- Today’s main news: Affirm debuts shopping app. Zopa profits tick upward. RateSetter recovering from loan scandal. PPDAI stock rises 7% with lift in institutional-funded loans. Oportun ends Nasdaq debut with 8% gain. Australia: RBA cuts interest rates, online lenders follow.
- Today’s main analysis: The Future of Finance: Marcus, Neobank, and fintech. (A MUST-READ)
- Today’s thought-provoking articles: Peter Renton’s quarterly marketplace lending results. Loans for sneakers. Lessons learned from LendIt Fintech Europe. What’s happening in fintech worldwide.
- Affirm debuts new app for shoppers. The app allows consumers to shop and check out with “virtually any retailer.” This Business Insider article highlights Affirm’s need to step up its game in order to compete with Amazon, 66 percent of whose customers begin their search for new product at Amazon. Affirm will have to offer better deals for consumers and make it easy to purchase things. With Affirm’s relationship with Walmart, that shouldn’t be too much of a challenge. However, it will be a challenge.
- Affirm app allows for bill splitting.
- Interview with Max Levchin, founder and CEO of Affirm.
- OnDeck survey indicates small businesses are concerned about economy. Old news, still interesting.
- Marcus, jobs, the economy, housing prices, and Oportun. From PeerIQ, well worth the read.
- Peter Renton’s quarterly MPL results. For Q2 2019. Always interesting to read how Renton’s investments have been doing. With lots of charts.
- The rose of “loans for sneakers” as a business. The focus is on Afterpay, an Affirm competitor, but this is a good read because it tackles POS lending from a consumer’s perspective. Insightful and interesting.
- What happened to Borro?
- Auto, home equity are soft spots in consumer lending.
- Maker offers multi-collateral DAI lending.
- A $40 billion pile of leveraged loans battered by huge losses.
- CFPB ruling shorts debt collectors.
- The SEC is hiring a data chief.
- Voyager selects Celsius Network for asset management.
- Zopa’s profits tick upward.
- Zopa says 9 out of 10 shoppers are confused by car finance options.
- RateSetter recovering from loan scandal.
- Wonga customers average 118 GBP payout.
- Savvy secures 20 million GBP funding facility.
- Interview with founder of Blend Network.
- Crowdfunding options for startups explained.
- Lessons learned from LendIt Fintech Europe.
- Linked Finance launches ‘Beyond Brexit’ business loans.
- ID Finance to double revenues within two years.
- Binance launches next phase of crypto lending program.
- What’s happening in the fintech revolution worldwide. A great read with interesting charts.
- Marcus, Neobank, and fintech developments. This is today’s must-read. Very detailed with lots of charts, but the focus is mostly on digital banking. Still, a very good read.
- Blockchain: The future of finance.
- China: PPDAI stock soars 7% on institutional-funding lending increase.
- Australia: RBA cuts rates. Online lenders do too.
- Australia: loans.com.au cuts rates.
- Bahrain: Beehive funds first SME.
- Malaysia: The risks and rewards of SPV 2030.
- Australia: OnDeck appoints national broker chief.
- Canada: BFS Capital opens data science and engineering hub in Toronto.
- United States
- OnDeck Survey: Economy is Top Concern for Small Businesses Ahead of 2020 Election (New Kerala), Rated: AAA
- Affirm debuted a new app encouraging customers to start their shopping journeys with it (Business Insider), Rated: AAA
- Affirm ships new shopping and bill splitting app (Finextra), Rated: A
- Max Levchin On The Future-Present Of Everywhere POS Lending (PYMNTS), Rated: A
- Latest Macro; latest from Marcus; Oportun goes IPO (PeerIQ), Rated: AAA
- My Quarterly Marketplace Lending Results – Q2 2019 (Lend Academy), Rated: AAA
- The Maybe-Dubious Rise of the Loans-for-Sneaker Business (GQ), Rated: AAA
- What Happened to Borro? (deBanked), Rated: A
- Auto, home equity are soft spots in consumer lending (American Banker), Rated: A
- Finally! Maker Offers Multi-Collateral DAI Lending (Cryptovest), Rated: A
- A $ 40 Billion Pile of Leveraged Loans Is Battered by Big Losses (Bloomberg), Rated: A
- Ruling cuts short debt collectors’ victory lap over CFPB proposal (American Banker), Rated: B
- The SEC is hiring a chief data officer (Business Insider), Rated: B
- Voyager Selects Celsius Network to Manage Certain Assets (AP News), Rated: B
- United Kingdom
- Zopa’s P2P profits tick up but group losses widen due to heavy investment in bank (P2P Finance News), Rated: AAA
- Zopa: nine in 10 shoppers confused by car finance options (Verdict), Rated: A
- Ratesetter recovering from loan scandal (The Times), Rated: AAA
- Wonga customers’ average compensation payout may be just £118 (The Guardian), Rated: A
- Payday loan alternative Savvy secures £20 million funding facility (Finextra), Rated: A
- MEET THE FRENCHMAN WHO WANTS TO SOLVE THE UK’S HOUSING CRISIS (Business Leader), Rated: A
- Crowdfunding a start up options explained for businesses and investors (What Investment), Rated: A
- Landlords wary of tax changes (Money International), Rated: A
- PPDAI Stock Soars 7% on Increase in Institutionally-Funded Loans (Capital Watch), Rated: AAA
- European Union
- What we learned at this year’s LendIt Fintech Europe (Business Insider), Rated: AAA
- Linked Finance launches ‘Beyond Brexit’ business loans (Bridging and Commercial), Rated: A
- ID on track to double revenues as it eyes €300m+ of revenue within 2 years (Fintech Finance), Rated: A
- Binance Launches New Lending Program Phase (CoinCodex), Rated: A
- A Guide to What’s Happening in the Fintech Revolution (Bloomberg), Rated: AAA
- Goldman’s $ 1.3B Marcus burn, Neobank £200MM loss; plus 14 short takes on top developments (Lex), Rated: AAA
- Blockchain: the future of finance (Financier Worldwide), Rated: A
- Hot home loan rates starting with a 2 (mozo), Rated: AAA
- loans.com.au jumps on October RBA home loan rate cut party (mozo), Rated: AAA
- OnDeck appoints Robbie Fidler as new national broker chief (IT Wire), Rated: B
- SPV 2030: Sharing of risks and reward (The Malaysian Reserve), Rated: A
- Beehive funds first SME in Bahrain (Arabian Business), Rated: AAA
- BFS Capital Opens New Data Science and Engineering Hub in Toronto (Financial Post), Rated: B
OnDeck Survey: Economy is Top Concern for Small Businesses Ahead of 2020 Election (New Kerala), Rated: AAA
OnDeck today announced the results of a national survey of U.S. small business owners that finds economic issues are the most important factors in determining their choice for president in 2020.
- Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
- Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
- 57% of small businesses surveyed said they were either Very Optimistic or Somewhat Optimistic about the economic outlook for their businesses;
- 93% of those surveyed said they plan to vote in the 2020 election.
- 60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.
Affirm debuted a new app encouraging customers to start their shopping journeys with it (Business Insider), Rated: AAA
The point-of-sale (POS) financing provider
Affirm ships new shopping and bill splitting app (Finextra), Rated: A
Affirm’s app also allows consumers to pay at any brick-and-mortar store that accepts Apple Pay or Google Pay, which is increasingly important as 24% of consumers want the flexibility to look online and shop in-store.
Those with Apple Pay or Google Pay enabled have also seen up to 14% of transactions driven in-store, making the Affirm app a rare omnichannel solution for customer acquisition.
Max Levchin On The Future-Present Of Everywhere POS Lending (PYMNTS), Rated: A
Since Affirm’s launch, the landscape in the POS space is radically different than it was when Affirm entered. It is, first and foremost, a much bigger and more populated space than it once was. Other startups have come to the field — Afterpay, Uplift and Sezzle for example — but also bigger and more established names in financial services. In the last 12 months alone Square, Mastercard, PayPal and Chase have all rolled out POS installment lending products or enhancements as the market continues to pick up popularity among consumers, particularly younger ones.
Latest Macro; latest from Marcus; Oportun goes IPO (PeerIQ), Rated: AAA
Q4 is off to a brisk start. The jobs report released this past Friday shows 114K in net new jobs (vs expectations of 120K), generally flat wages, and a drop in the unemployment rate to 3.5%.
On the one hand, the US economy is near ‘stall speed’ – around 1 to 1.5% growth rate.
House prices are expected to rise 5.8% over the next year due to low mortgage rates.
Two major financing announcements this week. FinTech lender, Oportun, led by CEO Raul Vazquez, ends its Nasdaq debut with an 8% gain. The debut is notable as it represents a positive shift in the sentiment to the reception of lenders to the IPO market.
My Quarterly Marketplace Lending Results – Q2 2019 (Lend Academy), Rated: AAA
The upward trend in my returns continued in Q2, making it the fifth quarter in a row with increasing returns. My preliminary return for the 12 months ending June 30, 2019 is 6.20% (one investment is still not final), the best I have achieved since Q3 2017.
The Maybe-Dubious Rise of the Loans-for-Sneaker Business (GQ), Rated: AAA
Afterpay is one of a number of platforms that have sprouted up over the past couple years that are willing to float customers a couple hundred or thousand dollars to shop. In addition to it, there are Affirm, Sezzle, Klarna, and Quadpay. They are positioned as a more consumer-friendly option than credit cards, a whole host of services bent on—because this is 2019—disrupting the powers that be.
Globally, Afterpay, which launched in Australia, has over 4.6 million customers and 35,000 retail partners. In the U.S., where Afterpay only launched in May of last year, it has two million customers and is available at 6,500 retailers. Over three million people use Affirm, while another 500,000 have shopped with Sezzle.
Silicon Valley promises aside, Afterpay is, at best, a platform that allows you to take out what amounts to a small loan on an item. After an approval process—Afterpay does not check a credit score; others like Affirm do—the customer pays a fourth of the price upfront and the rest is paid off in three equal installments every two weeks.
Also new is the $1,500 limit, up from $500, that Afterpay raised after Hyde-McCormick proved himself a responsible shopper and the $87.50 payments currently due every two weeks.
What Happened to Borro? (deBanked), Rated: A
In 2013, Borro, an innovative online lending company that was poised to disrupt pawn shop lending forever, invited me to their stylish offices at 767 Third Avenue in Manhattan.
Borro made $50 million worth of such loans in 2013 and doubled that number in 2014.
Auto, home equity are soft spots in consumer lending (American Banker), Rated: A
In its quarterly report that tracks consumer delinquency trends, the American Bankers Association said that 30-day past-due rates ticked up in eight of 11 categories in the second quarter when compared with the first quarter, but stressed that delinquencies remain well below historic norms.
Finally! Maker Offers Multi-Collateral DAI Lending (Cryptovest), Rated: A
Maker DAO, the most active decentralized finance app on the Ethereum network, has announced a date for its long-awaited multi-collateral DAI generation. According to observers, November 18 may be the date MKR starts accepting other assets as collateral.
Multi-collateral DAI creation has the potential to be riskier in comparison to ETH-based models. Currently, Maker is deliberately over-collateralized at above 300%, with the minimum at 150%, due to the high volatility of crypto assets.
A $ 40 Billion Pile of Leveraged Loans Is Battered by Big Losses (Bloomberg), Rated: A
Loans tied to more than 50 companies have lost at least 10 percentage points of face value in just three months, according to data compiled by Bloomberg. Some have dropped a lot more, with lenders lucky to get back just two-thirds of their investment if they tried to sell.
Energy is the hardest-hit sector on the list, with more than $12 billion of loans falling more than 10 cents on the dollar. Consumer and health care follow, comprising around $8 billion and $5 billion of loans outstanding, respectively.
The SEC is hiring a chief data officer (Business Insider), Rated: B
The Securities and Exchange Commission is hiring its first chief data officer, according to a job posting for the role.
Voyager Selects Celsius Network to Manage Certain Assets (AP News), Rated: B
Voyager Digital, LLC, a subsidiary of publicly-traded Voyager Digital (Canada) Ltd (Ticker VYGR.CN), an industry-leading best execution crypto asset broker, today announced a partnership with Celsius Network, in which Celsius will manage a portion of Voyager’s digital assets.
Zopa’s P2P profits tick up but group losses widen due to heavy investment in bank (P2P Finance News), Rated: AAA
Zopa Group – which incorporates the P2P platform and upcoming digital bank – reported a pre-tax loss of £18.295m for the year ended 31 December 2018, compared to a pre-tax loss of £5.536m the previous year.
Zopa: nine in 10 shoppers confused by car finance options (Verdict), Rated: A
In a survey of 2,000 consumers, 47% of people who had recently bought a car with finance are unable to identify which type of finance deal they signed up for. Zopa estimates that the average car buyer could save up to £11,000 over the course of their lifetime by working out the best finance deal available.
Wonga customers’ average compensation payout may be just £118 (The Guardian), Rated: A
Customers who were mis-sold loans by the collapsed payday lender Wonga are expected to receive less than 10% of what they are owed in compensation after administrators revealed that only £41m will be put aside for claimants.
Payday loan alternative Savvy secures £20 million funding facility (Finextra), Rated: A
Stockport and Wilmslow based fintech company Savvy.co.uk is to create 25 jobs after securing a £20 million investment.
MEET THE FRENCHMAN WHO WANTS TO SOLVE THE UK’S HOUSING CRISIS (Business Leader), Rated: A
WHY DID YOU START BLEND NETWORK?
I started working in the financial industry as an FX trader before moving to trading gold and copper, both much more inefficient markets than FX. I realised that the UK property market was a hugely inefficient market in the sense that lenders and borrowers are not meeting. On the one hand, you have very experienced property developers across the country who are trying to access funds to build homes but traditional lenders are no longer active in providing development finance.
Instead, we lend in places such as Coventry, East Anglia, Doncaster, Northern Ireland. Northern Ireland is a very good example of our strategic approach to lending. Last year, we did around 80-85% of our business in Northern Ireland.
Crowdfunding a start up options explained for businesses and investors (What Investment), Rated: A
Crowdfunding a start up brings to mind the statement ‘Nothing worth having comes easy’, never truer than in the case of launching a start-up. Getting a new business off the ground will often require capital. Something which a lot of people don’t know how to go about getting.
- Reward based crowdfunding;
- Equity based crowdfunding;
- Debt based crowdfunding, and
- Donation based crowdfunding.
Landlords wary of tax changes (Money International), Rated: A
Half of the 200 landlords approached agreed tax changes and tougher mortgage borrowing criteria have thwarted their plans to buy more properties, while 15% admitted they had been put off buying homes to rent.
A third who still wanted to invest are considering a switch from buy to let to peer-to-peer lending secured against property, while 8% have already done so.
PPDAI Stock Soars 7% on Increase in Institutionally-Funded Loans (Capital Watch), Rated: AAA
The stock in PPDAI Group Inc (NYSE: PPDF) closed 7% higher on Wednesday, at $2.83 per American depositary share, after it announced a positive trend in funding of loans by its institutional partners and increased loan origination volume.
For the third quarter, the Shanghai-based company, which operates an online consumer finance marketplace, said in a statement on Wednesday that the volume of loans facilitated by its institutional funding partners jumped to $2.64 billion, up 91% from the second quarter. Total loan origination volume was above PPDAI’s guidance, it said, as it reached $3.51 billion, up 14% from the previous quarter.
What we learned at this year’s LendIt Fintech Europe (Business Insider), Rated: AAA
At the conference, Business Insider Intelligence identified four emerging themes that we expect to set the tone for the space for the next year: further proliferation of partnerships between banks and fintechs, increased focus on digital banks’ sustainability, accelerated innovation and disruption from small- and medium-sized business (SMB) lenders, and more challenges ahead for the UK’s P2P lenders.
- CYBG bank and price comparison site GoCompare recently partnered to offer an energy compare and switch service for all of CYBG’s B customers.
- Barclays bank partnered with SMB finance fintech MarketInvoice last year to give Barclays’ SMB clients access to MarkeInvoice’s solutions.
- French Banking-as-a-Service platform Treezor was acquired by Société Générale last year, as the bank looked to enhance its ability to innovate and decrease time to market.
Linked Finance launches ‘Beyond Brexit’ business loans (Bridging and Commercial), Rated: A
The new 18-month loan period will allow borrowers to access working capital facilities of up to €300,000 (approximately £265,194) in just 24 hours.
ID on track to double revenues as it eyes €300m+ of revenue within 2 years (Fintech Finance), Rated: A
ID Finance, the fintech operating in Europe and Latin America, saw revenue growth of over 100% in the first 9 months of 2019 and is on track to double its revenues to €90m revenue this year. The data science, credit scoring and digital finance company is now planning its first equity crowdfunding round via Crowdcube as it targets €300m+ of revenue within 2 years.
Binance Launches New Lending Program Phase (CoinCodex), Rated: A
The Binance cryptocurrency exchange has launched the latest phase of its relatively new lending program. For the program’s eighth installment, Binance is sticking with the model of short-term loans, as users only have to commit their crypto for 14 days.
A Guide to What’s Happening in the Fintech Revolution (Bloomberg), Rated: AAA
These underbanked markets, led by countries in Asia and Africa, have inspired fintech innovation that’s leapfrogging the technology available in the developed world. Ant Financial Services Group’s Alipay and Tencent Holdings’ WeChat Pay in China, Paytm in India, and Safaricom’s M-Pesa in Kenya are some well-known examples.
Take Facebook Inc.’s plan to launch a digital currency called Libra in 2020. The social network’s gigantic reach—more than 2.4 billion active monthly users—could draw a much wider audience to Libra than has used previous cryptocurrencies. For instance, global remittances by migrants reached a record $689 billion last year, according to the World Bank.
San Francisco-based 500 Startups staked 43 such companies in the 12 months ended June 30.
Goldman’s $ 1.3B Marcus burn, Neobank £200MM loss; plus 14 short takes on top developments (Lex), Rated: AAA
Goldman is losing $1.3 billion on Marcus, trying to build a Fintech leader. Etrade is going to lose $75 million from cutting trading fees to $0 to keep up with Robinhood. Revolut is losing £35 million on £60 million in revenue, with another £140 million burned by Atom, Monzo, Tandem, and the rest.
Generally speaking, from a deposit point of view, these are still all small businesses at £1 billion in assets (e.g., Betterment manages $20 billion).
The first is that the Robinhoods and Monzos of the world are 10x overpriced relative to the payments apps. I can sort of buy this — though money in motion is way easier to capture than money at rest. The second is that venture investors think a finance user is worth $1,500 in a digital bank.
Blockchain: the future of finance (Financier Worldwide), Rated: A
Recent examples of blockchain’s impact on financial markets go well beyond these initial applications or P2P lending or crowdfunding.
The first wave of applications in finance and banking is being driven by easily achievable gains in actively traded assets.
MasterCard incorporated a blockchain payment system providing vendors real time, lower cost settlements on cross-border transactions. Representing a consortium of more than 40 of the world’s largest banks, fintech firm R3 launched a payment system built on DLT platform Corda, to expedite intra-bank transfers.
St. Regis Aspen, a Colorado resort, is a partnership formed with a crowdfunding site, Indiegogo, that in lieu of a traditional IPO completed a private placement via DLT financing real estate. This sale of ‘tokens’ – fractional interests in the underlying property – raised $18m, compliant with securities laws.
Hot home loan rates starting with a 2 (mozo), Rated: AAA
The RBA has cut official interest rates for the third time this year, and already a handful of lenders have responded by slashing rates across their range of variable rate home loans. Right now, if your home loan doesn’t have a ‘2’ in front of it, you’re missing out.
OnDeck appoints Robbie Fidler as new national broker chief (IT Wire), Rated: B
Online SME lender OnDeck Australia has appointed experienced commercial lending operator Robbie Fidler as its national broker channel manager.
SPV 2030: Sharing of risks and reward (The Malaysian Reserve), Rated: A
BFS Capital Opens New Data Science and Engineering Hub in Toronto (Financial Post), Rated: B
BFS Capital, a leader in small business lending, has officially launched a data science and engineering hub in Toronto as the company accelerates its plans to develop best-in-class digital financial products for small businesses across the globe.
The concept of crowd funding really came to the fore with the passing of the Jobs Act of 2012. The Act relaxed regulations for private funding and encouraged businesses and startups to raise money from private investors through online portals. As per a Massalution report, the real estate crowd funding industry was valued at $1 billion […]
The concept of crowd funding really came to the fore with the passing of the Jobs Act of 2012. The Act relaxed regulations for private funding and encouraged businesses and startups to raise money from private investors through online portals. As per a Massalution report, the real estate crowd funding industry was valued at $1 billion in 2014, $2.5 billion in 2015, and is projected to reach more than $300 billion by the end of year 2025. By combining online crowdfunding, technology, and real estate, platforms are providing comparatively small investors the opportunity to partake in much larger real estate deals that they would otherwise never get to invest directly.
A Look at ArborCrowd Services
The company came up with its first deal, 1413 York Avenue, in 2016. After a successful launch, they launched six more deals and generated $20 million in equity capital to finance multifamily real estate projects.
Multifamily properties have the ability to generate healthy returns and survive in adverse market cycles because of the low level of risk involved. According to the founders, a new generation of investors will find it a secure way of investing in real estate.
ArborCrowd investors co-invest with a network of professional sponsors having an extensive knowledge base. Each deal is financed with different amount of contribution from sponsors ranging from 30% to 80% while the share of crowdfunding investors is dependent upon projected IRR of each project. The company has built strong relationships with industry leaders over the years as it has worked with institutional investors.
Crowdfunders’ pool of money is invested in capital stacks of $2 to $6 million. Sponsors at Arbor bring money up-front and raise the balance from accredited investors. This assures the viability of the project to outside investors. The minimum investment per deal is $25,000. All investors are invited to invest on a deal basis so they can analyze where there money is being invested. The company aims for an IRR from 10%-15% for its projects.
Philosophy on Debt Investing
P2P lending, or debt crowdfunding, is the traditional method of arranging finance for customers and businesses. Despite offering steady income and priority of payment over other capital stacks, real estate debt crowdfunding is considered risky by ArborCrowd’s founding team. Most of the tech companies that offer debt on their RECF platforms are operating in a precarious environment. Debt investors sacrifice the potential of higher returns, which can be enjoyed only in equity financing, whereas faltering projects can usually wipe out equity and debt investors.
How ArborCrowd Works
Sponsors approach ArborCrowd with investment deals that are best suited for crowdfunding. Market presence of group companies including Arbor Realty Trust, Arbor Commercial Mortgage, and AMAC has helped ArborCrowd leverage their relationships with industry leaders. The whole group is determined to deliver one-stop solutions customers. The entire procedure of sourcing, underwriting, and closing the deal takes approximately one month, after which the distribution takes place.
The current strategy is to partner with people having extensive industry experience and a sound track record. People interested in crowd investments can register on the company’s online portal and download the details about the business plan as well as current and past deals financed to get an idea about the underwriting process.
Investors participate in the deals through effective marketing techniques including email, marketing pitch design, and organizing webinars while focusing on providing them with the best-sourced deals and sponsors.
ArborCrowd offers these investment opportunities to only accredited investors and ensures a proper vetting of these prospective clients. The process of online verification takes one hour for potential investors.
Each ArborCrowd project is tested on different parameters depending upon the nature of the underlying property. Most money lending institutions use inappropriate tools to evaluate each deal. Automated analytical tools are helpful in this regard, but no algorithm can replace the human touch. Arbor brings its management’s decades of experience and industry contacts to ensure that it can capture the deal first.
Who Are ArborCrowd Investors?
The company’s investor ecosystem includes tech millionaires, investment clubs analyzing different real estate opportunities in multiple markets, and real estate brokers. The founders shared an experience where an investor took out his life insurance money to invest with the platform. This highlights the trust the ArborCrowd brand name has in the market.
Who Are ArborCrowd?
ArborCrowd, a part of Arbor family of real estate companies that include Arbor Realty Trust, Inc. (NYSE: ABR), Arbor Commercial Mortgage, and Arbor Residential Mortgage, is focused on providing diversified real estate investment opportunities to accredited investors. Their deals are sponsored by sophisticated and experienced real estate deal makers and were previously available to only institutional and high net worth individuals. All the documents and reports related to financial projections, timelines, and business plans are made available to the investors to enhance transparency and build investor confidence.
Ivan and Adam Kaufman founded ArborCrowd with a motive to source investors in real estate through the amalgamation of technology and crowd funding. In the initial phase of real estate crowdfunding (RECF), the father-son team consciously stayed out of RECF. They were happy to let other tech-focused startups enter the space first. Their aim was to understand how the market evolved online and learn the best practices jumping into a nascent industry. In 2016, they entered the market with their own product offering.
Their ArborCrowd ethos involves a real estate company leveraging technology as opposed to a technology company leveraging real estate. The founders are experienced operators in the field and understand the nuances that will act as a moat to their business.
CEO and Co-Founder Ivan Kaufman has more than three decades of experience working in residential and commercial real estate. His background in mortgage loans, asset management, and real estate financing is an important asset to the company. His background and the Arbor brand name help attract top quality sponsor and marquee real estate deals.
Adam has worked with leading technology and real estate companies and has experience in marketing and business development.
ArborCrowd is privately owned and no outside investors other than the Arbor Group has a stake in the crowdfunding platform.
The Future of Real Estate Crowdfunding
Introduction of advanced tools, a growing fintech world, and a massive demand for online and user-friendly platforms assisting people to access commercial real estate transactions is expected to reshape the real estate industry. The long-term vision of the company is not to just increase the quantity of projects financed through its platform, but to be known for financing viable projects concentrating on quality.
Written by Heena Dhir.
News Comments Today’s main news: How SoFi, Robinhood trick investors into saving money. The highest paying green IFISAs. Ant Financial’s $10B fundraising is oversubscribed. HashChing gets $700K loan. Today’s main analysis: Alternative loan borrowers may be traditional prospects. Today’s thought-provoking articles: The challenges online lenders would face in a recession. Crowdfunding in Switzerland is at a record high. Only 4% […]
- Today’s main news: How SoFi, Robinhood trick investors into saving money. The highest paying green IFISAs. Ant Financial’s $10B fundraising is oversubscribed. HashChing gets $700K loan.
- Today’s main analysis: Alternative loan borrowers may be traditional prospects.
- Today’s thought-provoking articles: The challenges online lenders would face in a recession. Crowdfunding in Switzerland is at a record high. Only 4% of Indians get easy bank, NBFC personal loans.
- How SoFi, Robinhood trick users into saving, making money. For online lenders, web design is of supreme importance. A website that looks amateurish will not appeal to users, but a major part of any web development is user experience. The same goes for financial apps. If you can’t get the user to click a button, you will fail.
- Alternative loan borrowers make good traditional loan prospects. There are many reasons why people may seek an alternative loan. It isn’t always because they have bad credit. Even if it is, alternative loans can improve credit enough that the borrower can then qualify for a traditional loan. Don’t underestimate your own importance.
- The unique challenges online lenders would face in a recession. Online lenders have yet to be tested by negative economic forces. It’s important to think about how the business model would work in a recession.
- Review of PeerStreet.
- Kabbage sees more mobile lending, minority-owned businesses looking for loans. That’s good.
- Expect more bank mergers after Dodd-Frank rollback. What’s important for alternative lenders to think about is, what kind of competitive pressure would that put on the sector after such mergers occur?
- Vermont passes first law to regulate data brokers.
- The highest paying green IFISAs.
- Could savers be given access to multiple IFISAs each tax year?
- Rage against robo-advisors.
- Interview with Christian Faes of LendInvest. Lend Academy podcast.
- Crowdfunding faces withholding tax clampdown.
- Can Dot help real estate agents sell more homes.
- FCA urged to extend cap on payday loan fees to other forms of credit.
- Ant Financial’s fundraising is oversubscribed.
- Traditional banks can be trusted face of online finance firms.
- Crowdfunding hits all-time high in Switzerland.
- Hungary is ready to join the global blockchain market, including P2P lending.
- 4% of Indians get easy personal loans from banks, NBFCs.
- How investors invest in startups.
- Xiaomi launches Mi Credit.
- United States
- Designers at SoFi, Robinhood explain how they trick users into saving (and making) money (Business Insider) Rated: AAA
- Alternative loan borrowers may be traditional prospects (Banking Exchange) Rated: AAA
- The Unique Challenges Online Lenders Would Face In A Recession (Forbes) Rated: AAA
- PeerStreet Review 2018 – Real Estate Crowdfunding Platform (Dough Roller) Rated: A
- Kabbage Sees More Mobile Lending, Women and Minority Owned Businesses Seeking Funds (Small Business Trends) Rated: A
- Expect More Bank Mergers After Dodd-Frank Rollback (Barrons) Rated: A
- Vermont Passes First-of-Its-Kind Law to Regulate Data Brokers (Gizmodo) Rated: A
- United Kingdom
- The highest paying green IFISAs of 2018/19 (Peer2Peer Finance) Rated: AAA
- Could savers be given access to multiple IFISAs each tax year? (Peer2Peer Finace) Rated: A
- Rage against robo-advice machines (FT Adviser) Rated: A
- Christian Faes of LendInvest (Lend Academy) Rated: A
- Crowdfunding faces withholding tax clampdown (The Times) Rated: A
- Can this lending buy-to-let startup help agents sell more homes? (The Negotiator) Rated: A
- FCA urged to extend cap on payday loan fees to other forms of credit (The Guardian) Rated: B
- China: WeiyangX Fintech Review (Crowdfund Insider) Rated: AAA
- Traditional banks can be the ‘trusted face’ of fintech and online finance firms (South China Morning Post) Rated: A
- European Union
- Crowdfunding in Switzerland at Record High: CHF 375 Million (PR Newswire) Rated: AAA
- Hungary ready to join the global blockchain market (Budapest Business Journal) Rated: B
- Mobile ventures to take on payments (Daily Sabah) Rated: A
- Cryptocurrency Cap Waiting to be Unlocked by Lenders (The Merkle) Rated: A
- Mortgage marketplace receives $ 700k loan (Australian Broker) Rated: AAA
- Only 4% Indians get easy personal loans from banks and NBFCs (Sify Finance) Rated: AAA
- How do Investors Invest in Startups – From a Venture Capitalist’s Point of View (Entrepreneur India) Rated: A
- Xiaomi Launches Mi Credit, A Lending Marketplace Exclusively for MIUI Users (BW Disrupt) Rated: B
- Kenya moves to regulate fintech-fuelled lending craze (Reuters) Rated: AAA
- Russia Has Significant Opportunity to Advance Financial Tech Services – Analyst (Sputnik International) Rated: AAA
- RentSher — a firm with a hire purpose (Gulf News) Rated: AAA
- Reaping the fruits of hard work (Khaleej Times) Rated: B
Designers at SoFi, Robinhood explain how they trick users into saving (and making) money (Business Insider) Rated: AAA
- Personal finance apps have gained traction with customers — especially millennials — thanks to the ease with which they let users sock money away, save towards big goals, and make big purchases more possible.
- From the loan refinancing company SoFi to the stock trading platform Robinhood, many of these companies are now worth billions of dollars thanks to enthusiastic investors.
- At the heart of their success: A good product which combines smart design with financial psychology to convince users to meet the goals they set for themselves.
- Here’s how the best companies in fintech design their apps to convince users to save and make money.
Alternative loan borrowers may be traditional prospects (Banking Exchange) Rated: AAA
The latest example of this comes from a new study by TransUnion that indicates that some borrowers who use “alternative loans” may actually be good candidates for traditional consumer credit products.
Alternative loans typically don’t appear in traditional credit bureau files. These services include short-term debt, such as “payday loans”; point-of-sale finance offered by retailers or third-party lenders; virtual “rent-to-own” finance; and auto-title loans.
Release coincides with OCC announcement
Elizabeth Pagel, vice-president, market strategy, consumer lending at TransUnion, notes that while many consumers in the FactorTrust database of alternative loan users skew subprime, nearly 40% are not subprime credits, and 12% are actually prime or above.
One example given by TransUnion demonstrating the general pattern concerns near-prime borrowers (those with VantageScore 3.0 credit scores of 601-660):
• About 14% of those borrowers with only one short-term loan went 90 days or more past due on a traditional account 12 months later.
• The delinquency level fell to less than 12% when a consumer possessed two alternative loans.
• The delinquency level fell to about 9% when a consumer had eight or more alternative loans over the course of seven years.
The Unique Challenges Online Lenders Would Face In A Recession (Forbes) Rated: AAA
Technology has reshaped the lending industry over the last decade. Companies like Lending Club, Prosper and SoFi built billion dollar business (even if valuations have come down from their respective peaks) by better connecting lenders to borrowers and streamlining what was previously a slow and bloated consumer lending process. Dozens more companies have launched in their wake and are contributing to this wave of change. In fact, TransUnion data shows that fintech lenders now account for over a third of personal loan origination by volume. That Goldman Sachs launched their own online lending business, Marcus, shows that much of this change is here to stay.
But these businesses have all come of age during an unprecedented period of economic expansion and low default rates. Low defaults have helped performance, while low yields in other asset classes have driven up investor demand for higher yielding personal loans.
PeerStreet Review 2018 – Real Estate Crowdfunding Platform (Dough Roller) Rated: A
Some real estate investors come to the platform looking for financing, while others come looking for above average returns on their money.
The difference is that while other P2P platforms provide personal loans to individuals, PeerStreet supplies financing for real estate transactions. The purpose of the platform is to make these sophisticated investments in commercial real estate available to ordinary investors.
The loans are generally short-term, between six months and 24 months. They also have conservative loan-to-value (LTV) ratios, of not more than 75% of the value of the underlying property.
Types of loan investments include:
- Single-family residential buy-to-rent properties
- Single-family refinances
- Single-family Value Add (This is a property that is purchased then renovated for sale, sometimes referred to as a fix-and-flip loan.)
- Bridge loans
Kabbage Sees More Mobile Lending, Women and Minority Owned Businesses Seeking Funds (Small Business Trends) Rated: A
Online lending platform Kabbage says it sees more mobile lending, more women and minority owned businesses seeking loans and more businesses from rural and lower to middle income communities too.
Today 140,000 small businesses use Kabbage. Today, Kabbage has delivered over $4.5 billion in funding, moving the loan process from long lines at a physical bank to a shorter wait on mobile or the web.
Expect More Bank Mergers After Dodd-Frank Rollback (Barrons) Rated: A
But the legislation known as the Crapo bill (named after Idaho Sen. Mike Crapo), which President Donald Trump signed into law on Thursday, could provide another boost to bank investors by unleashing mergers, dividend increases, and buybacks among regional and local banks.
The highest paying green IFISAs of 2018/19 (Peer2Peer Finance) Rated: AAA
So in alphabetical order, here are the highest-paying P2P green IFISAs available right now…
- Target returns for IFISA: 3-15 per cent
- Target returns for IFISA: 3-7.6 per cent
Goji and Prestige-Prime Group
- Target returns for ISA: 6.5-8.3 per cent
- Target returns for IFISA: 5-7 per cent
Ethical bank Triodos launched its own P2P platform earlier this year, named Triodos Crowdfunding. Within the first few months of the year it had already funded seven projects, four of which were IFISA eligible.
Could savers be given access to multiple IFISAs each tax year? (Peer2Peer Finace) Rated: A
The Office of Tax Simplification (OTS) – an independent adviser to the government on simplifying the tax system – has said ISA rules should be made more simple for investors to administer.
It suggests changing the rule where only one type of ISA can be opened at a time and instead letting savers hold multiple products, such as more than one Innovative Finance ISA from different peer-to-peer lenders or a variety of cash ISAs, as long as they remain within the annual allowance.
Rage against robo-advice machines (FT Adviser) Rated: A
Despite the FCA offering this assistance now the regulator has found several causes for concern in the robo-advice that is being given to clients.
The watchdog revealed some robo-advice firms were failing to properly disclose prices and services, and crucially, the regulator flagged risks clients were not receiving suitable advice.
As a result, the FCA has required many of the robo-advisers which took part in the study to make “significant changes” to their businesses.
Christian Faes of LendInvest (Lend Academy) Rated: A
In this podcast you will learn:
- How the financial crisis formed the backdrop for the founding of LendInvest.
- How their first foray into raising capital online transformed their business.
- The kinds of loans that LendInvest offers today.
- The typical borrower who uses LendInvest today.
- How they have applied technology to the borrowing process.
- How they attract these kinds of borrowers.
- The four different channels for investors.
- Details of their London Stock Exchange listed bond.
- What is being done in the UK to address the housing shortage there.
- How Brexit has affected their business over the past two years.
- Who has provided equity capital for LendInvest.
- Christian’s thoughts on international expansion for LendInvest.
- How he feels about a potential LendInvest IPO.
Crowdfunding faces withholding tax clampdown (The Times) Rated: A
Revenue has tightened the rules on peer-to-peer lending by requiring businesses that raise money through crowdfunding to deduct a 20% withholding tax on the interest they pay.
The move will make it harder for individuals to avoid tax when they use crowdfunding to lend spare cash to small businesses rather than earning paltry returns by leaving it on deposit.
Can this lending buy-to-let startup help agents sell more homes? (The Negotiator) Rated: A
A buy-to-let finance start-up founded by the entrepreneur behind crowd-funding mortgage firm Landbay says it wants to help agents sell properties faster and in greater volumes.
Officially launched this week after being set-up in November last year, Dot offers agents and developers a one-click buy-to-let purchase button for their ‘properties for sale’ listings (see mock-up above) which, the company’s claims suggest, could offer an antidote to the current sluggish sales market.
After clicking the button, investors will be offered the opportunity to buy the property on the spot if they put down a 30% cash deposit via Dot.
FCA urged to extend cap on payday loan fees to other forms of credit (The Guardian) Rated: B
The City watchdog is facing mounting pressure to extend its cap on payday lending fees and interest to a broader range of high-cost financial products before a major review of lending practices this week.
Likely to result in a series of new rules for banks and finance companies, the review comes as hard-pressed Britons increase their personal borrowing to levels unseen since the financial crisis.
China: WeiyangX Fintech Review (Crowdfund Insider) Rated: AAA
Ant Financial’s $10-billion fund-raising faced oversubscription
The ongoing $10-billion fund-raising of Ant Financial Services has attracted the attention of multiple investors.
According to informed sources, investors expected to participate in this round of financing include private equity group Carlyle, General Atlantic, Silver Lake, Sequoia Capital China, Warburg Pincus, sovereign wealth fund Temasek, institutional funds Canada Pension Plan Investment Committee (CPPIB) and BlackRock; while many other investors were rejected.
According to a person involved in the funding, this round of financing will value Ant Financial at more than US$150 billion.
Traditional banks can be the ‘trusted face’ of fintech and online finance firms (South China Morning Post) Rated: A
While banks see fintech as their biggest threat, they can use their trusted position among customers and regulators to collaborate in the shift to digital banking, software firm Temenos says
In a recent survey of 400 banking executives, Temenos said more than 53 per cent of respondents cited e-financial services like PayPal, Alipay, WeChat Pay and Apple Pay as their biggest non-traditional competition in the next two years.
Crowdfunding in Switzerland at Record High: CHF 375 Million (PR Newswire) Rated: AAA
The Swiss crowdfunding market has reached a record high volume of CHF 374.5 million in 2017, almost three times more than in the previous year. This has been revealed by the latest Crowdfunding Monitoring report issued by the Lucerne University of Applied Sciences and Arts. The financing of SMEs and investments in real estate are key drivers of the strong growth. The authors of the report are expecting a further marked increase to about CHF 1 billion this year. Compared to the more advanced markets in the United Kingdom and the United States, Switzerland is two to three years behind, but catching up rapidly.
Hungary ready to join the global blockchain market (Budapest Business Journal) Rated: B
Europe is starting to take blockchain-based solutions seriously, and Hungarian players seem ready to be part of the game. The largest international blockchain summit in the CEE region, Blockchaineum 2.0, gathered major stakeholders in Budapest to discuss the hottest issues on the global agenda.
Peer-to-peer lending is considered another blockchain target area. Ray Youssef, CEO of Paxful gave the example of Nigeria, the biggest economy in Africa, where high inflation and foreign currency restrictions push many people towards finding shelter in cryptocurrencies.
Mobile ventures to take on payments (Daily Sabah) Rated: A
Square, one of the most popular payment solutions Visa invested on, allows street vendors the opportunity to accept credit cards. It brings the convenience of payment for consumers, who can shop safely anywhere in the world.
Klarna is another venture that has received Visa investments. It is one of Europe’s leading payment providers, aiming to make the payment process simple, smooth and secure for customers and trading partners. Klarna offers payment solutions for over 60 million users in Europe and North America.
Cryptocurrency Cap Waiting to be Unlocked by Lenders (The Merkle) Rated: A
Today, cryptocurrency has an estimated market cap of $300 to $800 billion USD. Asset-backed tokens have been expected to reach $5 trillion USD by 2025.
Now, Depository Network (DEPO) has made it even easier for digital asset owners to cash in on their holdings while offering peace of mind to lenders.
DEPO is developing the world’s first decentralized, multi-platform collateral network. The depository will be a secure place for borrowers to deposit their coins or tokens as a collateral for loans while offering lenders full control over the details of the loan agreement.
Mortgage marketplace receives $ 700k loan (Australian Broker) Rated: AAA
An online home loan marketplace has received a $700,000 loan from Jobs for NSW, which is set to help the business create 46 jobs over the next five years.
HashChing reports it now has over $900million settled through their platform from more than 1,950 loans. It also says it has 586 mortgage brokers on the platform and is growing at 700% year-on-year.
Only 4% Indians get easy personal loans from banks and NBFCs (Sify Finance) Rated: AAA
27 public sector banks, 93 commercial banks, over 10,000 non banking financial and Gold companies and several micro-finance institutions, but ask any entrepreneur the ease of getting a loan. A mixed response is most likely, with majority opting for diplomatic correctness over factual accuracy.
Getting a loan is certainly a monumental feat in this era of digitisation. And this is the exact demand that peer-to-peer companies such as LenDen, i2i Funding, Faircent, Lendbox are keen to fulfill.
i2i Funding is India’s second largest p2p lending platform, with a size of 50,000 customers. The company aspires to cross Rs 2 crores in monthly disbursal by October 2018.
How do Investors Invest in Startups – From a Venture Capitalist’s Point of View (Entrepreneur India) Rated: A
In this regard, to decode what goes on in the minds of leading venture capitalists, Entrepreneur India interacted with Bhaskar Majumdar who is Managing Partner at Mumbai-based Unicorn India Ventures. At this point in time, Unicorn India has dedicated equity funds worth INR 100 crores under deployment, while another INR 600 crores worth debt fund has been launched.
He also states that with aspects such as credit scoring, data collection, and even lending to MSMEs having now received the digital touch, Fintech is exciting considering the fact that startups in the sector could effectively collaborate with banks to bring more people into the formal banking system.
Xiaomi Launches Mi Credit, A Lending Marketplace Exclusively for MIUI Users (BW Disrupt) Rated: B
Chinese smartphone manufacturer Xiaomi has introduced Mi Credit which aims to deliver instant loans exclusively to MIUI users.
Mi Credit provides a hassle-free approach to avail loans instantly.
MIUI users can apply for a loan anytime and from anywhere. The company is offering loans starting from Rs 1,000 up to Rs 1 Lakh.
According to a report published by ET, the loan will be extended at 3% interest per month and focuses on salaried professionals.
Kenya moves to regulate fintech-fuelled lending craze (Reuters) Rated: AAA
Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account.
Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.
This week, the finance ministry published a draft bill on financial regulation which covers digital lenders for the first time. A key aim is to ensure that providers treat retail customers fairly, it said.
Russia Has Significant Opportunity to Advance Financial Tech Services – Analyst (Sputnik International) Rated: AAA
Bob Contri: I think that in financial services, which is where I work, digital is very important. I would say for our clients globally it’s probably the most important topic right now. I think it’s very important from a client perspective so how do they provide financial services to their clients in a very efficient way. And I think it’s also very important how they manage their business so how can they use their technologies to create more efficiency in the middle and back office. So it’s probably the biggest topic right now in our practice globally with working with our clients.
Sputnik: Do you think there’s big potential for new approaches in banking such as peer-to-peer lending, crowdfunding?
Bob Contri: Sure, I think that the face of financial services is changing pretty dramatically. I think that obviously automated money transfers and cross-border payments will change dramatically. I think peer-to-peer lending has a big opportunity to grow significantly. So I think the whole face of financial services is changing pretty dramatically. That’s not to say that the market leaders of today won’t be the market leaders of the future.
RentSher — a firm with a hire purpose (Gulf News) Rated: AAA
Founders Vaibhav and Purvashi Doshi and Harsh Dhand originally conceived of RentSher as a peer-to-peer lending platform, the Airbnb of stuff.
But after they launched the firm in Bengaluru in 2015 (Dubai followed in 2016), they noticed a problem.
“We figured out that peer-to-peer alone is not scalable enough,” said Vaibhav, the firm’s CEO, in an interview at his and Purvashi’s Dubai villa.
That forced a rethink, and a move towards a business-to-business (B2B) and business-to-consumer (B2C) model, a centralised one-stop rental platform for companies already offering rental services to connect with a pool of customers through an easy-to-use interface.
Reaping the fruits of hard work (Khaleej Times) Rated: B
It was while discussing a common problem that Marie-Christine Luijckx and three friends came up with a successful business model. Luijckx and her friends were doing long working hours in their corporate jobs with very few healthy food choices resulting in loss of productivity at the workplace. They thus decided to establish Fruitful Day, a business that delivers curated selections of fresh fruit to workplaces and homes across the UAE in 2015.
Luijckx says all partners believe passionately in the business and they funded it with their personal savings. “Our only external funding to date has been through Beehive, which is a debt crowdfunding platform,” she says.