, and Control, while Mayank has taken over as Head – Customer Experience.

Asia

Genie: the broadest Asian business loans exchange platform (Global Coin Report), Rated: A

The Genie ICO recently hit its soft cap of $5 million, with another $20 million in the pipeline. They had achieved about $2.5million through crowd sale; with the $3million underwritten amount, the current token purchase crosses the soft cap of $5million.

 

The ICO, which started a few weeks ago, finalized on March, 1st. Tokens were for sale at a rate of 0.0025 ETH, with a fundraising goal of 5,000,000 USD that was already met.

INTERVIEW-Indonesian banks will see “more than 12 pct” loan growth in 2018- regulator (Reuters), Rated: A

Indonesian banks will see “more than 12 percent” loan growth in 2018 thanks to a recovering global economy and a pickup in commodity prices, the country’s financial regulator said.

Loan growth in Indonesia has fallen below 10 percent since the start of 2016, compared with more than 20 percent during the commodity boom years before that.

Canada

Merchant Advance Capital Closes $ 30 Million Debt Facility (deBanked), Rated: AAA

Canadian Merchant Advance Capital closed a $30 million debt facility from Comvest Credit Partners today.

“This is giving us significant runway,” Merchant Advance Capital CEO David Gens told deBanked. “For the next 12 months in particular, we’ve got great visibility as far as where our incremental capital is going to come from. This will allow us to focus less on fundraising and more on just building the business.”

Founded in 2010, Merchant Advance Capital offers several small business financing products including fixed term loans and business lines of credit.

Royal Bank of Canada Explores Blockchain to Automate Credit Scores (CoinDesk), Rated: A

The Royal Bank of Canada may be interested in putting credit scores on a blockchain.

In a patent application released Thursday, the bank outlines a platform built on a blockchain that would automatically generate credit ratings using a borrower’s historical and predictive data. The application as described proposes a system that would utilize more data sources than existing credit rating systems, improving the loan process while creating an immutable record.

If a loan application is submitted, the system would automatically determine what sort of loan and creditor would be appropriate before generating a unique smart contract that contains the terms of the loan.

Authors:

George Popescu
Allen Taylor

Wednesday February 14 2018, Daily News Digest

OnDeck gross revenue

News Comments Today’s main news: OnDeck becomes profitable. NepFin launches first online commercial lending platform for U.S. market. MoneyLion has 2 million customers. Sequoia China leads $40M DataVisor Series C. Moody’s reviews CommonBond for upgrade. Today’s main analysis: Review of OnDeck Q4 2017 earnings results. Today’s thought-provoking articles: The Future of Lending. Is investing RateSetter Isa worth it? Genie ICO: The […]

OnDeck gross revenue

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

OnDeck swings to profit, eyes second bank partnership (American Banker), Rated: AAA

The New York-based small-business lender recorded net income of $5.1 million in the quarter that ended Dec. 31, which compared with a $35.9 million loss in the fourth quarter of 2016.

OnDeck, which has recorded $94.5 million losses over the last two years, is cutting costs in an effort to achieve profitability.

Review of OnDeck Q4 2017 Earnings Results (Lend Academy), Rated: AAA

In the fourth quarter they generated $5 million of GAAP profit. To put this in perspective, this is $41 million better than the prior year period. This puts them on solid footing as they look towards priorities for 2018. Originations for the quarter were $546 million, up 3% from the prior quarter.

Source: Lend Academy

Gross revenue came in at $87.7 million, up 7% year over year. Gain on sale revenue or revenue from loans sold on OnDeck’s marketplace to investors totaled $0.6 million. Other income totaled $3.5 million, up slightly from $3.4 million in the previous quarter.

Source: Lend Academy
Source: Lend Academy

Full Year 2018

  • Gross revenue between $370 million and $382 million.
  • GAAP Net income (loss) attributable to OnDeck between $(2) million and $10 million.
  • Adjusted Net income between $16 million and $28 million.

First Quarter 2018

  • Gross revenue between $86 million and $90 million.
  • GAAP Net income (loss) attributable to OnDeck between $(5.5) million and $(1.5) million.
  • Adjusted Net income between $1 million and $5 million.

OnDeck Flips To Profitability Much To The Market’s Delight (PYMNTS), Rated: A

Originations were up 3 percent over the previous quarter to $546 million.

Loans sold or designated as held for sale through OnDeck Marketplace represented 3.9 percent of term loan originations. Provision for loan losses was $34.4 million and the Provision Rate was 6.4 percent, down from Q3’s 7.5 percent.

Gross revenue increased to $87.7 million, up 7 percent year-over-year, while net revenue was $42.1 million, up 159 percent year-on-year.

The cost of funds rate was 6.5 percent, which was a slight increase over Q3. OnDeck noted that figure will likely continue to tick up during 2018, as the Fed is forecast to keep raising short-term interest rates.

Online lender OnDeck’s profit beats on lower costs, shares soar (Reuters), Rated: B

Shares of OnDeck Capital Inc (ONDK.N) soared on Tuesday after the online lender reported better-than-expected quarterly profit as it set aside less money for bad loans, and managed to keep costs lower.

NepFin Launches First Online Commercial Lending Platform for -Trillion U.S. Market (Digital Journal), Rated: AAA

Neptune Financial Inc., or NepFin, a financial services firm, announced today that it has launched the first online commercial lending platform for mid-sized U.S. businesses, creating a new source of credit as well as business software solutions for a large, thriving sector of the economy whose borrowing options are limited.

NepFin also announced that it has raised a $10-million Series A round led by Sands Capital Ventures with participation from its existing investors. Michael Raab, Partner at Sands Capital, will join NepFin’s board, which already includes Third Point’s David Bonanno, currently a board member of SoFi, as well as Robert Schwartz, Managing Partner at Third Point Ventures. This round brings NepFin’s total capital raised to $13 million.

NepFin, whose platform has digital solutions built from the team’s years of experience in online lending and traditional finance, says that its focus is on one of the most underserved sectors of the broader U.S. economy – businesses with between $10 million and $100 million in revenue. NepFin provides loans of up to $60 million.

LendingClub at the Watermark Conference for Women (LendingClub), Rated: A

LendingClub is excited and proud to be a sponsor of the Watermark Conference for Women being held on February 23rd in San Jose, California. As part of the agenda, two of our Client Advisors from the Business Loans team, Mana and Somie, will be leading roundtable discussions with women entrepreneurs on the core elements to consider when exploring small business financing options.

Forbes Fintech 50 2018: The Future Of Lending (Forbes), Rated: AAA

Affirm, San Francisco

Makes instant three, six and 12 month loans for purchases from 1,500 online merchants. A handful of sellers subsidize 0% rates, but most loans carry annual interest rates of 10% to 30%.

Bona fides: More than 1 million loans issued. Partners include Wayfair and Expedia.

Better Mortgage

Digital-only mortgage originator estimates the loan an applicant qualifies for within three minutes using stated income and a credit score check.

Bona fides: Fannie Mae and five of nation’s six largest banks buy its loans.

Blend

Speeds up the mortgage approval process at the nation’s largest lenders with its cloud based white label software.

Bona fides: Wells Fargo and U.S. Bancorp are already onboard

CommonBond

Online lender refinances and finances undergraduate and graduate student loans.

Bona fidesCommonBond has made $1.5 billion in loans, but says just two have gone into default.

GreenSky

Provides on-the-spot financing for home improvement projects (with loans up to $65,000) via a network of contractors and bank partners — without itself taking on the risk of defaults. Most borrowers don’t pay a dime in interest thanks to zero-interest promotional periods that last from 6 to 60 months. Recently began offering financing at doctor, dentist and veterinary offices.

Bona fides: Has facilitated over $10 billion in loans

Kabbage

Lending platform offers nearly instantaneous small business loans. Uses creative alternative data to underwrite loans–such as the number of UPS packages a business sends and receives over time.

Bona fides: Over $4 billion in originations to 130,000 small businesses

LendingHome

Four year-old online lender started out providing bridge loans to fix and flip housing investors, a historically underserved segment. With original product now available in 25 states, LendingHome has expanded into personal mortgages in 14.

Bona fides: $2 billion in loans made; 10,000 homes financed

Tala

Approves developing-world borrowers who lack a credit history for micro-loans of between $10 and $500 by crunching 10,000 data points—from financial transactions to mobile games played—from an applicant’s smartphone.

Bona fidesHas made more than 4.5 million loans, with a repayment rate above 90%.

Upstart, San Carlos, CA

Uses alternative data such as education, employment history and whether applicants know their own credit score to underwrite and price loans. After five years of training its algorithms, it now approves 47% of loans without human intervention and with some of the lowest default rates in the industry.

Bona fides: $1.5 billion in loans originated to 120,000 borrowers

MoneyLion Reaches 2 Million Customer Milestone As Growth Accelerates (BusinessWire), Rated: AAA

MoneyLion, the digital personal finance platform for the financial middle class, today announced that it now empowers over 2 million customers to better their borrowing, saving and investing through personalized, AI-driven solutions. The growth of MoneyLion’s community is a reflection of the positive financial outcomes its customers have achieved and the platform’s unique approach to money management for everyday Americans.

The momentum behind MoneyLion’s customer growth follows a number of recent milestones for the company, including:

  • The December launch of MoneyLion Plus, a first-of-its-kind membership that combines guided savings, simple investing, access to low-cost loans, and personalized daily financial tips to help consumers build their credit, financial resilience, and first $2,000 in savings. MoneyLion Plus has democratized access to private banking-like services typically reserved for high net worth consumers, providing an opportunity for first-time investors to begin building wealth.
  • Completion of a successful $42 million Series B equity round in January, bringing MoneyLion’s total funds raised to $67 million. This financing accelerates MoneyLion’s continued development of innovative, inclusive financial products and services for America’s financial middle class.

Student lending platform on review for ratings boost (AltFi), Rated: AAA

Moody’s puts six tranches issued by CommonBond on review for upgrade.

Moody’s Investor Services has placed six tranches issued by CommonBond Student Loan Trust 2016-B, 2017-A-GS and 2017-B-GS on review for upgrade. The tranches are comprised of loans to students, and $488m of asset backed securities are affected by the review.

Dwolla Lands $ 12 Million (Finovate), Rated: A

In a short, three-sentence blog post, Dwolla CEO Ben Milne announced that the company closed a $12 million round of funding. The investment, which brings the Iowa-based company’s total to $51.4 million, was led by Foundry Group with participation from Union Square Ventures, Next Level Ventures, Ludlow Ventures, High Alpha, and Firebrand– all existing investors.

Fortress Balance Sheet: Goldman Sachs’ Online Lender Marcus Has Access to $ 17 Billion in Deposits (Crowdfund Insider), Rated: A

But today, Blankfein shared that Marcus now has access to over $17 billion in deposits representing a huge amount of credit firepower at an unbeatable cost to lend.

In a savvy move, Goldman acquired GE Capital’s retail deposits prior to launching Marcus. Since the acquisition, these deposits have grown an impressive 90%.

Secured Lender BlockFi Secures $ 1.55M Funding to Build Cryptoasset Ecosystem (Crowdfund Insider), Rated: A

BlockFi, a New York-based non-bank lender that offers USD loans to cryptoasset owners, announced a $1.55 million raise from ConsenSys Ventures, Kenetic Capital, PJC, SoFi,  Purple Arch Ventures and Lumenary. The new capital injection will be used to bridge the gap between traditional debt capital markets and the cryptoasset ecosystem.

Five credit unions sign with new text messaging platform in January to enhance lending and operations (CUInsights), Rated: A

Shastic, a SaaS company specializing in banking-specific technology services, has signed on five new customers in the first month of 2018. The recent growth follows the fintech company’s early launch of Elle, the conversational text messaging platform built for credit unions. Elle is an expansion of their automation services to deliver efficient, real-time message communication between a credit unions and their members.

Data-sharing spec revised to encourage open banking (American Banker), Rated: A

The Financial Services Information Sharing and Analysis Center announced Tuesday an attempt to move the ball forward on data sharing and open banking in the U.S.

The FS-ISAC on Tuesday released a new version of its technical recommendations for data sharing, the Durable Data API specification. This could become the standard banks and third parties adopt for PSD2-style data sharing and open banking. In fact, the new standard meets all of PSD2’s requirements, according to the security data-sharing organization. (However, PSD2 also requires third parties to register and agree to be overseen by a regulator, something unlikely to happen here.)

What We Talk About When We Talk About Finances (With Alexa) (PYMNTS), Rated: A

As anyone who has used an Alexa skill might know, the movement toward conversational finance, or financial conversations, is a tricky one, as specific instructions or questions (okay, they are commands, really) have traditionally been needed to spur the assistant to retrieve information.

To that end, USAA has sought to bring a natural cadence and flow to the conversation, one that builds, and built, on its experience in the PYMNTS Voice Challenge last year.

In play for customer data, TD Ameritrade rolls out Twitter trading bot (Tearsheet), Rated: B

The brokerage firm released a Twitter bot Thursday, allowing stock investors to execute trades, get market updates and browse educational content through direct messages. For the brokerage, encouraging traders who use Twitter to transact will give it, the hope is, a rich source of user data to offer personalized customer experiences and product recommendations.

Millennial entrepreneur strives to provide affordable financial advice to all (NewsOK), Rated: A

How to go about repairing your credit, reducing your student loan debt or obtaining the best mortgage loan now is available to you through a locally produced app.

The answers are among the widespread financial advice available to consumers nationwide through a new app called Coinmast launched by an Oklahoma City-based millennial entrepreneur.

At $11 a call, the tech startup offers such help from certified financial counselors, certified financial planners and certified public accountants whom Haller contracts nationwide. Experts, he said, offer advice on almost anything, excluding on individual securities, insurance and taxes.

Robo advice app Stash raises .5m Series D, releases investing for kids (AltFi), Rated: A

US-based micro investments app Stash has announced a $37.5m raise in Series D funding, led by Union Square Ventures. Existing investors Breyer Capital, Coatue Management, Entree Capital, as well as fintech familiars Goodwater Capital and Valar Ventures, also joined in on the round.

My Financial Advisor is a Robot (Direct Industry), Rated: A

Fintech company Moneyfarm uses cutting-edge technology as well as human financial expertise to help make investing simple, easy and cost-effective. The company also invests in artificial intelligence and machine learning and recently bought AI-driven chatbot Ernest. 

DirectIndustry e-magazine: What is the technology behind it?

Paolo Galvani: We use technology to match investors with investment portfolios that are specifically built for their investor profiles. Each new customer completes a survey during the sign-up process. The algorithms we have developed in-house match each investor to an investor profile that reflects their tolerance for risk. Investors are then paired with a portfoliothat is specifically built and managed by our team of investment experts to reflect the customer’s investor profile.

LPL rolls out robo-adviser to regional bank (InvesmentNews), Rated: A

Webster Bank, a $26.4 billion financial institution with branches in Connecticut, Rhode Island, Massachusetts and New York, announced that it would start offering access to Guided Wealth Portfolios, a digital advice platform developed by LPL Financial and BlackRock Inc.‘s FutureAdvisor.

Interest Doesn’t Always Bring Adoption of Robo-Adviser Tech (PlanAdviser), Rated: A

A new report published by Cerulli Associates examines the growth trajectory of the digital financial advice market that has occurred since 2015, finding there remains a clear inverse relationship between an investor’s age and their willingness to engage with purely digital financial advice platforms.

Scott Smith, director at Cerulli, notes that as of the third quarter of 2017, there is “greater openness to digital advice relationships, but a strongly negative correlation between age and interest remains.”

Cetera Financial Group Enhance Delivery of Advice-Centric Experience for Financial Advisors, Clients (PR Newswire), Rated: B

Cetera Financial Group (“Cetera”)*, a network of independent firms supporting the delivery of professional financial advice, today announced that the six firms comprising its network will be organized under its newly-created Traditional and Specialty Channels. The formation of these two channels is expected to accelerate the ability of each network firm to support Cetera’s Advice-Centric Experience for advisors and clients, which envisions a financial advice profession driven by goals-based planning and solutions that help clients achieve more predictable outcomes on their journey to financial well-being.

Looking for Credit Union Student Loans? Here’s How to Find and Apply for Them (Student Loan Hero), Rated: B

MyCreditUnion.gov provides a map that makes it easy to locate credit unions in your area. Input your address to find a list of credit unions, directions to each location, and available member services. You can then contact local credit unions to find out about membership requirements and student loan options.

One of the best ways to research your options is to use LendKey. LendKey offers easy access to hundreds of different credit unions and community banks that provide private student loans.

You have the option of applying directly through a credit union that allows people to join from anywhere in the United States. Some examples of credit unions open to individuals nationwide include Alliant Credit UnionDigital Federal Credit Union, and First Tech Federal Credit Union.

United Kingdom

New Isa from RateSetter offers 6% return: is it worth investing? (Which?), Rated: AAA

With the new product form RateSetter, you could earn 3-6% interest on your investment, depending on how long you lock your money away.

RateSetter’s Innovative finance Isa allows you to invest up to £20,000 in a tax year.

It is a flexible Isa product, meaning you can withdraw money and replace it without using up your £20,000 tax-free savings allowance.

Say, for example, you put £10,000 into your innovative finance Isa and then withdrew £5,000. Under the rules, you could still deposit £15,000 without incurring tax.

The shortest duration investment rolls over monthly with an interest rate of 3.1%. The longest is a five-year investment, which currently has an interest rate of 5.8%.

Money goes to… Minimum investment Projected rate
Abundance Green energy projects £5 6-9% over lifetime of investment (3-5 years)
Advancr Public and private businesses £1,000 5-6% depending on length of bond
Basset & Gold Fixed income bonds £1,000 3-7% depending on product
CapitalRise Property development projects £1,000 10% or more depending on the project
Crowd2Fund Businesses £10 9%
Crowd for Angels Crowd bonds funding small businesses £25, but companies can increase that 12%
Crowdstacker Businesses £500, but set by borrowers 5-7%
Downing Crowd Fixed-term bonds for small businesses £100 4-7%
Folk2Folk Asset-backed loans to small, mostly rural businesses £20,000 5.5-6.5% depending on product
Funding Circle* Businesses £1,000 4.8-7.5% depending on selected risk level
FundingSecure Asset-backed sub-prime loans to individuals £25 Up to 16%
Goji P2P Consumer, business and property loans £5,000 5%
HNW Lending Asset-backed loans to individuals and businesses £10,000 6-15% depending on term and risk
Kuflink Property loans £100 5%
LandlordInvest Asset-backed loans to landlords £100 5-12%
Landbay Buy-to-let mortgages £5,000 4%
LendingCrowd Business loans £1,000 6%
Lending Works Individuals £10 3-5% depending on term
Money&Co. Businesses £100 8%
Mongoose Crowd Community energy projects £100-200, but can vary by project 4-7%
Property Crowd Commercial and residential developments £5,000 10%
Proplend Property of varying types £1,000 5-12%
Ratesetter Businesses, individuals and property developers £10 3-6% depending on product
Rebuildingsociety Small and medium-sized businesses £10 9.7%
Relendex Commercial and residential property loans £500 10%
UK Bond Network Businesses £5,000 11%
Zopa** Individuals £1,000 4-4.6% dep

Fintech group TruFin raises £70m (Finextra), Rated: A

TruFin, a British fintech and banking business with fingers in various niche lending pies, has raised £70 million through a listing on the LSE’s AIM market.

LendInvest unveils product transition process (BestAdvice), Rated: A

The Product Transition process allows existing borrowers to transfer between specialised loans that are tailored to support them at each stage in their development project.

Lendy returns £2.1m loan repayment from luxury property in Chelsea (Mortgage Introducer), Rated: A

Peer-to-peer lending platform Lendy returned a £2.1m loan repayment to P2P investors from a luxury apartment in Chelsea, on an investment made through Lendy.

Lendy appoints new head of finance (Bridging&Commercial), Rated: B

Andrew Wawrzyniak has joined the peer-to-peer lending platform from Fund Partners, a fund manager whose clients include Octopus Investments, Pictet Asset Management and Russell Investments.

China

Sequoia China leads $ 40M DataVisor Series C (Bankless Times), Rated: AAA

DataVisor, a provider of fraud detection solutions using unsupervised machine learning, today announced a $40 million Series C round of financing led by Sequoia China, with participation from existing investors New Enterprise Associates and GSR Ventures.

Rock Wang, managing director at Sequoia China, will join DataVisor’s board of directors. With this new round of financing, DataVisor will expand its global footprint in the fraud detection and prevention market, which is estimated to reach $41.6 billion by year 2022 according to research firm MarketsandMarkets.

European Union

Swedish Online Payments Company Klarna Shuts Down Tel Aviv Development Center (CTech), Rated: AAA

Swedish online payments company Klarna Bank AB (publ) will be shutting down its Tel Aviv development center during the next few months, the company announced Tuesday. All 31 of its employees in Tel Aviv were offered the opportunity to remain with the company and relocate to one of its Swedish or German offices.

Banco BNI Europa to invest with CrossLend (Finextra), Rated: A

Banco BNI Europa and CrossLend have launched a cooperation whereby Banco BNI Europa invests into notes issued by CrossLend Securities SA.

International

Barclays faces new charge, Triodos innovates and outlook for Citizens Bank in the US (Financial Times), Rated: A

Martin Arnold and guests discuss the latest charges against Barclays, Bevis Watts of the ethically-focused bank Triodos talks about his new UK peer-to-peer lending model and Bruce van Saun explains what US rate rises will mean for Citizens Bank.


 

Australia

DirectMoney Secures New Strategic Investment From Alceon For Growth & Innovation Initiatives (Crowdfund Insider), Rated: AAA

Australian marketplace lending platform DirectMoney announced on Tuesday it secured a strategic investment from alternative investment manager Alceon to fund growth and innovation initiatives.

According to DirectMoney, the investment will be structured through an initial placement of $600,000 at $0.042 per share (being 14,285,715 new shares), a 56% premium to the price at close of trading on February 9th and equivalent to a 3.1% shareholding.

India

Why just rent when RentoMojo also gives you the option of renting and owning (YourStory), Rated: AAA

Online rental and financing marketplace RentoMojo, which lets consumers in eight cities lease furniture, two-wheelers and home appliances, has launched an additional  rent-to-own model. 

PE AND VC OPPORTUNITIES IN 21ST CENTURY INDIA (AllAboutAlpha), Rated: AAA

ARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country.

The main text of the paper begins with sectoral analysis and market behavior. PE and VC investments in India declined in the early months of 2017, but they had started to pick up already before the end of the first quarter and in the third quarter investments by such vehicles “surprised the market with a tremendous jump in deal volume as well as value.”

In August of that year the deal value reached US$5 billion. The third quarter as a whole saw 129 deals of value greater than US$100 million, aggregating to about US$7 billion.

The most lucrative sector last year was e-Commerce, “in spite of the sharp fall in investments by the end of AY 2016,” followed by real estate. In the 3d quarter, e-Commerce recorded roughly US$2.6 billion in deals across 18 deals. Real estate?  US$2.3 billion across 13 deals. Banking and Financial Services? Third place in the league table with US $1.4 billion across 25 deals.

MoneyOnMobile Raises $ 5 Mn Funding From S7 Group (Inc42), Rated: A

Mumbai-based fintech startup MoneyOnMobile has raised $5 Mn in Series H funding from Russia-based private aviation and aerospace holding company S7 Group. The development comes just two weeks after the startup secured $7.6 Mn Series F funding from undisclosed investors.

Asia

Genie ICO: A Blockchain Network For Decentralized Business Loans (Global Coin Report), Rated: AAA

Genie was created to provide individuals based in Asia with a unique way to borrow and lend money for their business using a peer-to-peer system that is based on a blockchain network. The Genie ICO has been created by an experienced team after observing the rapidly changing Asian financial landscape ever since cryptocurrencies, ICOs, and blockchain technology grew to prominence in 2017.

The platform will also have its very own token Crowd Genie Coin (CGC) which will be generated via an ICO. There will be a limited supply of 120,000,000 tokens available. Of this amount, only 50 million will be available for purchase during the token sale. The rest of the tokens will be used for facilitating transactions on the platform, will be given to the founders, used for distribution, etc. All tokens that are not bought during the token sale, however, will be destroyed to increase the value of a single CGC.

The Genie team hopes to raise a total of $35,000,000 throughout the ICO and the value of 400 CGC tokens has been estimated to be of equal value of 1 ether, which at the time of writing equates to $858. This means that a single CGC is worth $2.15. However, the interested investor can invest a minimum of 0.1, which will attract a wide variety of investors.

Authors:

George Popescu
Allen Tayl

Friday January 5 2018, Daily News Digest

small business lending

News Comments Today’s main news: Wealthfront gets backing from Tiger Global. Funding Circle partners with Kansas bank. Elevate customers see rise in credit scores. NextCapital raises $30M for digital advice platform. London tops tech funding. HMT Treasury says P2P lending not deposit-taking. Yields lower in Euro zone as MiFID II begins. Today’s main analysis: FT Partners’ CEO monthly alt lending market […]

small business lending

News Comments

United States

United Kingdom

European Union

International

India

Asia

News Summary

United States

An investing startup that grew by $ 100 million in a single day just got some big name backing (Business Insider), Rated: AAA

Wealthfront, a robo-adviser with more than $9 billion under its management, announced Thursday that Tiger Global, the New York investment firm, would lead a $75 million fundraising round.

Wealthfront plans to use the new capital to enhance its Path platform, which allows users to view all of their financial accounts.

“Path’s appeal to young people propelled our growth such that people under 45 now represent 85% of our clients,” Wealthfront cofounder Andy Rachleff said in a statement.

FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

As FT Partners wraps up 2017 and looks forward to 2018, we are extremely proud of our accomplishments. Celebrating over 16 years in business, we executed a record number of deals, significantly expanded our team, continued our global expansion and won a number of industry awards during the past twelve months. We are confident that 2018 will be another successful year for the Firm and we are incredibly thankful to our clients and friends across the industry.

In case you missed it, we recently published our latest in-depth, 200+ page industry report: “

Source: FT Partners

Read the full report here.

Business-Loan Growth Fell Off a Cliff in 2017 and No One Can Figure Out Why (WSJ), Rated: AAA

Business-loan growth fell to its lowest levels since the aftermath of the financial crisis in the final weeks of 2017, a puzzling development that could weigh on bank earnings later this month.

Bank loans to companies grew 1.1% from a year earlier as of Dec. 20, up slightly from a 0.8% rate the prior week, according to Federal Reserve data. That Dec. 13 level was the lowest since spring 2011, when banks were just starting to lend to companies again after the financial crisis.

The readings likely cement 2017 as the worst year for this type of lending in recent history. The average weekly rate of business-loan growth was 2.7% for 2017 through Dec. 20, compared with 9.3% in 2016 and double-digit growth in the two years before that.

Looking at 2018: A Discussion with Ron Suber (Crowdfund Insider), Rated: AAA

“[People] from the banking industry from the tech industry. We have grown up,” said Suber. “We had some people that were great from the early days but were not good for long term growth. There has bee a major turnover in the leadership at many of these companies. My call is that companies are focusing on cash flow, profitability and EBITDA for the first time. Earnings on GAAP basis … I think that is great for the industry. You are seeing companies generate cash. [In the past] Prosper did $400 million in month and it lost money. Now it is doing, say $200 million a month and it is making money. They are being run to be profitable businesses. That is the takeaway from 2017.”

Suber says that today, Prosper makes money every quarter. They have $100 million on the balance sheet and it gets higher every month.

“We are seeing lots of money coming in from Asia to buy loans now. More than ever,” added Suber.

LendingClub, a reporting company, has had a tough two years as its stock has tanked while Wall Street looked elsewhere for growth.

ELEVATE ANNOUNCES BOOST IN CUSTOMER FINANCIAL HEALTH (BusinessWire), Rated: AAA

More than 140,000 customers of Elevate’s RISE product have seen an improvement in their credit scores. Additionally, more than 35,000 RISE customers are now eligible to receive at least a 50 percent reduction in their APR and more than 13,000 customers are eligible to receive RISE’s lowest rate.

More than 160 million Americans are either non-prime or “credit invisibles,” without any credit score. These customers account for almost two-thirds of the U.S. population, yet are significantly underserved by the traditional financial industry.

RISE loans are originally priced to risk. Customers are eligible to receive 50 percent off of their rate on subsequent loans after 24 months of payments, eventually achieving a further reduction to 36 percent. Today, more than 35,000 customers have received or are eligible to receive a 50 percent rate reduction and more than 13,000 customers are eligible for an APR of 36 percent.

About the Data

Elevate worked with a major credit bureau to which it reports, gathering anonymized data on RISE customers. Elevate reviewed credit scores of customers from the customer acquisition point up to two quarters after loan completion.

The number of customers who have reached the necessary number of payments to receive a rate reduction was calculated by tabulating the number of accounts at the number of payments necessary.

  • 24 months of payments are required to receive 50 percent off of the customer’s original APR
  • 36 months of payments are required to reach 36 percent

NextCapital Raises $ 30M for its Digital Financial Advice Platform (ChicagoINNO), Rated: AAA

NextCapital officially announced Thursday that it has raised $30 million in new funding to grow its enterprise digital advice platform.

The Series C round brings the company’s total funding to more than $52 million. The round was led by Oak HC/FT, and included additional investments by Manulife Financial, Transamerica Ventures, Vermont Seed Capital Fund and Route 66 Ventures.

FSOC Annual Report on Financial Stability Highlights Marketplace Lending (Lend Academy), Rated: A

Last month the Financial Stability Oversight Council (FSOC) released their annual report. This 165-page report highlights potential risks to our financial system by looking at new developments and providing recommendations to improve financial stability.

Section 4.14 of this year’s report deals with new financial products and there is an entire section on marketplace lending. Here is their conclusion about our space:

Although marketplace lending has the potential to reduce costs and expand access to credit, the extent to which these benefits have been realized thus far is unclear. Furthermore, the marketplace lending model has not been tested through a full credit cycle. There are risks that misalignment of incentives could exist on these platforms.

Can blockchain technology revive peer-to-peer lending? (American Banker), Rated: A

The original premise of online peer-to-peer lending platforms was simple and democratic: A single mom from Kalamazoo, Mich., could post her story explaining why she needed $5,000 to pay off her credit card, and a retired electrician in Illinois could read it, decide to fund her loan and receive interest far exceeding what he could get on his savings account.

LendingClub and others that proffered this people-helping-people model quickly found they needed to make changes.

 

Unbanked vs. Underbanked: Who they are and how they differ (MicroBilt), Rated: A

Slightly more than two-thirds of households in America frequently make use of traditional banking services, according to the Federal Deposit Insurance Corporation. But that leaves 33 percent of people in the U.S. who don’t, a significant percentage by any measure.

Unbanked

As the title implies, unbanked Americans are those who don’t make use of any banking services whatsoever. This includes debit cards and checking accounts, as well as savings accounts. In 2015 – the most recent year for which data is available – the unbanked represented 7 percent of U.S. households, translating to approximately 23 million individuals, including children, the FDIC reported. The percentage of unbanked households in the U.S. is down slightly from 2013, when it was 7.7 percent.

Families have a plethora of rationales for why they opt to go without banking services, but it’s usually due to what they do not have in terms of savings. Nearly 57 percent of unbanked households cite this as their prime reason, according to the FDIC report.

Underbanked

Around 20 percent of Americans are underbanked, according to the FDIC, which means they have either a checking or savings account, though rarely both. Households are also usually given the underbanked distinction if they’ve used alternative financing options during the previous year, such as money orders or rent-to-own services. Around 67 million Americans are underbanked, or the equivalent of 24.5 million households, based on 2015 figures from the most up to date FDIC survey.

As far as demographics are concerned, millennials are among the most likely to be underbanked, with 31 percent of them under the age of 24, according to federal figures.

‘We don’t need to stay in the student market’: How BankMobile wants to grow its offering and replicate its model (Tearsheet), Rated: A

BankMobile, the digital-only bank that offers checking accounts to students, wants to start offering them credit.

The three-year-old Customers Bank subsidiary launched a personal loan product for its customers at the end of December, but that was just the first of a suite of credit products the bank plans to roll out this year as part of its “customer-for-life” strategy, according to Luvleen Sidhu, president and chief strategy officer.

BankMobile has 1.8 million customers to date and has opened about 300,000 new accounts each year in the student demographic through its university partnerships.

Why are you expanding into credit now?
We’re just looking at our demographic. Many in our current customer base are living paycheck to paycheck — that’s why personal loans make sense.

How do you plan to expand your products after the personal loan?
We have a lot of products to introduce on the credit side: credit cards in the second quarter, student refinancing in the second quarter, auto loans and home equity by the second half of next year.

You’re partnering with Upstart on credit products. What are the advantages of that approach?
In the longterm you could say it’s more expensive to partner but those costs outweigh the fact that we get to market much faster.

How has competition changed since BankMobile launched?
It’s accelerated. Challenger banks and Neobanks like Moven, GoBank, Simple and Varo continue to flourish and grow. Digital banks like Ally, USAA and Captial One 360 have really done a push in 2017 attracting millennials, tweaking their product, tone, messaging, branding to make sure they start penetrating that segment. Traditional banks are finally realizing the branch based customer acquisition model is not sufficient.

Banks compete for tech talent by helping on student loans (American Banker), Rated: A

Banks spend not only a lot of time thinking about how to attract millennial customers, but also how to get millennials to work for them.

Though banks might be hard-pressed to offer similar wages — average starting salaries at Uber, Pinterest, and Airbnb are all over $220,000, according to Paysa — they can offer something most tech companies don’t: a student loan repayment benefit plan.

Inside Citizens Bank’s branch redesign strategy (Tearsheet), Rated: A

Banking giants like Citi and Capital One with much more money and resources at hand have been making branches look more like lounges, coffee shops or museums as they figure out what to do with them with less foot traffic, but in 2018, smaller institutions could start to make a move on their plans.

The Providence, Rhode Island bank is transforming its branches into digitally-connected community centers, Johnson said.

Citizens currently has 1,200 branches, and the bank is in the second year of a 10-year plan to reduce its branch footprint as lease expiries take effect. It’s replacing paper pamphlets with digital tools, like a digital retirement checkup platform customers can use while meeting with bankers. The bank can also project digital content onto the walls of a meeting room — a nod to the digital-first habits of some younger customers. Citizens is on an ambitious track to reduce its retail footprint by as much as 50 percent — a “do more with less” approach that over the long term that will save occupancy costs, CEO Bruce Van Saun said in an earnings call last year.

How banks use behavioral economics to win over customers (American Banker), Rated: A

When a major international bank was looking to improve the response rates for its credit card mailers in 2017, rather than changing the graphics or upgrading the paper stock, it turned to a firm that could offer guidance on how consumers make decisions.

It was trying to tap into the insights of behavioral economics, a discipline that uses psychological observations about human behavior to analyze and predict how people will act.

A Fight Over the Credit Score Lenders Use for Your Mortgage (WWJ), Rated: A

Banks and rival lenders are butting heads over the credit scores used to decide millions of mortgage requests by U.S. home buyers.

Now, a federal agency is weighing whether to step into the fight, which revolves around a longtime requirement for lenders who sell mortgages to Fannie Mae FNMA -3.17% and Freddie Mac FMCC -3.31%to gauge most borrowers using FICO scores. The Federal Housing Finance Agency’s ultimate decision could have wide-reaching ramifications for the mortgage market and home buyers across the U.S.

Many nonbank lenders, which in some recent quarters have accounted for more than half of the mortgage dollars issued in the U.S., want the ability to use a credit score provided by a company owned by credit-reporting firms Equifax Inc., EFX +0.00% Experian EXPGY 0.23% PLC and TransUnion . TRU 0.80% These lenders argue the alternative score would open the mortgage market to a greater number of people and lead to more mortgage approvals, helping to boost home sales and the economy.

That is where VantageScore Solutions LLC, the scoring firm that Experian, Equifax and TransUnion launched in 2006, says it can step in.

The company says it can assign a credit score to about 30 million more consumers than FICO. Roughly 7.6 million of those consumers would potentially be eligible for a Fannie or Freddie mortgage, VantageScore says.

Envestnet Finalizes Acquisition of FolioDynamix for $ 195 Million (Finovate), Rated: A

Wealth management intelligence solutions company Envestnet has finalized its acquisition of Actua Corp’s FolioDynamix, a wealth tech solutions company, this week.

PropertyMetrics helps real estate investors create more accurate proformas (Realty Biz), Rated: A

With that in mind, a company called PropertyMetrics has built a web based platform that’s designed to help investors come up with a proforma that includes evaluation and analysis. With PropertyMetric’s software it’s possible to analyze any property in minutes, from any device. This means investors can quickly generate a quick cash flow proforma, perform a cash flow analysis and generate PDF reports from anywhere, in a matter of minutes.

10 favorite stocks for 2018 from top-ranked stock newsletter writers (MarketWatch), Rated: A

Michael Brush, Brush Up on Stocks

I also recently suggested Lending Club Corp. LC, +0.98% in part because of the huge buying by Chinese technology and internet expert Tianqiao Chen, who founded the online gaming company Shanda Interactive Entertainment years ago while he was in his 20s.

He owns around 20% of Lending Club, an online peer-to-peer lending platform. LendingClub recently tightened its lending standards, which hurt loan growth, so the company missed earnings estimates and guided down. But it still expects 15%-20% annual revenue growth over the next few years. This seems plausible given how many people with OK credit would like to refinance their credit card debt with loans. Lending Club estimates $300 billion to $350 billion in credit card debt could potentially be refinanced in this way.

An Online Lending Task Force is Coming to New York (deBanked), Rated: A

An online lending task force DFS study will be coming soon to New York, according to legislative records.

Chippewa Cree Tribe Settles BEH Gaming Ltd Lawsuit (PRWeb), Rated: B

Plain Green, LLC, the online resource for the short-term financial needs of underbanked and subprime consumers, today announces a successful settlement with BEH Gaming Ltd related to loans to the Chippewa Cree Tribe and Chippewa Cree Tribe Development Corporation. Plain Green’s settlement and payment of the debt to BEH releases the Chippewa Cree Tribe and Chippewa Cree Tribe Development Corporation from all liability. The settlement amount is under seal of court order.

The agreement settles a lawsuit filed by Florida-based BEH Gaming Ltd in 2014 (Case # DV-14-142 in the 12th Judicial District Court in Hill County, Montana) to repay loans to expand Northern Winz Hotel and Casino.

Portland ad agency lands $ 126M LendingTree account (Biz Journals), Rated: B

Advertising agency R2C inked a deal late last month to become the new media partner for LendingTree Inc.

LendingTree is an online loan marketplace for financial needs like auto loans, small business loans and credit cards headquartered in Charlotte, N.C. AdWeek reports that the company had a media budget of $126.5 million in 2016, and spent nearly $61 million during the first half of 2017, though R2C won’t manage LendingTree’s entire media budget.

Growing your business? These 3 financing mistakes can cost you big (News-Journal), Rated: B

1. Not understanding the true cost of your loan

When shopping for a business loan, it’s easy to become overwhelmed by fast-talking salespeople, endless strings of acronyms and confusing terms. If it’s unclear how much you’ll really pay for financing, that’s a good sign you should walk away, Hodges cautions.

2. Getting trapped in daily or weekly repayment cycles

Term loans are often the better option, Hodges says. They allow businesses to borrow a set amount of money for a specific purpose, like hiring new staff or stocking up on inventory. The funds are then paid back over a set amount of time, with consistent monthly payments and no surprise fees.

3. Not knowing what you deserve

After seeing countless small businesses get stuck with credit products they couldn’t afford or understand, a coalition of small business advocates, lenders and online credit marketplaces came together to launch the Small Business Borrowers’ Bill of Rights. As the first-ever gold standard for responsible business lending, the Bill of Rights outlines the rights and safeguards that small businesses should expect from finance providers.

3 Behaviors To Keep Credit in Good Standing (MicroBilt), Rated: B

Source: MicroBilt
United Kingdom

London was top destination for tech funding in 2017 (Reuters), Rated: AAA

London was the top city in Europe for technology investment last year, with more funding going into companies in the British capital than into firms based in Paris, Berlin and the next seven cities combined, data showed on Friday.

Tech firms in London attracted 2.45 billion pounds ($3.3 billion) in venture capital funding in 2017, about 80 percent of the 2.99 billion pounds invested in Britain as a whole, according to data compiled by funding database PitchBook for London & Partners.

Fintech, or financial technology, was the most popular segment for investors, attracting a record 1.34 billion pounds in venture capital, the data showed, led by major rounds for TransferWise, Funding Circle and Monzo.

London’s tech scene pulls in record £2.5bn in 2017 venture capital bonanza (City A.M.), Rated: AAA

London’s tech venture capital investment reached another all-time high in 2017 as firms raked in four times more cash than Paris, the nearest European rival.

Softbank’s $502m (£392m) investment in game development platform Improbable was the biggest single investment during the year, but it was London’s burgeoning fintech firms which led the way with a record haul of investments.

European cityLondon Total funding raised (£)

2.45bn

European cityParis Total funding raised (£)

564.97m

European cityBerlin Total funding raised (£)

456m

European cityStockholm Total funding raised (£)

360.27m

European cityMadrid Total funding raised (£)

65.38m

European cityAmsterdam Total funding raised (£)

212.18m

European cityDublin Total funding raised (£)

117.45m

European cityHelsinki Total funding raised (£)

56.98m

European cityCopenhagen Total funding raised (£)

40.23m

European cityLisbon Total funding raised (£)

2.43m

Treasury clarifies whether P2P lending constitutes deposit-taking (AltFi), Rated: AAA

HMT Treasury has passed an order confirming that straight-forward peer-to-peer lending does not constitute deposit-taking.

The order relates to the now-infamous “Dear CEO” letter, sent in March 2017, in which the FCA effectively ordered P2P platforms to cease and desist with all wholesale lending activities. The rationale was that a business borrowing money in order to lend that money on constitutes a form of deposit-taking. This was deemed illegal, per article 5, paragraph 1 of the regulated activities order.

How angel investors support UK start-ups (Growth Business), Rated: A

Investing in start-ups is becoming increasingly popular and accessible in the UK. The attractiveness of that market has come from two main factors: the success of a number UK start-ups built over the past two decades (ASOS, Just Eat, Zoopla, Funding Circle) which are showing the way for many more to come and the supportive policies implemented by the various governments over the same period to encourage investment in ventures.

These schemes have proven to be extremely popular with private investors who every year invest over £1.5 billion into high growth ventures under SEIS and EIS.

So how do you get started with investing in start-ups if you are new to this market?

Your first option is to invest through online equity crowdfunding platforms (ECF) such as Seedrs, Crowdcube and Syndicate Room, which showcase dozens of investment opportunities from start-ups looking to raise equity funding from the public. The advantage of ECF websites is that they are convenient and accessible to anyone with investment tickets starting at £10.

If you consider yourself to be a more sophisticated type of investor looking to build a portfolio of investments with tickets of more than £5,000 per company, then you should probably think about joining an angel syndicate.

A third option to get started is to invest through a start-up fund.

High numbers using expensive credit to buy basic household appliances (Ekklesia), Rated: A

Research found almost 60 per cent of people on a low income turn to more expensive forms of credit to purchase home appliances because they do not have the means to pay up front or access to affordable credit. Seventeen per cent say they used a credit card to make the purchase, 10 per cent used an overdraft and 10 per cent used a store card. More worryingly, significant numbers said that they used high cost credit to buy home appliances, with 13 per cent relying on hire-purchase and eight per cent saying that they used a payday loan.

Blockchain-based banking startup Babb names Paul Johnson as CIO (Finextra), Rated: B

Blockchain-based banking startup BABB (Bank Account Based Blockchain) has appointed banking technology veteran, Paul Johnson who previously lead one of the UK’s leading challenger banks, Aldermore, as CIO to spearhead the development of the world’s first decentralised bank.

European Union

Euro zone yields edge lower as MiFID II kicks in (Reuters), Rated: AAA

Germany’s 10-year government bond yield fell 2 basis points to 0.44 percent DE10YT=TWEB, off two-month highs hit on Tuesday after weekend comments from the European Central Bank’s Benoit Coeure that there was a “reasonable chance” ECB stimulus will not be extended this year.

Most core euro zone bond yields were down 1-4 bps on the day, with the gap between Italian and German 10-year bonds yields tightened to 160 basis points as Italian yields dropped as much as 6 bps to 2.03 percent. IT10YT=TWEB

Ireland meanwhile kicked off its annual funding drive by raising 4 billion euros with a syndicated 10-year bond, covering around a quarter of its issuance target just three days into the year.

P2P platform bosses offer cautious support for pan-EU licences (AltFi), Rated: A

“Opt-in passports” are the way forward, says Lendix co-founder Patrick de Nonneville.

The EU Commission is laying the groundwork for a licence that will allow European crowdfunding and peer-to-peer lending platforms to operate across the bloc.

“We think it’s a great development that will be useful for us,” said Patrick de Nonneville, chief operating officer at French marketplace lender Lendix.

Raffael Johnen, CEO and co-founder of leading German marketplace lender auxmoney, offered his thoughts.

“Getting closer to a single digital market will further boost the creation of true European fintech champions.”

International

Online lender Funding Circle inks partnership with Kansas bank (American Banker), Rated: AAA

Funding Circle, an online lender that operates in four countries, is partnering for the first time with a U.S. bank.

On Thursday, the 7-year-old company announced a deal with Intrust Bank in Wichita, Kan., under which it will sell $20 million worth of its small-business loans to the $5 billion-asset institution.

This Cryptocurrency Inventor Has Suddenly Become One of the World’s Richest Men (Money), Rated: A

Cryptocurrency has a new king. His name is Chris Larsen, and he’s the co-founder and former CEO of Ripple, which created the digital token known as XRP. He’s now one of the world’s richest billionaires, thanks to XRP’s incredible hot streak.

XRP, a cryptocurrency intended for international transactions, has had a meteoric rise this winter. Its value went from $0.25 a coin in mid-December to $3.16 as of Wednesday, according to Coinmarketcap. It’s currently the second biggest cryptocurrency behind Bitcoin.

Forbes reports that, as a result, Larsen almost instantly became worth $37.3 billion (based on XRP’s Monday exchange rate).

India

BCCL invests in fintech company FinREQ in an ads-for-equity deal (Medianama), Rated: AAA

Bennett, Coleman & Co Limited (BCCL), the publisher of the Times Of India and the parent of Times Internet, has acquired an undisclosed stake in online loan company FinREQ.

As such, it looks like the investment in FinREQ is an ads-for-equity deal.

FinREQ was founded in 2011 and has tie-ups tie-ups with nationalized, co-operative, foreign, private banks, NBFCs and Housing Finance Companies. The company provides a variety of loans ranging from overdrafts, import & export finance, supply chain financing, loans against property (LAP), loans against share, lease rental discounts and others.

Online lending platform EarlySalary raises $ 15.7 mn in Series B round (VC Circle), Rated: A

Pune-based Social Worth Technologies Pvt. Ltd, which runs online lending platform EarlySalary, has raised Rs 100 crore ($15.7 million) in a Series B funding round led by Eight Roads Ventures India, a company statement said.

Invest smart with these asset class investment options (ANI), Rated: B

Fixed Depositsinvestment in goldReal Estate and many other traditional options are losing grounds when trying to woo the new age investors.

A research from the Transamerica Center for Retirement Studies indicated that nearly three-quarters of millennials are saving for retirement and that we started doing so at an earlier age than previous generations.

Peer-to-peer (P2P) lending in India currently gives a net return of 18-22 percent to lenders.

Asia

Commencement of Online Lending Service for Small Businesses That Leverages Accounting Big Data and AI Technology (Orix), Rated: A

ORIX Corporation (“ORIX”) and Yayoi Co., Ltd. (“Yayoi”) announced today that the ALTOA Online Lending Service, which leverages accounting big data and AI technology, will commence its operation through the jointly established entity, ALTOA, Inc. (“ALTOA”).

The ALTOA Online Lending Service is an online lending service that provides small amount, short-term loans for small businesses through a new credit model that leverages the credit know-how of ORIX, the accounting big data of Yayoi, and the AI technology of d.a.t. Inc., who is a partner in this venture.

Authors:

George Popescu
Allen Taylor