- Today’s main news: Funding Circle closes $198M ABS for U.S. SMBs. KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2019-P2. SoFi to create 300 jobs in Jacksonville, Florida. LendInvest postpones IPO until at least 2020. Binance offers crypto lending.
- Today’s main analysis: The nonbank and alternative lending industry in 2019.
- Today’s thought-provoking articles: Cities with the most swimming pools. Prospa full year results. IOU Financial financial results through June 30, 2019. Why and how P2P lending became marketplace lending. 2019 Finder awards.
- Funding Circle closes $198 million ABS to support U.S. SMBs. This is significant in more than one way. One of the best ways is that it signifies the continued encroachment of European alternative finance firms into the U.S. market. Funding Circle is a major player.
- KBRA assigns preliminary ratings to CLUB Credit Trust 2019-P2. Issued by Lending Club.
- SoFi to create 300 jobs in Jacksonville, Florida. The company is seeking $1.5 million in state and city incentives.
- Cities with the most swimming pools. LendingTree continues to publish the most interesting reports. This one isn’t trivial. A swimming pool can add significant value to a property. For real estate investors, this is a must-read.
- Nonbank and alternative lending in 2019. Business Insider has several interesting reads today. This one leads the pack.
- Court activity on SoFi v. Cindy Luu.
- Brex partners with BigCommerce on merchant financing.
- N26’s plan to win Americans over.
- Digital banking and branches is not an either/or proposition.
- Fifth Third is banking on alternative power.
- A BlueVine report suggests half of SMBs are not prepared for recession.
- How students avoid college loans.
- Fund That Flip raises $11 million.
- New tools for mortgage lenders.
- Pagaya closes $115 million consumer credit ABS.
- Blooma launches AI loan origination platform with $2.75 million seed funding.
- Cred hires former PayPal exec as CFO.
- iCapital Network expands executive team.
- Klarna sponsors fashion week event.
- White Oak Commercial Finance originates revolving credit facility for The Good Kitchen.
- California lenders moving away from small-dollar loans.
- LendInvest to postpone IPO at least until 2020. They’re seeking private money instead.
- Mobile banking apps surge ahead of investment, insurance apps.
- Klarna launches VAR campaign created by 72andSunny.
- Celsius Network sees 20x increase in deposits.
- P2P growth is cannibalizing High Street bank market share.
- Revolut hires from traditional banking for executive team.
- Numbrs becomes a unicorn.
- P2P Global Investments sells largest position for 250 million euros.
- How the EU is trying to understand AI apps.
- Binance offers crypto lending. Crypto lending is already growing and expanding in popularity. This could catapult it into becoming a larger part of the alternative lending industry. Why? Because Binance is the largest cryptocurrency exchange by volume.
- Alt finance is booming.
- Real estate crowdfunding trends.
- How and why the cryptocurrency market center moved to Asia.
- Australia: Prospa’s full year results. Prospa is looking good all around.
- Canada: IOU Financial’s results through June 30, 2019. A positive sign for Canada’s alt finance market.
- Australia: Finder awards. Congratulations to Harmoney, Tic:Toc, and other alt finance winners.
- Africa: Why and how P2P lending had to become marketplace lending.
- India: Future trends in the startup ecosystem.
- India: Xiaomi moves into India’s consumer lending market.
- India: RentoMojo gets injection from Renaud Laplanche.
- United States
- Funding Circle Closes $ 198 Million Securitization to Support US Small Businesses (Valdosta Daily Times), Rated: AAA
- KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2019-P2 (Benzinga), Rated: AAA
- DeSantis says SoFi, SS&C Technologies will create 498 jobs in Jacksonville (Jax Daily Record), Rated: AAA
- Court activity on Aug. 27: Sofi Lending Corp. vs Cindy Luu (SE Texas Record), Rated: B
- Swimming Pools Are a Highly Prized Amenity Amid the Summer Heat (LendingTree), Rated: AAA
- Brex Teams With BigCommerce To Offer Merchant Financing (PYMNTS), Rated: A
- German challenger bank N26’s plan to win over Americans (American Banker), Rated: A
- Digital Banking And Branches Not An Either/Or Proposition (PYMNTS), Rated: A
- Why Fifth Third is raising its bet on alternative power (American Banker), Rated: A
- How to Get Your Small Business Ready for a Recession (Successful Meetings), Rated: A
- How students are trying to avoid college loans (Marketplace.org), Rated: AAA
- A look at the nonbank and alternative lending industry in 2019 (Business Insider), Rated: AAA
- Fund That Flip Raises Another $ 11M to be the Funding Solution for Real Estate Speculators (Alley Watch), Rated: A
- New Tools Help Mortgage Lenders Build Stronger Relationships with Borrowers’ Real Estate Agents (SimpleNexus), Rated: A
- Pagaya Expands PAID Shelf with Prosper: Closing $ 115 Million Consumer Credit ABS (BusinessWire), Rated: A
- Tech startup Blooma launches out stealth with $ 2.75 million seed funding for its loan origination AI platform (Tech Startups), Rated: A
- Former PayPal executive joins crypto lending startup Cred as CFO (The Block Crypto), Rated: B
- iCapital Network expands exec team with four New hires (PE Hub), Rated: B
- “STYLE360” Celebrates 15 Years At New York Fashion Week With New Title Sponsor Klarna (PRWeb), Rated: B
- White Oak Commercial Finance Originates a Revolving Credit Facility to The Good Kitchen (Financial Content), Rated: B
- Lenders Moving Away From Small-Dollar Loans to High-Interest Installment Loans (Lexology), Rated: B
- United Kingdom
- LendInvest reportedly shelves IPO plans for now (AltFi), Rated: AAA
- Mobile banking apps in the UK are surging ahead of investment and insurance apps (Business Insider), Rated: A
- Klarna launches VAR campaign created by 72andSunny (Prolific London), Rated: A
- Celsius Network Sees A 20x Increase In Deposits, However, Many Analysts Are Concerned (Bitcoin Exchange Guide), Rated: A
- New data reveals rapid growth in Peer-To-Peer lending is cannibalising High st bank market share (ResponseSource), Rated: A
- Revolut Boosts Executive Leadership with New Hires from Traditional Banking (Crowdfund Insider), Rated: B
- European Union
- Zurich-based Numbrs is the latest fintech to join the unicorn club (Business Insider), Rated: AAA
- P2P Global Investments sells largest position for €250m (AltFi), Rated: A
- What is the EU doing to understand if Artificial Intelligence apps are trustworthy? (Open Access Government), Rated: B
- Binance Launches Crypto Lending Service (CryptoGlobe), Rated: AAA
- Alternative Finance is Experiencing an Unprecedented Boom Worldwide (Crowdfund Insider), Rated: A
- The latest crowdfunding trend is in real estate (Born2Invest), Rated: A
- How and why the global centre of cryptocurrency moved back to Asia (Finder), Rated: A
- Australia/New Zealand
- Prospa Full Year 2019 Results (Scoop), Rated: AAA
- 2019 Finder Awards winners (Finder), Rated: AAA
- What future trends do you foresee in the startup ecosystem? (New India Express), Rated: AAA
- Xiaomi is moving into India’s consumer-lending market (Business Insider), Rated: A
- Furniture rental startup RentoMojo to raise Rs 27.7 Cr led by Samsung VC arm (YourStory), Rated: B
- IOU Financial Inc. Releases Financial Results for the Three and Six- Month Period Ended June 30, 2019 (PR Newswire), Rated: AAA
- Why and how peer-to-peer lending had to become market place lending (Business Live), Rated: AAA
Funding Circle Closes $ 198 Million Securitization to Support US Small Businesses (Valdosta Daily Times), Rated: AAA
Funding Circle today closed its first asset-backed securitization (ABS) of US small business loans originated through its platform. The $198 million deal marks the debut of Funding Circle’s US securitization sponsorship capability, and is the fifth securitization of Funding Circle business loans globally.
KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2019-P2 (Benzinga), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2019-P2 (“CLUB 2019-P2”). This is a $287.80 million consumer loan ABS transaction.
Preliminary Ratings Assigned: Consumer Loan Underlying Bond (CLUB) Credit Trust
Initial Class Principal
Swimming Pools Are a Highly Prized Amenity Amid the Summer Heat (LendingTree), Rated: AAA
A new LendingTree study ranks the 50 largest cities by its share of homes with a swimming pool. We found that about 10% of homes have pools, ranging from nearly 33% in Phoenix to 1% in Portland, Ore. We also looked at the values of homes with and without swimming pools to show how much this amenity is worth. Let’s dive in.
- You’ve gotta pay to play: The median home with a pool is valued at $469,187, while the median home without a pool is valued at $305,152 — a 54% premium. The highest premium is in Memphis at a whopping 157%.
- Go West: It’s no surprise that six of the top 10 cities for swimming pools are in the West — four in California and one each in Arizona and Nevada.
- Hot, hot, hot: Phoenix, which experiences more than 100 days above 100 degrees a year, leads the way with 32.7% of homes having a swimming pool.
- Sunshine State: Florida is not far behind California with three cities in the top 10. Miami, Tampa and Orlando rank second, third and fourth, respectively.
- Rain and water don’t mix: Two of the cities with the least swimming pools are in the rainy Northwest. Portland is in last place with just 1% of homes with pools, while Seattle is not far ahead with 1.3%.
Brex Teams With BigCommerce To Offer Merchant Financing (PYMNTS), Rated: A
Corporate eCommerce card company Brex has announced a partnership with leading SaaS eCommerce platform BigCommerce, according to a release.
Brex’s open credit line, three-month payment terms and interest-free financing are now available to all BigCommerce merchants through the BigCommerce App Store.
White Oak Commercial Finance Originates a Revolving Credit Facility to The Good Kitchen (Financial Content), Rated: B
White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today the origination of a new revolving credit facility to healthy meal service company The Good Kitchen. Originally founded as a meal delivery service, The Good Kitchen will use the proceeds of the credit facility to expand its business into packaged meals sold at 1,500 stores across the United States.
Lenders Moving Away From Small-Dollar Loans to High-Interest Installment Loans (Lexology), Rated: B
California non-bank consumer lenders are moving away from small-dollar short term payday loans and are, instead, embracing longer-term installment…
LendInvest reportedly shelves IPO plans for now (AltFi), Rated: AAA
Mobile banking apps in the UK are surging ahead of investment and insurance apps (Business Insider), Rated: A
Over three-quarters of consumers in the UK use a finance app, according to a new study from Speedie Consultants that surveyed 200 people in the country. Twenty-four percent of those surveyed use their finance apps around twice a week, and 23% said they use it daily. The most common finance app users were aged 25-45, in addition to consumers over 65.
Klarna launches VAR campaign created by 72andSunny (Prolific London), Rated: A
Swedish fintech payments firm Klarna has launched a new campaign focused around the introduction of Video Assistant Referee technology in the UK’s Premiere League.
Celsius Network Sees A 20x Increase In Deposits, However, Many Analysts Are Concerned (Bitcoin Exchange Guide), Rated: A
According to the latest press release, leading crypto lending firm Celsius Network has seen an increase of 2,165% growth in deposits. The network has already surpassed 20,000 BTC through mobile app deposits during the first year of operations.
New data reveals rapid growth in Peer-To-Peer lending is cannibalising High st bank market share (ResponseSource), Rated: A
Know Your Money data revealed that:
• Peer to Peer and Challenger lenders comparison searches have more than doubled in 3 years
• Alternative lending interest more than doubled in the last 2 years
Revolut Boosts Executive Leadership with New Hires from Traditional Banking (Crowdfund Insider), Rated: B
According to Revolut, the Fintech bank has hired Philip Doyle as Director of Financial Crime Risk, Wolfgang Bardorf as Treasurer and Stefan Wille as Deputy Chief Financial Officer.
Zurich-based Numbrs is the latest fintech to join the unicorn club (Business Insider), Rated: AAA
The Zurich-based fintech, whose investors include former Deutsche Bank CEO Josef Ackermann, raised $40 million at a valuation of over $1 billion, reports Bloomberg. The latest investment brings Numbrs’ total raise to date to almost $200 million, CEO Martin Saidler told the outlet.
Notably, in contrast to many of its peers, Numbrs has joined the unicorn club not by focusing on venture capital and private equity funding, but instead by relying mostly on individuals and families — 50 have invested in the company thus far. The startup’s app enables users to aggregate their various bank accounts and manage their finances, and offers a marketplace for consumers to purchase various financial products.
P2P Global Investments sells largest position for €250m (AltFi), Rated: A
The £1bn P2P Global Investments has sold one of its largest positions, in Castlehaven Finance, an Irish alternative development and bridging finance lender.
Castlehaven typically provides loans of between €1m – €20m in the property space, an increasingly big proportion of P2P GI’s portfolio.
The investment trust has provided financing in excess of €385m to Castlehaven since 2016.
What is the EU doing to understand if Artificial Intelligence apps are trustworthy? (Open Access Government), Rated: B
The University of Oxford received an immense £150 million donation to create a centre studying the ethics surrounding AI in the modern world, whilst global audiences continue to be fascinated by shows like Black Mirror which explore the worst-case consequences of AI accessing personal data.
The project is composed of three distinct, albeit related, parts, run in sequence from January 2019 to December 2020:
Part 1: Application of AI for risk management in bank and peer to peer lending
Part 2: Application of AI for risk management in financial investments and robot advisory
Part 3: Application of AI for risk management in blockchain payments and crypto assets
Binance Launches Crypto Lending Service (CryptoGlobe), Rated: AAA
Binance has launched a lending service allowing its users to earn cryptocurrency without trading, in a passive way. Currently the service is open for only a few tokens – its Binance Coin (BNB), Tether’s USDT stablecoin, and Ethereum Classic (ETC). Annualized interest rates are of 15% for BNB, 10% for USDT, and 7& for ETC.
Alternative Finance is Experiencing an Unprecedented Boom Worldwide (Crowdfund Insider), Rated: A
Ten years after the financial crisis, Alternative Finance continues to exhibit strong growth. The sector is estimated to account for nearly €300 billion of inflows worldwide, a market exhibiting 25% annual growth and largely dominated by the Chinese (75%), which percentage was already recorded in 2015 by a study conducted jointly by KPMG and the University of Cambridge.
The United States takes second place with 19% of the market, while Europe currently represents just 6%, 60% of which comes from the United Kingdom. In France, alternative finance raised €1.4 billion in 2018, a year-on-year increase of 39% according to the annual report of KPMG and the non-profit group Financement Participatif France (FPF).
The latest crowdfunding trend is in real estate (Born2Invest), Rated: A
The global crowdfunding market is estimated to be expanding from 2018 to 2022 to $89.72 billion. From the first recorded successful crowdfunding in 1997, to how the first dedicated crowdfunding platform ArtistShare had come about in the year 2000, crowdfunding has indeed disrupted many industries in different levels.
How and why the global centre of cryptocurrency moved back to Asia (Finder), Rated: A
The problem of investment scammers is much bigger than cryptocurrency though, Wong pointed out, and much bigger than Invest: Asia.
“I don’t think Invest: Asia is big enough to move the needle if you’re running a scam in China,” he said. “That just speaks to the size of the population in China. In general, I think there’s lots of financial scams in general in China, right? For example, a couple years ago there was a big peer to peer lending scandal.”
“The peer to peer lending was legitimately becoming a hot growth FinTech sector in China, but then people were running these peer to peer scams. Because it was so hot, everyone’s talking about it. It creates the conditions for scammers to launch whatever scheme that they want to launch.”
Prospa Full Year 2019 Results (Scoop), Rated: AAA
• FY19 loan originations of $501.7 million up 36.6% on the prior year (FY18: $367.3 million), 3.1% ahead of prospectus forecast.
• FY19 revenue of $136.4 million up 31.2% on the prior year (FY18: $104.0 million), in line with prospectus forecast.
• FY19 pro forma EBITDA of $6.8 million, ahead of prospectus forecast by 11.5%.
• Prospa has now delivered approximately $1.2 billion in loans since inception and total customer numbers in Australia and New Zealand grew to over 20,000 in FY19, up 58% on the prior year.
• Customer satisfaction remains consistently high, with Prospa’s annual average Net Promoter Score in excess of +77 in 2019. Prospa also has a rating of 9.8/10 on independent review platform TrustPilot.
• Business expansion has continued with the successful launch of new cash flow products and services and diversification into New Zealand.
• Further investment in executive strength, with new Chief Technology Officer, Chief Commercial Officer and Executive General Manager, Growth Channels appointed.
2019 Finder Awards winners (Finder), Rated: AAA
The 2019 Finder Awards recognise the market’s most competitive offerings across credit cards, home loans, personal loans, car insurance, banking, insurance, technology and superannuation.
What future trends do you foresee in the startup ecosystem? (New India Express), Rated: AAA
P2P lending has also become increasingly popular as an alternative lending route as small businesses find it easier to obtain loans directly from other individuals. Going forward, we can expect more cloud-based services backed by advanced analytics that offer personalized loan limits and payback schedules, based on the borrower’s credit history.
Traditional players will also get into online lending and emulate the strategies of P2P lending companies. More businesses will start adopting work-from-home policies to increase cost savings and productivity. On the tech front, businesses will start investing more in AI and analytics to get a deeper insight into customer behaviour.
– Kewal Kapoor, director and creative strategist of CHAI Kreative and Return of Million Smiles
Xiaomi is moving into India’s consumer-lending market (Business Insider), Rated: A
The fourth-largest mobile phone vendor plans to launch a consumer-lending business, dubbed Mi Credit, in India in the next few weeks, according to Reuters. It will offer loans of up to 100,000 rupees ($1,451), with interest rates starting at 1.8%.
Xiaomi is positioned as a leading smartphone manufacturer in India, with 70 million mobile phones in use throughout the country. It already launched its payment app, dubbed Mi Pay, in the country in March, which is reportedly “doing well,” per Reuters. For context, in China, Xiaomi’s lending business shows a loan book worth $8 billion.
Furniture rental startup RentoMojo to raise Rs 27.7 Cr led by Samsung VC arm (YourStory), Rated: B
In July 2019, the company secured Rs 1.16 crore from Renaud Laplanche, the Co-founder and CEO of Upgrade, who earlier participated in the startup’s Series C funding round of Rs 77 crore in May, along with Accel Partners, Chiratae Ventures, IDG Ventures, and Bain Capital. At that time, the startup said the funds will be used for accelerating its growth and expansion to new cities.
IOU Financial Inc. Releases Financial Results for the Three and Six- Month Period Ended June 30, 2019 (PR Newswire), Rated: AAA
- Loan originations increased 31.8% to US$38.5 million in Q2 2019 compared to Q2 2018.
- Total loans under management increased 36.4% to $101.0 million as at June 30, 2019 compared to the same period in 2018.
- Adjusted gross revenue increased 25.1% to $5.5 million in Q2 2019 compared to Q2 2018.
- Adjusted Operating Expense Ratio decreased to 10.0% in Q2 2019 compared to 11.9% in Q2 2018.
- Adjusted net earnings amounted to $0.3 million in the second quarter of 2019, representing the sixth consecutive profitable quarter. Adjusted net earnings amounted to $0.8 million year-to-date.
Why and how peer-to-peer lending had to become market place lending (Business Live), Rated: AAA
The linked dangers of an inverted yield curve and a slowing economy have hammered banks stocks in recent months, and profit margins are already compressing. But the banks’ worries pale in comparison to challenges confronting the peer-to-peer or “market place” lenders — the start-ups that have set out, over the past decade or so, to upturn the banking industry.