- Today’s main news: Betterment adds financial advice packages. Funding Circle the fastest growing P2P lender in UK. TransferWise revenue almost doubles. China’s P2P lending problems hit consumer spending. Lending Club CEO says U.S., China need clearer P2P lending regulations.
- Today’s main analysis: Funding Circle’s IPO, and aggregate excess payment.
- Today’s thought-provoking articles: How China tech companies are dominating North American VC. Where millennials carry the most debt. 101 fintech disruptors in UK. Why crypto lending could be a risk-reduction option. What the Chinese P2P lending crisis means to Southeast Asia.
- Betterment introduces financial advice packages. It was bound to happen sooner or later.
- PeerIQ on Funding Circle’s IPO, and aggregate excess payment. There’s also a nifty introduction to their stress-testing tool.
- Chinese tech giants are dominating the North American VC market. This is a first, but does it signal a shift in the global balance of power? Not really. China still has a way to go. But it does signal that China has a lot to offer the rest of the world in financial services. The interesting thing is, this historic first happened at a time when China is going through a P2P lending crisis and cracking down on scams.
- Where millennials carry the most debt. Of the top 6 highest in terms of median balance, 4 of the metro areas are in Texas. Yes, Dallas and Houston are among them, but not at the top of the list. Interesting.
- Sacramento is in the top 10 nationally for taking out mortgages.
- What I learned at LendIt Fintech China 2018. Lend Academy.
- Interview with Ken Lin of Credit Karma. Lend Academy podcast.
- LendingTree is fintech’s success story.
- PeerStreet adds short-term notes to offerings.
- Facet Wealth picks up $33 million.
- Finitive facilitates $50 million line of credit for bungalow.
- Investment strategies with good yields.
- Funding Circle the fastest growing P2P lender.
- Funding Circle confirms IPO details.
- Funding Circle getting listed.
- TransferWise revenue almost doubles.
- 101 fintech disruptors.
- Crypto lending could be a risk-reduction option.
- OakNorth valued at $2.3 billion.
- Wonga collapse shows extent of UK poverty.
- Crowd2Fund publishes loanbook and performance data.
- The House Crowd launches development finance offering.
- P2P lending boom explosion hits consumer spending.
- Mother hangs herself after being victimized by P2P lending crash.
- 9F eyes virtual bank license.
- United States
- Betterment Introduces Financial Advice Packages (Markets Insider), Rated: AAA
- Varo Money Bank Charter; Funding Circle IPO (PeerIQ), Rated: AAA
- Chinese tech giants are dominating North America in VC funding (Markets Insider), Rated: AAA
- What I Learned at LendIt Fintech China 2018 (Lend Academy), Rated: A
- Ken Lin of Credit Karma (Lend Academy), Rated: A
- Places Where Millennials Carry the Most Debt (Markets Insider), Rated: AAA
- Sacramento homebuyers are among the most financially stretched in the nation, study shows (Sacramento Bee), Rated: B
- LendingTree is the secret success story of fintech (TechCrunch), Rated: A
- PeerStreet Expands Real Estate Investing Options with Shorter-Term Notes (Business Wire), Rated: A
- Baltimore financial technology start-up gets $ 33 million investment (The Baltimore Sun), Rated: A
- Finitive Facilitates $ 50 Million Warehouse Line Of Credit For Bungalow (PR Newswire), Rated: B
- 4 Interesting Investment Strategies With Good Yields (Influencive), Rated: A
- United Kingdom
- Funding Circle remains fastest growing P2P firm (P2P Finance News), Rated: AAAA
- Funding Circle confirms more details of IPO (P2p Finance News), Rated: A
- Funding Circle plans October listing in British ‘fintech’ first (Channel News Asia), Rated: B
- Fintech start-up TransferWise reports second year of profit, revenue almost doubles (CNBC), Rated: AAA
- 101 Fintech Disrupters (BusinessCloud), Rated: AAA
- The unique side of Crypto Lending and why it could be the option to reduce risk (London Loves Business), Rated: AAA
- OakNorth just landed a $ 2.3 billion valuation (Business Insider), Rated: A
- Wonga payday loans collapse shows extent of UK poverty (World Socialist Web Site), Rated: A
- Crowd2Fund publishes loanbook and performance data (P2P Finance News), Rated: A
- The House Crowd launches development finance offering (Development Finance Today), Rated: A
- China/Hong Kong
- Implosion of China’s P2P Lending Boom Hits Consumer Spending (Wolf Street), Rated: AAA
- Mother Hangs Herself After Becoming a Victim of China’s P2P Crash (The Epoch Times), Rated: A
- 9F, fintech company with 63 million mainland Chinese users, eyes Hong Kong virtual banking licence (SCMP), Rated: B
- European Union
- The Hottest Fintech, Insurtech Startups in Berlin (Inside Bitcoins), Rated: AAA
- Real Estate Platform Zinsbaustein Receives Additionaly Investment from Sontowski & Partner Group (Crowdfund Insider), Rated: B
- Lending Club CEO: US’s and China’s P2P lending need clearer regulation and communication (TechNode), Rated: AAA
- Australia/New Zealand
- Non-banks emerge as traditional banks retreat (NZ Adviser), Rated: AAA
- Southern Cross enjoys strong year (Good Returns), Rated: A
- The Chinese P2P crisis and what Southeast Asia can learn from it (KrAsia), Rated: AAA
- Peer-to-peer lenders plan to self-regulate (Korea JoongAng Daily), Rated: A
Betterment Introduces Financial Advice Packages (Markets Insider), Rated: AAA
Betterment, the largest, independent online financial advisor, today announced it will be piloting a new line up of financial advice packages, expanding its access to personalized advice from licensed financial experts. This new service furthers Betterment’s commitment to making advice more accessible and personalized.
Varo Money Bank Charter; Funding Circle IPO (PeerIQ), Rated: AAA
Early this week, Funding Circle announced plans to raise £300Mn on the London Stock Exchange through an IPO, valuing the company at up to £1.65 billion. To date, Funding Circle has originated over £5 billion in loans across Europe and the United States. Funding Circle has grown revenue by a 54% CAGR to £63 Mn in the first half of 2018. Funding Circle charges 100bps for servicing and estimates it receives revenue equal to almost 5% of loan value originated.
Chinese tech giants are dominating North America in VC funding (Markets Insider), Rated: AAA
Chinese companies have outpaced their North American rivals in funding startups for the first time — even as the country’s economy shows signs of slowing down.
In the second quarter, China-based companies recorded $30.9 billion of venture-capital investment, higher than North America’s $27.2 billion, according to data from Goldman Sachs.
What I Learned at LendIt Fintech China 2018 (Lend Academy), Rated: A
Hu Liming from Tencent Financial Cloud talked about the importance of the AI offerings within their cloud computing platform. AI is powering their anti-fraud offerings, their lending process, their collections and customer service efforts. More than 20 of the largest banks and insurance companies in China are using Tencent Financial Cloud for their core services.
Ken Lin of Credit Karma (Lend Academy), Rated: A
In this podcast you will learn:
How the work Ken was doing at Prosper led to the founding of Credit Karma.
When Ken realized that Credit Karma was going to be a sizable business.
The key drivers of adoption early on in their business.
How Credit Karma’s business has evolved over time.
The different verticals they are in today.
How Credit Karma makes money.
What it means when Credit Karma says a consumer is pre-qualified for a loan.
How exactly they are integrated with the platforms when it comes to credit approvals.
How platforms can reduce their customer acquisition cost when they’re working with Credit Karma.
What autonomous finance means and why it is critical to the future of personal finance.
Why finance is not autonomous today.
The story behind their recent acquisition of the mortgage platform Approved.
The total number of consumers who have a Credit Karma account today.
How Ken thinks about geographic expansion at Credit Karma.
Where they are at with IPO plans.
What Ken is working on today that he is most excited about.
Places Where Millennials Carry the Most Debt (Markets Insider), Rated: AAA
LendingTree, the nation’s leading online loan marketplace, today released its study on the places where millennials carry the most debt. The study found that student loans make up the biggest share of millennial debt, but auto loans are close behind. The study revealed that the typical urban millennial carries significant debt; the average debt balance for millennials living in the 50 biggest U.S. cities is $23,064.
- Millennials in San Antonio, Pittsburgh, and Austin, Texas, shoulder the largest debt burdens of the 50 biggest metros, with median non-mortgage debts of $27,122, $26,403 and $26,164, respectively.
- Three California cities — San Jose, Sacramento and Los Angeles — have the lowest median balances on the list at $18,376, $18,691 and $19,299, respectively.
In the top 10 cities, more than half of millennials have outstanding debts totaling $25,000 or more (not including mortgages), and roughly 1 in 4 millennials living in these cities owes more than $50,000.
The 10 Places Where Millennials Carry the Most Debt
Virginia Beach, Va.
Sacramento homebuyers are among the most financially stretched in the nation, study shows (Sacramento Bee), Rated: B
Area buyers took out mortgages in 2017 that were on average 3.2 times larger than their annual income, according to a study by Lending Tree, an online loan marketplace. The national average is 2.56.
That ranks Sacramento 10th nationally among the country’s 50 largest metro areas.
Six California cities are in the national top 10, a sign that Golden State residents are stretching more to buy a home than those living elsewhere.
LendingTree is the secret success story of fintech (TechCrunch), Rated: A
For all of the excitement centered around fintech over the past half-decade, most venture-backed fintech companies struggle to acclimate to public markets. LendingClub and OnDeck have plummeted since their late 2014 IPOs after several years of darling status in the private markets. GreenSky, which went public in May of this year, has been unable to return to its IPO price. Square is the exception to the rule.
Sometimes we overlook the companies that hail from the era that precedes the current wave of fintech fascination, a vertical which has accumulated over $100 billion in global investment capital since 2010.
PeerStreet Expands Real Estate Investing Options with Shorter-Term Notes (Business Wire), Rated: A
PeerStreet, an award-winning platform for investing in real estate backed loans, today announced the addition of a new investment option, Cash Offer Loans. Cash Offer Loans are a new investment option that provides PeerStreet investors with a shorter duration than typical bridge loans.
Baltimore financial technology start-up gets $ 33 million investment (The Baltimore Sun), Rated: A
Facet Wealth, a Baltimore-based financial services startup, has attracted a $33 million investment led by a New York-based venture capital firm.
Finitive Facilitates $ 50 Million Warehouse Line Of Credit For Bungalow (PR Newswire), Rated: B
Finitive (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today the closing of a $50 million senior secured warehouse credit facility for Bungalow (bungalow.com). This transaction was the first of its kind in the co-living sector.
4 Interesting Investment Strategies With Good Yields (Influencive), Rated: A
4. Peer-to-Peer Lending
Lending clubs have revolutionized how small businesses get money and act as a third party between individuals who want to lend money and people who need it. You can think of it as a peer-to-peer lending system that’s normally backed up and insured. You could get around 7% with one of these investments.
Funding Circle remains fastest growing P2P firm (P2P Finance News), Rated: AAAA
FUNDING Circle has retained its place as the fastest growing peer-to-peer lending firm in the latest Sunday Times Hiscox Tech Track 100.
Fellow ‘big three’ P2P platform Zopa also featured in the list, which was published on Sunday. However, the smallest member of the ‘big three’, RateSetter, has dropped out of the annual league table.
Funding Circle confirms more details of IPO (P2p Finance News), Rated: A
FUNDING Circle has unveiled more details of its plan to raise £300m through a listing on the London Stock Exchange’s main market in October.
The peer-to-peer lending platform said retail investors will be able to apply for shares via intermediaries such as Hargreaves Lansdown, AJ Bell Youinvest and The Share Centre, with a minimum application size of £1,000.
Funding Circle plans October listing in British ‘fintech’ first (Channel News Asia), Rated: B
Funding Circle will test investor demand for British peer-to-peer lenders in a listing scheduled for October and expected to value it at more than 1.5 billion pounds (US$1.94 billion).
Capitalising on high-street banks’ retreat from lending to that sector since the financial crisis, it has facilitated more than 5 billion pounds in loans to more than 50,000 companies across Britain, the United States, Germany and the Netherlands.
Fintech start-up TransferWise reports second year of profit, revenue almost doubles (CNBC), Rated: AAA
TransferWise, one of Europe’s largest financial technology (fintech) start-ups, said Monday it was profitable for the second year in a row.
The London-headquartered money transfer firm reported an annual post-tax net profit of £6.2 million ($8 million) for the fiscal year ending March 2018.
Annual revenue nearly doubled to £117 million during the period, from £66 million the previous year, TransferWise said. Operating profit came in at £9.5 million following a loss of £519,000 last year.
101 Fintech Disrupters (BusinessCloud), Rated: AAA
- ATOM BANK, Durham
- CREDITLADDER, London
- CROWDLORDS, Surrey
- FUNDING CIRCLE, London
- FUNDING OPTIONS, London
- LANDBAY, London
- LENDABLE, London
- LENDINVEST, London
- MONZO, London
- OAKNORTH, London
- PRODIGY FINANCE, London
- RATESETTER, London
- SEEDRS, London
- STARLING BANK, London
- TANDEM BANK, London
- TRANSFERWISE, London
- ZOPA, London
The unique side of Crypto Lending and why it could be the option to reduce risk (London Loves Business), Rated: AAA
Crypto lending or digital asset backed loan is comparatively a new concept used in earning profits without much effort. It revolves around the concept of shorting. Perhaps, you do not understand how shorting works, do not worry because all you need to know is that you are lending fund to others who are making short trades. In exchange for the funds, you get an interest rate that goes from 5% to 50% each year.
OakNorth just landed a $ 2.3 billion valuation (Business Insider), Rated: A
ACORN OakNorth, a UK-based alt lender focused on small- and medium-sized businesses (SMBs) and property financing, has secured a £78 million ($100 million) funding round from the EDBI of Singapore, NIBC Bank, Clermont Group, and Coltrane Asset Management. OakNorth’s loans have helped create 8,500 homes in the UK and 8,000 jobs.
Wonga payday loans collapse shows extent of UK poverty (World Socialist Web Site), Rated: A
The UK payday loan industry grew rapidly from 2008-2012, coinciding with the global financial crash and the pauperisation of millions of people in the UK. The numbers of loans issued in this period were 10.2 million per year, with a value of £2.8 billion.
Wonga’s posted pre-tax profit losses in 2016 of nearly £65 million, after recording huge profits just a few years before.
In its 2014 review of the payday loans industry, the FCA found that the average income of a payday lender was £16,500 a year, far below the UK’s median wage of £26,500 at that time.
The CMA found most recipients (52 percent) of payday loans have experienced financial problems in the recent past, with 38 percent of all customers having a bad core/credit rating and 10 percent of customers having had a bailiff or debt collector visit to their home. Over half (53 percent) use payday loans to pay for living expenses, food, utility bills—with 7 percent having to use these loans to pay for general shopping such as clothes and household items.
Crowd2Fund publishes loanbook and performance data (P2P Finance News), Rated: A
CROWD2FUND is publishing its loanbook for the first time and has analysed the data to forecast investor returns more accurately.
Detailed information on loans, including late repayments and defaults, will now be available to read online, as well as rates offered to borrowers and investors’ returns.
The House Crowd launches development finance offering (Development Finance Today), Rated: A
Borrowers can apply for funding ranging from £500,000-£5m over a maximum loan term of 24 months, with interest rates starting from 8% per annum and both arrangement and exit fees at 2%.
Implosion of China’s P2P Lending Boom Hits Consumer Spending (Wolf Street), Rated: AAA
The Chinese government legalized peer-to-peer lending platforms in 2015. P2P sites attract money from individual investors – mostly savers – by offering them extraordinarily high yields. They lend this money at high interest rates to borrowers who have trouble getting loans elsewhere – classic subprime. By the end of 2017, there were over 8,000 P2P platforms, according to the People’s Bank of China, with over 50 million registered users. By the end of June, in a little over two years, the industry had gone from zero to $190 billion in outstanding loans.
In May, new vehicle sales still surged 7.9% from a year ago. Through the first five months of the year, sales were up 5.1%. But in June, the year-over-year sales increase eased to 2.3%. And in July, sales actually fell 5.3% year-over-year.
That 5.3% decline in July was a big, sudden, and unexpected swing from the 7.9% surge in May.
Mother Hangs Herself After Becoming a Victim of China’s P2P Crash (The Epoch Times), Rated: A
Around 4 a.m. on Sept. 7, construction workers in Jinhua, a city in eastern China’s Zhejiang Province, found the body of a woman hanging from a tree in a park. She was Wang Qian, a 31-year-old single mother who had lost her savings in China’s recent peer-to-peer (P2P) lending crash.
Wang worked as an individual seller on Taobao, a Chinese shopping site similar to eBay. She lost about 260,000 yuan ($37,990). She had invested her money in P2P platform PPMiao, which collapsed on Aug. 6. She lost about 260,000 yuan ($38,000).
9F, fintech company with 63 million mainland Chinese users, eyes Hong Kong virtual banking licence (SCMP), Rated: B
Mainland Chinese financial technology company 9F Group has teamed up with local and international firms to apply for a virtual banking licence in Hong Kong.
The Hottest Fintech, Insurtech Startups in Berlin (Inside Bitcoins), Rated: AAA
Launched in 2013, N26 is a German neo-bank and one of the fastest growing banks in Europe. It serves more than 1 million customers, both businesses and individuals, across 17 European markets, and intends to enter the UK market in 2018 and the US market in 2019.
Smava is a loan portal that aims to make personal loans transparent, fair and affordable for consumers. Based on digital processes, Smava provides a market overview of 70 loan offers from 25 banks. As of January 2018, Smava had originated over US$3 billion in loans through its platform since inception.
Raisin is a fintech startup providing savings and investments marketplaces across Europe. The company operates several localized platforms for the German, French, Spanish, and Austrian markets, and more. These allow savers to shop and compare rates European-wide. In February, it launched a dedicated UK site, enabling savers to access deposit accounts in GBP, and another platform dedicated to the Dutch market in August.
SolarisBank is a platform with a full banking license which enables companies to offer their own financial products. Through APIs, partners gain access to SolarisBank’s modular services including payments and e-money, lending, digital banking as well as services provided by integrated third party providers.
Launched in 2014, CrossLend is a B2B marketplace lending platform that specializes in flexible refinancing via a capital market structure. CrossLend also offers cross-border credit intermediation through cooperation with a partner bank. The company aims to facilitate the borrowing, investing, and trading of money across the globe.
Founded in 2016, Billie offers a fully automated invoice financing platform that aims to “revolutionize small business financing.” Based on big data analytics, fully digitalized processes and a highly scalable state of the art tech platform, the company offers a simple and fast way for small businesses to access capital.
Real Estate Platform Zinsbaustein Receives Additionaly Investment from Sontowski & Partner Group (Crowdfund Insider), Rated: B
Real estate crowdfunding platform zinsbaustein.de has received additional backing from the Sontowski & Partner Group.
Zinsbaustein founding group FinLeap has sold its stake in the firm and is now focusing on building the recently introduced “B2B2X Fintech” platform.
Lending Club CEO: US’s and China’s P2P lending need clearer regulation and communication (TechNode), Rated: AAA
The idea became popular when it was first proposed around a decade ago. The then fast-growing sector fostered a series of unicorns. US P2P pioneer Lending Club was valued at $5.4 billion in its 2014 IPO and its peer Prosper was valued by private investors as worth $1.9 billion in its prime. Although a few years later than its foreign counterparts, Chinese P2P platforms have grown rapidly with leaders in the sector such as Hexindai who has gone public, and the likes of Lufax and Dianrong poised for an IPO.
Non-banks emerge as traditional banks retreat (NZ Adviser), Rated: AAA
The peer-to-peer lending space is gobbling up market share in mortgages as banks appear to be lending less to homebuyers, says one P2P mortgage lender.
Non-bank Southern Cross Partners is growing 20% year-on-year as the banks retreat from funding house, and sector demand grows, Southern Cross Partners chief executive officer Luke Jackson said.
Southern Cross enjoys strong year (Good Returns), Rated: A
The company’s total value of loans under arrangement grew 24.8% in the year to date, as growth in investor funds rose 19.9%.
In a city that needs 13,000 houses a year to keep up – but only 7,000 are being built annually – lack of funding will only make the housing crisis worse.”
The Chinese P2P crisis and what Southeast Asia can learn from it (KrAsia), Rated: AAA
Merely three years ago, peer to peer (P2P) lending in China was hailed as the banks of tomorrow and the harbinger of financial innovation. Powered by technology and ever burgeoning rounds of funding and valuation, P2P lending was set to disrupt financing the world’s 2nd largest economy dominated by state owned (or sponsored) banks. The new elites in jeans and T-shirts would show the suited up old guard how finance is supposed to work. Here came the new finance, Silicon Valley style – with Chinese characteristics.
Fair was its blossom; and wretched is its downfall. By June 2018, the Chinese financial information provider 01Cajing reported only 1504 functioning P2P platforms, down from over 3000 in the heydays. The change in fortune is as swift as it is bizarre. Is this an omen of darker times to come for South East Asian marketplace lending? Before this question can be addressed, it is necessary to disentangle how the crisis precipitated in China, and the confluences of forces behind the calamity.
Peer-to-peer lenders plan to self-regulate (Korea JoongAng Daily), Rated: A
On Monday, the Preparatory Committee of the Digital Finance Association announced a series of self-imposed regulations that it plans to apply to all member companies when the association kicks off later this year.
Lendit, 8percent and Popfunding, the three P2P firms in the preparatory committee, left the older Korea P2P Finance Association in May along with other firms due to disagreements over its management direction.