Thursday July 18 2019, Weekly News Digest

Digital-only banks U.S.

News Comments Today’s main news: N26 raises $170M at $3.5B valuation for U.S. launch. OnDeck, Upserve partner on restaurant financing. Quicken Loans has best quarter in history. Curve raises $55M at $25M valuation. Lufax to bow out of P2P lending. Goldman funds Lendable. Today’s main analysis: Is America ready for challenger banks? (A MUST-READ) Today’s […]

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Digital-only banks U.S.

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United States

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News Summary

United States

Thiel-Backed Bank Valued at $ 3.5 Billion Amid U.S. Launch (Bloomberg), Rated: AAA

A German smartphone bank backed by billionaires Peter Thiel and Li Ka-shing has raised new funds at a valuation of $3.5 billion, making the company one of Europe’s highest valued non-listed fintech firms.

N26 GmbH extended its Series D funding round by $170 million to a total $470 million, the Berlin-based company said on Thursday.

OnDeck And Upserve Partner To Speed Financing To Restaurants (Yahoo! Finance), Rated: AAA

OnDeck (ONDK) and Upserve today announced a partnership to provide Upserve’s restaurant customers with online financing options from OnDeck. Over 10,000 restaurants currently use Upserve’s restaurant management platform and Point of Sales (POS) software to manage relationships with more than 57 million active diners.

Quicken Loans Has Best Quarter in Company’s 34-Year History (PR Newswire), Rated: AAA

Detroit-based Quicken Loans, America’s largest mortgage lender, today announced that the second quarter of 2019 was the best in the 34-year-old company’s history.

The second quarter of the year was the first three times the company has originated more than $10 billion in a single month, with each month setting a new record for the highest closed loan volume – culminating in June being the best month in Quicken Loans history. In June, the company closed nearly $11 billion in mortgage volume, contributing to the $32 billionoriginated for the quarter.

Over 57% of Purchase Borrowers Received Mortgage Rates Under 4.25% Last Week (LendingTree), Rated: AAA

Mortgage Rate Distribution

  • For 30-year, fixed-rate mortgages, approximately 56.8% of purchase borrowers received offers of 4.25% or less. That is down from 60.1% of borrowers the previous week. A year ago, 0.07% of offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, 4.0% was the most common interest rate. This rate was offered to 15.4% of borrowers.
  • Of 30-year, fixed-rate mortgage refinance borrowers, 70.6% received offers of 4.25% or less, which is down from 72.8% the previous week. A year ago, no refinance offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage refinance applications, the most common interest rate was 4.0%, offered to 17.95% of borrowers.

Mortgage Rate Competition Index

  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, the index was 0.99, down from 1.19 the previous week.
  • How big of a deal is it to get a mortgage APR that’s 0.99 percentage points lower than the competition? Over 30 years, that could translate to $47,073 in savings on a $300,000 loan (see Mortgage Savings Tracker graphic below).
  • The index was wider in the refinance market at 1.10, down from 1.35 the previous week. Refinance borrowers could have saved $52,554 by shopping for the lowest rate.

Rate Cuts; Digital Banks (PeerIQ), Rated: AAA

Source: PeerIQ, WSJ

Digital Banks – The Future of FinTech Lending?

FinTechs lenders meanwhile are white-labelling banking services to complete the customer product roadmap while awaiting a charter. SoFi Money, WSFS, Radius Bank and its deposit partnerships with FinTechs are great examples of this.

This week, Boston-based Radius Bank is looking to adopt the user-friendly style set forth by the aforementioned European banks.

European Challenger Banks Launch U.S. Invasion – Is America Ready? (The Financial Brand), Rated: AAA

At a time when U.S. consumers are increasingly becoming comfortable with branchless banking and alternative financial providers, is there room for alternative digital-only banks with zero name recognition? Recent announcements by Germany-based N26 and U.K.-based Monzo that they will be entering the highly competitive U.S. in the next few months will provide a good test of the viability of foreign-based banking competition.

N26 Invites 100,000 Wait-Listed U.S. Consumers To Open Accounts

According to N26, there will be a staged rollout beginning immediately, with the 100,000 people on the U.S. wait list being invited to sign up and have full access to the product.

Is Monzo the ‘Bank of the Future’?

Referring to itself as the “bank of the future,” Monzo has also begun marketing efforts in the U.S., hoping to disrupt the traditional banks and credit unions in a way similar to what they have done in the U.K. Valued at more than $1 billion, Monzo has a mobile-only customer base in the U.K. of 2.2 million customers.

Varo files application for bank charter that will differentiate it (Business Insider), Rated: A

Challenger bank Varo, which has raised $179 million from Warburg Pincus and TPG, just took a big step that might separate it from competitors like Chime and Monzo.

In the past year Varo has tripled its customer base and is expected to reach 750,000 registered customers this month, Walsh said.

Moven’s Plan B after buyout bid stalls: Expansion into lending (American Banker), Rated: A

Obstacles remain in Moven’s path to a charter in the U.S., even as its private-label banking offering expands across Africa and Asia.

JPMorgan Chase’s Dimon: Finn app was not a failure (bank innovation), Rated: A

Specifically, Dimon said the bank learned how to conduct digital account openings through Finn and that the process was shaved down to just a few minutes. CFO Jennifer Piepszak added that 25% of new account openings at Chase are now digital signups rather than through a bank branch. The bank reported it has opened 2 million accounts digitally.

The bank had pulled the plug on the digital-only offering in June, just a year after its launch, and rolled some of Finn’s most popular features into Chase’s main mobile banking app.

JPMorgan warns that lending income will fall in the second half (American Banker), Rated: A

The largest U.S. bank on Tuesday reported a drop in bond trading and cut its full-year outlook for net interest income — revenue from customers’ loan payments minus what the bank pays depositors — by $500 million. NII accounted for about half the New York-based company’s revenue last year.

Navient plans full-Earnest loan pool in $ 535.2M student-loan ABS (Asset Securitization Report), Rated: A

Navient Solution’s next securitization of private student-loan refinancing will involve only loans primarily issued to advanced-degree professionals by online lender Earnest – which Navient acquired in 2017.

The $535.2 million Navient Private Education Refi Loan Trust 2019-E will include two tranches of Class A notes with preliminary triple-A ratings from DBRS and S&P Global Ratings. The Class A-1 fixed-rate notes total $263 million, while the $228 million in Class A-2 notes will be divided into fixed- and variable-rate tranches.

Technology’s Inescapable Impact on Real Estate Investments – (MarketCurrents Wealth Management), Rated: A

Research-driven, professional investments in real estate have traditionally been reserved for family offices and institutional investors. Now, a swathe of new technology platforms and consumer products are revolutionizing the industry, opening up access and shifting valuations.

Millennials say real estate investing is one of the best ways to build wealth (Business Insider), Rated: A

According to a new survey from Bankrate, over one-third of millennials say real estate is the best way to invest money they won’t need for at least 10 years, more than the share of millennials surveyed who prefer stocks, savings accounts and certificates of deposit (CDs), gold, bonds, and cryptocurrency.

Real Estate Investing in a “1-Click” World (Propmodo), Rated: A

The plain truth is that there will never been such a thing as “Amazon 1-Click for real estate.” The end-to-end logistics solution for buying and managing property has not yet been perfected. Whilst there are a lot of great technology solutions being developed for the property industry they typically tackle just one or two specific pain points in a broader transaction. In isolation, these solutions have less impact on the overall customer experience because their piece is just one of a much larger puzzle. As an example, there’s not much point streamlining the purchase itself if the legal documents and mortgage approval take weeks of frustrating back-and-forth, duplicating much of the same process and paperwork.

Krista Morgan of P2Binvestor Overcomes Naysayers To Fund Growing Small Businesses (Forbes), Rated: A

With all the attention given to angel and venture capital, you might think that these financing options are the most likely to be used. To the contrary, debt is by far the dominant form of outside funding used: for example, 86% of $1 — $10 million companies seeking outside financing applied for a loan compared to 5% seeking equity financing, according to The 2018 Small Business Credit Survey.

However, since the late 1990s, as banks have consolidated and sought out more profitable sectors of the credit market, they have been shifting activity away from the small business credit market, according to Why Small Business Lending Isn’t What It Used to Be.

Lendbuzz, AI Auto Startup That Steps in When FICO Fails, Raises $ 150M (Xconomy), Rated: A

The Boston-based software company announced Monday it has raised $150 million in new funding to expand its team and issue more financing backed by its machine learning algorithms.

Most of the cash—$130 million—for Lendbuzz is in the form of debt financing from four banks and an insurance company to fund car loans through the startup’s platform. The rest is an equity investment led by venture capital investor 83North.

Soros, Innovation Endeavors Provide Fresh Funding for AlphaSense (Institutional Investor), Rated: A

AlphaSense has attracted $50 million from investors including Soros Fund Management and Innovation Endeavors, in a fresh round of funding that will help the company expand its artificial-intelligence-powered offering for asset managers.

House Democrats draft bill to keep big tech out of financial services (Yahoo! Finance), Rated: A

According to the draft bill, titled “Keep Big Tech Out Of Finance Act,” companies in violation would face a $1 million daily fine.

The legislation would apply to companies with $25 billion or more in annual revenue.

As the draft stands now, it would prohibit Facebook (FB) and other tech companies with at least $25 billion in revenue from becoming a financial institution or issuing a cryptocurrency.

San Jose payday-advance startup faces racial discrimination, retaliation lawsuit (The Mercury News), Rated: A

A former manager at PayActiv, a San Jose startup that provides payday advances, is accusing the company of racial discrimination and questionable business practices.

Ibarra said in his lawsuit that he was the only Hispanic employee when he was hired in 2014, the year the company was founded. The co-founders are of Pakistani descent, the suit said.

Pedro Ibarra said he was fired because he complained about being harassed by the company’s founders over his ethnicity, and because he raised concerns about PayActiv’s handling of user data and whether the company is acting like a regular payday lender and therefore should be classified as a creditor.

New apps competing for your money can have hidden costs (ABC Action News), Rated: A

A new crop of digital wallets, apps and financial tech companies are fighting for customers’ banking business. The push comes as federal data shows the Tampa Bay region hit a six-year high for the number of people living without banking accounts or easy access to credit.

CrediVia Brings New Experience to Multifamily Financing (BusinessWire), Rated: A

CrediVia launched last fall as a hospitality financing marketplace intent on driving smarter decisions and stronger engagement in the loan process. Today the company has announced expanded platform capabilities to execute multifamilydeals as well, part of its ongoing mission to become the preferred source for more effective and transparent commercial real estate lending.

SEC Posts Final Judgement in Enforcement Action Against Founders of iFunding (Crowdfund Insider), Rated: A

The Securities and Exchange Commission (SEC) has posted final judgments in the case of real estate crowdfunding platform iFunding and co-founders William Skelley and Sohin Shah.  The two founders were charged last year by the SEC Enforcement Division regarding allegations of fraud in the misappropriation of over $1.17 million from investors. The final judgments against Skelley and Shah were obtained this month.

Lending Express evolves into Become (Become email), Rated: B

Lending Express has rebranded to This transition comes at a pivotal point in the company’s growth and highlights its dedication to providing businesses withopportunities to improvfundabilitysecure funding, and ultimately become more.

Cross River Names Global Finance Veteran Melissa Ballenger As CFO (Yahoo! Finance), Rated: B

Cross River Bank (“Cross River”) today announced that it has appointed Melissa Ballenger as its Executive Vice President and Chief Financial Officer, effective immediately.

SecurCapital Acquires Breakout Capital Finance’s Lending Business (PR Newswire), Rated: B

SecurCapital Corp, an expanding supply chain and financial services provider headquartered in California, today announced the acquisition of the lending business of Breakout Capital Finance, a fintech company and nationwide small business lender. SecurCapital is also providing additional equity capital to drive growth in Breakout Capital Finance’s two primary lending products: its highly regarded and innovative term-loan product and its FactorAdvantage lending solution for small businesses that utilize factoring to finance their business. The acquired lending business assets will be operated by a subsidiary of SecurCapital that will conduct business as Breakout Capital.

CheapAir.com Expands “Travel Now, Pay Later” Option (Yahoo! Finance), Rated: B

Online travel agency CheapAir.com today announced an expansion of its travel budgeting tool in partnership with Affirm, giving customers the opportunity to prequalify for a travel budget and then book and pay for all elements of their trip over time.

Sokolov-Miller Family Center again recognized as leader in financial education (PSU), Rated: B

Each year the online loan marketplace LendEDU ranks programs based on its 50-point scale. This year, the Sokolov-Miller Family Center moved up two positions, tying for 13th place.

Community Capital Appoints New Board Member, Camden R. Fine (Yahoo! Finance), Rated: B

Community Capital Technology Inc. (“CCT”), a digital loan transaction marketplace for community banks, regional banks, and other non-bank originators and credit investors, today announced the appointment of Camden (“Cam”) R. Fine, former President & CEO of the Independent Community Bankers Association (ICBA), to its Board of Directors.

United Kingdom

Curve raises $ 55M at a $ 250M valuation (TechCrunch), Rated: AAA

Curve, the London-based “over-the-top banking platform,” has raised $55 million in new funding. The startup lets you consolidate all of your bank cards into a single Curve  card and app to make it easier to manage your spending and access other benefits.

Curve’s Series B round is led by Gauss Ventures, the London-HQ’d fintech investor, alongside Creditease, IDC Ventures and previous backer Outward VC (formerly Investec’s INVC fund).

What will the appropriateness test actually look like? (P2P Finance News), Rated: AAA

IT’S OFFICIAL – the Financial Conduct Authority (FCA) will soon make it mandatory for all peer-to-peer platforms to introduce an “appropriateness test” for new investors.

The purpose of the test will be to weed out any unsuitable lenders, and any potential lenders who do not fully understand the risks associated with P2P.

Uber, Lyft share prices: as tech IPOs disappoint, how can investors spot winners? (CMC Markets), Rated: AAA

Funding Circle [FCH], an online lending platform that enables individuals and companies to lend to small businesses, is the latest example of a hyped IPO from a business yet to turn a profit. A few lacklustre earnings announcements later, it appears the stock was indeed overvalued.

What metrics can traders look out for when weighing up a stock amid such an increasing amount of cash-burning companies looking to go public?

Lendy administrator outlines the state of collapsed P2P lender’s loanbook (P2P Finance News), Rated: A

LENDY investors are likely to receive an average of 57p on the pound for development finance and 58p for every pound from bridging loans funded on the collapsed peer-to-peer lending platform.

The document shows that 22 of the 29 bridging loans made via the platform are in insolvency proceedings, with 14 out of 25 development loans in the same situation.

The document reveals the outstanding value of the bridging loans is £36m, secured against assets historically valued at £81m.

Rishi Khosla of OakNorth (Lend Academy), Rated: A

In this podcast you will learn:

  • The incident that was the seed of the idea for OakNorth.
  • Why fast growth companies have trouble raising debt capital.
  • The range of loan sizes, terms and interest rates that OakNorth offers.
  • Why they started with building a tech platform first.
  • How their underwriting process works and what they have automated.
  • Rishi’s thoughts on defaults and his famous “zero defaults to date” quote.
  • How they are funding their loans in the UK.
  • Why the US is a core market for OakNorth’s international expansion.
  • Who they are offering the platform to in the US.
  • Why the “ai” in Oaknorth.ai stands for analytical intelligence.
  • The geographies where they are live today.
  • Why they will not be getting a banking license in markets outside the UK.
  • Why OakNorth launched a mortgage product for UK entrepreneurs.
  • How SoftBank is helping OakNorth beyond providing capital.
  • How OakNorth is attacking the Chinese market.
  • How Rishi is spending his time these days.

OAKNORTH LENDS £19.5M TO CARE CONCERN GROUP TO SUPPORT ALPHA REAL CAPITAL OPERATING CARE HOMES (Business Leader), Rated: B

OakNorth Bank has provided a £19.5m loan to Care Concern Group, a UK-based care home operator.

$ 2.9 Billion in Deals in 2019 on Track to Top Year Prior (Crowdfund Insider), Rated: A

Innovate Finance has just published its Q2 UK Fintech investment report tallying activity for the first half of 2019.

The most recent report from Innovate Finance, covering Q1 of 2019, indicated that overall investment into Fintech, including venture capital, angel investing, private equity etc., topped $1 billion. In brief, Fintech boomed in Q1 as the industry experienced a 41% growth versus the prior quarter (Q4). Comparing to Q1 of 2018 it quadrupled.

Latest UK fintech investment figures reflect the evolution of the sector (ComputerWeekly), Rated: A

Investment in UK fintechs in the first half of this year was £2.9bn, which is 85% of the total invested in 2018, according to figures from fintech industry body Innovate Finance. It is also 45% higher than the same six month period last year. London based companies took 90% of this.

For example challenger banks including OakNorth ($440m), Monzo ($147m) and Starling Bank ($98m) got the most significant investments. In payments and foreign exchange sectors Checkout.com ($230m), WorldRemit ($175m) and GoCardless ($76m) were major recipients.

Could ‘bad credit’ credit cards be more expensive than a payday loan? (Which?), Rated: A

Around four million people in the UK have subprime credit cards, charging interest ranging from 30% to 70% – compared to the average 20% APR on mainstream deals.

P2PFA looks to woo intermediaries (P2P Finance News), Rated: A

THE PEER-TO-PEER Finance Association (P2PFA) is looking at ways of boosting distribution for members.

LendIt Fintech Europe 2019 Preview (Lend Academy), Rated: A

LendIt is returning to London again for the sixth annual LendIt Fintech Europe event. It will be held on 26 – 27 September at the same location as last year, the Business Design Centre. We are expecting well over 1,000 people at the event this year.

Some of the featured keynote speakers this year will be:

  • Rishi Khosla – CEO, OakNorth
  • Jaidev Janardana – CEO, Zopa
  • Anne Boden – CEO, Starling Bank
  • Rhydian Lewis – CEO, Ratesetter
  • Husayn Kassai – CEO, Onfido
  • Tamaz Georgadze – CEO, Raisin

How Jules B uses tech to stay ahead online (Essential Retail), Rated: B

Independent luxury fashion retailer Jules B has six stores across the Lake District an Newcastle, as well as a strong online presence.

To that end it has been working with fintech company Klarna to provide more payment options, which he says allows it to “compete in that marketplace for the younger generation.”

China

Ping An-backed Lufax to ditch P2P lending on regulatory woes (Reuters), Rated: AAA

Lufax, one of China’s largest online wealth management platforms that is backed by financial giant Ping An Insurance (601318.SS), plans to exit its once-core peer-to-peer lending (P2P) business, three sources with direct knowledge of the matter told Reuters.

China slowdown, trade dispute hurt global carmakers (DW.com), Rated: A

The Chinese auto sector has been under a lot of pressure over the past 18 months, hurt by an economic slowdown that has dented consumer confidence, the ongoing trade dispute between Beijing and Washington, and the government’s crackdown on peer-to-peer lending. Looming stricter emissions rules are also causing Chinese buyers to wait to buy new cars.

China rich with opportunity for fintech talent (China Daily), Rated: A

China is on the cutting edge of the fintech industry and promises great opportunities for fintech talent, fuelled by a rising demand for financial services and technology professionals, according to Hays plc, a global professional recruiting group.

European Union

Bitcoin Suisse Applies for Banking License with Swiss Regulators (BTC Manager), Rated: A

As stated in its press release, the leading Swiss-based regulated cryptocurrency broker and financial services provider, has applied for a banking license with FINMA, following the Swiss Banking Act Art. 1a.

The firm claims it has also achieved several significant milestones in recent months, including the expansion the number of tradable digital assets, with more than 6,000 trading pairs, as well as the provision of a large scale collateralized crypto lending service to its institutional clients.

International

Goldman, UK’s Lendable Strike £200M Deal (PYMNTS), Rated: AAA

Goldman Sachs and personal loan startup Lendable from the U.K. have reached a £200m deal, in a sign of Goldman’s confidence in the startup, according to a report by the Financial Times.

A conversation with Zac Prince, Founder, CEO, BlockFi (The Block Crypto), Rated: A

Zac Prince is CEO of BlockFi, which helps crypto investors manage digital assets and grow their net worth through services such as Bitcoin loans. Frank Chaparro and Ryan Todd discuss the complexity of crypto loans and the future of the industry.

Australia

P2P lender joins another aggregator’s panel (Australian Broker), Rated: AAA

RateSetter’s personal loans and secured automotive offering will be made available to Australian Finance Group’s (AFG) broker network of over 2,900 from 22 July.

The P2P lender provides risk-based pricing for its personal loans, with interest rates starting at 5.49%. The loans range from $2,001 to $45,000 for terms between six months to five years. Creditworthy borrowers typically gain access to finance within 24 hours of filling out the five-minute application.

SME lender expands presence within Australia (Australian Broker), Rated: A

OnDeck Australia has joined the lending panel at Finance & Systems Technology (FAST), in an arrangement that will help facilitate more opportunities for FAST brokers interested in expanding into the SME lending channel.

X factor mortgages: The lenders offering more than just hot rates (Mozo), Rated: A

With the official cash rate sitting at just 1.00% following two RBA rate cuts, you may have noticed a flurry of home loan rate drops, with some lenders slashing rates towards the 3.00% mark and below.

Asia

Smaller Banks in Singapore Are at Risk As Fintechs Eye Digital Banking License (Fintech News), Rated: AAA

Competition is heating up in Singapore’s digital banking landscape as an increasing number of fintechs including e-wallet operators and payment services providers are looking to apply for when applications open in August.

Strong contenders for the Singapore’s digital bank licenses

Liquid Group, Xfers, MatchMove Pay, FOMO Pay, Razer and Singtel would be competing against the likes of Grab, Southeast Asia’s ride-hailing giant and the region’s first “decacorn,” Validus Capital, a peer-to-peer lending platform, and InstaReM, a remittance startup, which are also eyeing a digital bank license.

In June, the Monetary Authority of Singapore (MAS) said that it will issue up to five new digital bank licenses, comprising up to two digital full bank licenses and up to three digital wholesale bank licenses.

Accountants have critical role in helping businesses fight cybercrime (Channel News Asia), Rated: A

Finally, accountants should also focus on financial crime compliance, which must evolve to keep up with new business models such as peer-to-peer lending, the minister said.

Canada

Give your BBQ the royal treatment (The Daily Courier), Rated: AAA

Ramsey will also introduce HousingHub, a new initiative for B.C. Housing to provide more affordable rental and ownership housing for middle-income individuals and families.

Small businesses can apply for a short-term loan of up to $250,000 online, and if they qualify, the funds can be delivered electronically to the business in as little as one business day.

The agreement will use OnDeck’s data analytics and digital technology to make real-time lending decisions and Coast Capital Savings to provide the financing.

Authors:

George Popescu
Allen Taylor

The post Thursday July 18 2019, Weekly News Digest appeared first on Lending Times.

The Impact iFunding’s Troubles Will Have on Real Estate Crowdfunding

iFunding

Real estate crowdfunding (RECF) was a late entrant in the crowdfunding universe but has grown aggressively in the last few years. The industry size stood at a staggering $3.5 billion in 2016 and should cross $300 billion by 2025. Online real estate platforms are best suited to take advantage of this explosive growth. JOBS Act […]

iFunding

Real estate crowdfunding (RECF) was a late entrant in the crowdfunding universe but has grown aggressively in the last few years. The industry size stood at a staggering $3.5 billion in 2016 and should cross $300 billion by 2025. Online real estate platforms are best suited to take advantage of this explosive growth.

JOBS Act Title III allowed crowdfunding companies to onboard non-accredited investors, but the 1 million dollar limit diminished its effectiveness. It was Title IV with a $50 million limit which turned the tide in favor of real estate crowdfunding companies, and it was an important piece of legislation to remove the stranglehold of institutional capital in this trillion dollar market. But even though the industry has been on a growth spree, previously established players have struggled to compete effectively. The real estate market has its own traditions, rules, and processes and has been unforgiving to technocrats who believe that putting everything online is the solution to all problems. iFunding is the latest casualty of this flux in the industry.

iFunding: Downward Spiral

iFunding, one of the early pioneers of real estate crowdfunding, has been dealing in commercial and residential real estate investments since 2012. It had managed to raise almost $6 million of VC and crowdfunding capital on the back of its “superior due diligence and underwriting procedures,” which were supposedly considered a benchmark in the real estate crowdfunding industry. The company was founded by William Skelley, an executive with almost a decade of experience in consulting and investing.

First signs of trouble started showing when investors irritated with the deal performance and inability to solve the underlying issues started venting out on BiggerPockets, a leading real estate social network. The first deal to come undone was a Milwaukee project involving five fix-and-flip properties with an Orange Group. Multiple projects started seeing a delay in even principal repayments. Moreover, iFunding’s management team could not address the complaints of the aggrieved parties, which led to further badmouthing over social media. As a result, the platform was not able to materialize even a single deal since late 2016.

The company was also slapped with a lawsuit by sponsor-partner CapStack as iFunding “failed to raise the agreed-upon sum through its platform, and then repeatedly lied about its performance in a series of intentional delays and brinkmanship, causing CapStack injury and detriment.” The compensation being sought is over $585,000.

Subpoena: the final nail in the coffin?

The SEC issued a subpoena seeking clarification with respect to some operational doubts about iFunding, as it discovered that the startup was operating as a broker-dealer without having an appropriate license. In early 2016, a law firm made an attempt to restructure iFunding, but the company continued to face major headwinds and Founder-CEO William Skelley decided to leave the company. Following his departure, attempts were made by a consultant as well as some investors to operate the platform, but they were also met with a similar fate highlighting the gaping holes in the platform.

Multiple online reports have declared iFunding to be insolvent or on its brink. There are almost $20 million of investments and 400 investors still stuck on the platform. To salvage the investments, one of the largest investors in the platform–Jazco Property Management LLC–has decided to step in to manage the remaining assets of the company´s portfolio. According to Jazco, lack of proper management, financial control, and intentional delays in payments were the major reasons for this financial misery.

The Impact: Present and Future

Insolvency of iFunding will drastically impact investors’ confidence in the RECF industry. Investors, both institutional and non-accredited, will be more circumspect and cautious while deciding whether or not to invest in a RECF platform. This cautious approach by investors might slow down the growth prospects of the real estate crowdfunding industry, and can even be a death knell if few more cases like iFunding crop up in the future.

This incident will also sour the venture capital industry’s infatuation with crowdfunding portals in general and real estate crowdfunding platforms in particular. The space should see a reduced velocity in terms of deals and money flowing from VCs. More importantly, the valuations of the entire industry might take a hit. Corporate governance and due diligence will be the “disruption” and differentiating factors in this nascent space. Players who can showcase compliance and regulatory acumen of the highest order will survive.

But the iFunding insolvency is also an opportunity for bigger players; they can now lead the much-needed consolidation in the industry. The market was becoming oversaturated with online players popping up every week. Investors will now focus on only the biggest and the best, thus restricting any newcomer’s ability to dictate the market. Experts believe that the coming year will see four-five players emerge as leaders in this sector. The RECF industry needs to mature and start focusing on performance rather than just deal flow.

Author:

Written by Heena Dhir.

Friday August 18 2017, Daily News Digest

Europe private equity real estate

News Comments Today’s main news: iFunding insolvent, SEC issues subpoena. DreamFunded now offers Reg CF investment opportunities. MarketInvoice integrates with Veritas. Raisin passes 4B Euro mark. Today’s main analysis: China Rapid Finance reports unaudited Q2 results. European real estate investment up post-Brexit. Today’s thought-provoking articles: Community banks refuse to step down on ILC battle. How Swift makes renminbi payment frictionless. Small lenders […]

Europe private equity real estate

News Comments

United States

United Kingdom

China

European Union

Australia

  • Small lenders offer biggest savings on $1M property loans. AT: “There could be any number of reasons for this. One is that large lenders have massive overhead expenses and therefore are forced to charge higher interest rates and fees. Smaller lenders can use technology and agile business practices to cut costs.”

India

Asia

Africa

News Summary

United States

iFunding Insolvent, SEC Issues Subpoena as Investor Jazco Looks to Step In (Crowdfund Insider), Rated: AAA

iFunding, a real estate crowdfunding platform, is insolvent according to several sources.

In recent days, information has cropped up that investors have been left holding the remains of the company that included properties with an estimated value of $20 million. One individual estimated the number of impacted investors at 400 individuals. These Investors are now looking at options to salvage what they can from the crowdfunding platform.

Crowdfund Insider has been told the SEC did issue a subpoena at some point regarding the operational questions regarding iFunding. Specific details have not been made available but one individual suggested it had to do with the platform operating as a Broker Dealer without having the appropriate license.

DreamFunded Now Offers Real Estate Investments Using Reg CF (Crowdfund Insider), Rated: AAA

DreamFunded Real Estate has launched its first real estate investment opportunity under Reg CF. DreamFunded is a FINRA approved crowdfunding platform that may offer securities the newest crowdfunding exemption. This iteration of crowdfunding allows any investor access to these opportunities – not just wealthier, accredited types. DreamFunded is one of only two real estate crowdfunding platforms using Reg CF.

In ILC fight, community banks will not stand down (American Banker), Rated: AAA

Commentators who say we should do away with that historic separation should be aware that the community banking industry will once again fight tooth and nail against such a move. We fiercely and successfully opposed Walmart’s 2006 bid. More than a decade later, the core principle remains the same.

Allowing nonbank corporate conglomerates to own banks not only violates the U.S. policy of maintaining the separation of banking and commerce. It also jeopardizes the impartial allocation of credit, creates egregious conflicts of interest, and results in a dangerous concentration of commercial and economic power. It also extends the federal safety net to commercial interests, which is counter to the principles upon which the Federal Deposit Insurance Corp. was created.

The Independent Community Bankers of America’s main objection to the SoFi application for federal deposit insurance is that the ILC charter would allow the fintech company to avoid the legal prohibitions and restrictions under the Bank Holding Company Act (BHCA).

iPayment, Inc. Introduces New Business Unit: iPayment Capital (PR Newswire), Rated: A

iPayment, Inc., a trusted provider of payment and processing solutions for small and medium-sized businesses (SMBs), introduces iPayment Capital, a new business unit focused exclusively on merchant cash advance services.

iPayment Capital will formally launch this fall with a focus on iPayment’s more than 137,000 SMB customers. Adding merchant cash advance as a direct offering, the Company will significantly streamline the process for its customers, offering a simplified application, expedited reviews and approvals, and a seamless re-payment process.

The Company recently hired Mr. Tomo Matsuo as Senior Vice President to lead this important initiative. Mr. Matsuo spent over six years with Bizfi, a premier fintech company combining aggregation, funding and a participation marketplace on a single platform for small businesses, where he held several senior level positions including Chief Operating Officer.

Morgan Stanley Advisor Charged with Insider Dealing (Financial Advisor IQ), Rated: A

Morgan Stanley financial advisor Michael Siva is among seven people charged with making about $5 million trading on illegal leaks made by a former Bank of America employee, Bloomberg writes.

Daniel Rivas, a former employee at Bank of America’s capital-markets technology group, allegedly passed dozens of tips about unannounced deals to two friends, including his girlfriend’s father, James Moodhe, an assistant controller at a brokerage that prosecutors didn’t identify, according to the news service.

Moodhe allegedly passed the tips on to Morgan Stanley’s Siva, whose trades on the leaked deals allegedly made his clients more than $880,000 and $8,000 for himself, Bloomberg writes.

10 bold predictions about the financial advice industry’s future (Investment News), Rated: A

“In 10 years, we’ll be in the midst of the largest wealth transfer in history, as more than $30 trillion is passed to millennials.”

Lowell Putnam, co-founder and CEO, Quovo

“Clients are going to want more technology that they can touch. I think there’s going to be more of a collaborative piece to planning.”

Rose Price, financial planner, VLP Financial Advisors

“The emerging influence and affluence of women — specific to income, education, entrepreneurship and wealth — will further demand comprehensive planning and financial independence.”

Sameer Somal, chief financial officer, Blue Ocean Global Wealth

“As the Gen X and millennial generations become more empowered to take charge of their financial future, they will demand advice in an ‘instant’ … whether through an app, online digitally or virtually with an adviser.”

Julia Carlson, CEO and wealth adviser, Financial Freedom Wealth Management Group

“There will be commoditization of financial planning advice in the same way we’ve seen in investment management in the past, that’s going to offer the opportunity for further specialization.”

Nicholas Crow, president, Motley Fool Wealth Management

Here’s what an uptick in the US IPO market could mean for fintechs (Business Insider), Rated: A

Initial public offerings (IPOs) have been 

Crowdfunded real-estate investments: 3 ways to do it (MarketWatch), Rated: A

In fact, investment crowdfunding (excluding community fundraising tools like Kickstarter) could top $300 billion annually by 2025, according to CFX Markets.

A typical crowdfunded real-estate project raises anywhere from $50,000 to $3 million from individual investors; the total project size can range up to $30 million or higher. For a $10,000 investment, return expectations range from $700 to $1,200 for a one-year debt investment to $5,000 to $15,000 for a longer-term (over three to five years) equity investment.

Equity crowdfunding

Pros

• Lower barrier to entry: For as little as $5,000, individuals can invest in large, commercial real-estate projects and enjoy the benefits of real estate: strong returns, a low degree of correlation with public markets and historically lower volatility.

• High yield potential: As equity investors, individuals can share in uncapped gains.

Cons

• Risk remains: These investments do carry risk, and some investors may not know how to evaluate risk factors, such as local economy volatility, or potential for higher-than-expected construction costs.

• Lack of liquidity: Many of these investments entail a hold period of up to five years. No prominent secondary markets have emerged yet.

• It’s early: While many platforms tout positive aggregate return figures, it’s inevitable that some projects won’t go well.

Syndicated debt crowdfunding

Pros

• Less risky than an equity investment: Debt investors are entitled to repayment before equity investors earn a return, so these investments carry less risk.

• Extra diligence: The loans upon which these investments are based were originated by professional real-estate lenders, who often have a physical presence and expertise in the markets where they issue loans.

• Short hold period: Relatively short terms (typically under two years) allow investor to reinvest sooner, and reduces liquidity risk.

Cons

• Less upside than an equity stake: Though debt investments are generally more secure, they carry less upside, as the investor’s yield is limited to the interest rate of the loan.

• A middleman: The experienced real estate lender is an additional layer of diligence, but it’s also another party between the investor and the original loan. This typically means a net annual percentage return of 0.5% to 1% lower than platform-issued debt offerings (see below).

Platform-issued (‘pre-filled’) debt crowdfunding

Pros

• Less risky: Debt investors are the first to be repaid, and the investment is secured by the underlying property.

• Short hold period: The individual typically recoups their money in six months to two years.

• One less middleman: With the platform acting as the lender, one less party takes a fee.

Cons

• Less upside than equity, for the same reason that syndicated debt does.

• Less diligence: Unlike syndication, the only loan underwriting is done by the platform (acting as lender). Some platforms practice conservative underwriting, but the companies themselves may have limited operating histories and minimal experience in all the markets where they issue loans.

KeyBank Partners with Billtrust to Deliver Best-in-Class, Automated Accounts Receivable Solution (PR Newswire), Rated: A

KeyBank (NYSE: KEY) announced today its strategic partnership with and equity investment in Billtrust, a pioneer of payment cycle management solutions. This collaboration, along with the launch of KeyTotal AR™, marks the most recent in a series of partnerships with emerging fintech providers, affirming Key’s commitment to bringing innovative solutions to market. Terms of the investment were not disclosed.

The KeyTotal AR™ platform allows KeyBank’s corporate clients to improve operational efficiency during the invoice-to-cash process using electronic invoicing and payments in a flexible, cloud-based solution. Powered by Billtrust’s Quantum Payment Cycle Management solution, the platform accelerates cash flow by automating invoice delivery and payment and cash application. Merging this innovation with KeyBank’s broad range of accounts receivable (AR) capabilities has created one of the highest-level product suites available in the market today.

Top 5 Emerging Fintech Hubs in The U.S. (Bank Innovation), Rated: A

Atlanta

Atlanta has enjoyed a position as a hub for financial services, if not necessarily fintech, for quite a while. The city, which is presently playing host to a number of fintech startups, incumbents, and technology accelerators (including the Techstars Atlanta Program) is the place to be for payments companies, to the point where some have nicknamed areas of the hub things like “Transaction Alley.”

For the older guard of digital payments, companies NCR and WorldPay are both currently headquartered here, and of course, it’s the birthplace of the Atlanta Automated ClearingHouse, or ACH.

Startups like First Performance Global are innovating the authorization side of payments, using data analytics, social media, and automation to make sure its businesses stay competitive.

Austin

The city is home to older fintech residents like banking technology provider Kasasa, mobile trendsetter Malauzai, and digital banking solutions provider Q2 Holdings.

Now, Austin is headquarters to newer entrants like Draft, which is using the venture funding it received from Plug and Play and Envestnet Yodlee in order to build insights based on data analytics to help financial advisors avoid poor portfolio performances and to further build trust with clients. Companies like Self Lender are focusing attention on the under-banked, using digital savings plans to help users build up the credit they are missing from lack of access to more traditional financial products. Other startups like Able are focusing on the increasingly competitive small business lending market, aiming to fund SMBs at all stages with help from friends and family.

Miami

Take for example the startup Waleteros, a banking app geared specifically to serve the underbanked U.S. Hispanic customer.

Then there’s ClassWallet, an app geared specifically to help schools. This virtual wallet streamlines the process of payments and reimbursements for teachers and schools alike.

Catering to Miami’s entrepreneur demography is a startup like InvestReady, formerly known as Accredify. This company uses API integration to allow crowdfunding portals to verify investors, thus simplifying the tedious compliance and verification process. The company, which was founded in 2014, has to date raised $120K in funding.

Omaha-Lincoln, Neb.

D3 Technology in Omaha has become a stalwart in the mobile banking scene, helping institutions replace their aging, first-generation mobile apps with data-driven solutions and modern UX’s. Lincoln’s Hip Pocket is a financial wellness tool that allows users to save money with a swipe.

Washington D.C.

Some companies like Wealthminder are using digitized financial planning tools and investment recommendations fueled by data analytics to help its users to achieve longer term financial goals, such as funding college, buying a home, or retirement.

Startups like FS Card are busy re-designing credit, offering new options for small dollar loan customers to move towards more traditional (more affordable) credit products. Others, like StreetShares are enabling “social finance” for small businesses, allowing like-minded investors to fund small businesses through auctions (businesses pitch themselves through a simple mobile application, and investors compete to fund; the lowest bids are consolidated into one single loan with a low interest rate).

Recent FinTech Partnerships Bode Well for GH Capital (KFM BFM), Rated: A

Using aggregators also allow retailers to instantly offer multiple payment methods to the customers leading to a higher conversion rate. That’s why we see digital payment processing companies like Wirecard AG (WRCDF) expanding at a quick rate. The company registered a transaction volume growthof ~34% during the first quarter of 2017.

GH Capital Inc (GHHC), a gateway provider for online banking electronics payments, can also benefitfrom this trend. The company already entered in several partnerships with multiple payment processors. It recently partnered with Allied Wallet and has taken a 23% equity stake in VMoney.

GH Capital is involved in the provision of IPO services for small corporations.

BFS Capital Appoints Michael Marrache as CEO (BusinessWire), Rated: B

BFS Capital Inc., a small business financing company, announced that it has appointed Michael Marrache as Chief Executive Officer to succeed outgoing CEO and co-founder Marc Glazer. Named President in September 2016, Marrache previously served for more than three years as the company’s Chief Operating Officer. He also will join the company’s Board of Directors. Marc Glazer will continue to serve as Chairman of the BFS Capital Board.

Washington Capital Partners Rewrites the Rules of Flip-to-Rent Real Estate Investing (Press Release Rocket), Rated: B

Today, Washington Capital Partners (WCP), a hard money lender operating in the Washington D.C., Virginia, and Maryland areas, announced their new Flip-to-Rent Hybrid Loan product. This 3-year hard money loan allows fix and flip investors to immediately roll their property into a long-term rental loan.

United Kingdom

Fintech lender MarketInvoice to tap 400,000 strong customer base (AltFi), Rated: AAA

MarketInvoice continues on its mission to extend its services to a broader range of businesses. The invoice finance platform, which recently launched a new longer term funding line (MarketInvoice Pro), has forged a strategic alliance with credit management specialists Veritas Commercial Services.

Veritas is a leading credit management firm with a digital sales ledger platform called VeritasVirtual. Its customers use this platform to monitor the status of outstanding payments. The MarketInvoice platform has now been seamlessly integrated into VeritasVirtual, offering small business users access to MarketInvoice Pro – a funding line which is secured against their outstanding invoices.

China

China Rapid Finance Reports Unaudited Second Quarter 2017 Financial Results (PR Newswire), Rated: AAA

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF) today reported its unaudited financial results for the second quarter ended June 30, 2017. The Company will hold a conference call on August 17, 2017 at 8:00 am Eastern Time (8:00 pm Beijing Time) to discuss the financial results for the second quarter of 2017. Dial-in details are provided at the end of this release.

Second Quarter 2017 Financial Highlights

  • Total gross billings on transaction and service fees[1] grew by 59% year over year to $24.5 million, or 46% over the previous quarter.
  • Gross billings from consumption loans exceeded gross billings from lifestyle loans, marking an important milestone. Gross billings from consumption loans increased by 642% year over year to $13.2 million, or 97% over the previous quarter. Gross billings from consumption loans represented 54% of total gross billings as compared with 12% in the prior year period, and 40% in the previous quarter. Gross billings from lifestyle loans were $11.3 million as compared with $13.7 million in the prior year period, or $10 million in the previous quarter. Gross billings from lifestyle loans were 46% of total gross billings, as compared with 88% in the prior year period, and 60% in the previous quarter.
  • Net revenue increased by 9% year over year to $15.2 million (after netting off customer acquisition incentives of $8.1 million) from $13.9 million (after netting off customer acquisition incentives of $0.6 million) in the prior year period, and 45% over the previous quarter from $10.5 million (after netting off customer acquisition incentives of $5.3 million) in the previous quarter.

Second Quarter 2017 Operating Highlights

  • Number of new borrowers added in the second quarter of 2017 was 760 thousand, increasing 39% over the previous quarter. As of June 30, 2017, the Company had 2.7 million unique borrowers.
  • Total number of loans facilitated grew by 354% year over year to 5.1 million, or on average 55 thousand loans facilitated per day. Total number of loans facilitated since inception reached 20 million.
  • Total loan volume facilitated increased by 244% year over year to $720.7 million. Consumption loans facilitated increased by 431% year over year to $637.5 million, with lifestyle loans facilitated totaling $83.2 million, as compared with $89.7 million in the prior year period.
  • Average cumulative loan volume per borrower of the Q4 2015 cohort increased to approximately $1,550 in their 18th month on our marketplace from approximately $1,300 in the 15th month. Average cumulative loan volume per borrower of the Q1 2016 cohort increased to approximately $1,340 in their 15th month on our marketplace from approximately $1,099 in the 12th month.
  • Repeat borrowers on the Company’s marketplace accounted for 72% of the total borrowers as of June 30, 2017.

Sohu’s Fox Fintech Group Approved to Obtain First Internet Micro-credit License Issued by Ningbo City Government (PR Newswire), Rated: A

Recently, the Finance Office of Ningbo City Government approved a subsidiary of Fox Financial Technology Group Limited (“Fox Fintech Group” or “the Company”), an affiliate of Sohu.com Limited (NASDAQ: SOHU), to obtain the city’s first internet micro-credit license. This is a milestone that shows Ningbo City Government’s positive stance towards leading internet companies to set up fintech-related businesses in the city.

European Union

Savings Marketplace Raisin Passes the €4 Billion Mark Faster than Any Wealth Management Fintech (Crowdfund Insider), Rated: AAA

Headquartered in Germany, Pan-European savings marketplace Raisin reports that in less than 4 years its customers have invested more than €4 billion in the platform’s savings products. As a result, Raisin is the leading marketplace for investments in Europe and one of the fastest growing Fintechs in the world.

Founded in 2013 as the first marketplace for investments in Europe, Raisin is now about twice the size of its next largest competitor.

Source: Crowdfund Insider

European real estate investment up on Brexit (Pensions&Investments), Rated: AAA

The immediate impact of 2016’s Brexit vote on private equity real estate investing in the second half of the year carried over into 2017, with reciprocal effects in mainland Europe. The first half of 2017 saw 201 deals closed, down from 315 and 302 in the first six months of 2016 and 2015, respectively. Continental Europe saw about 500 deals close between January and June 2017, as compared to about 400 halfway through 2016 and about 300 at 2015’s midpoint.

Source: Pensions&Investments
International

How Swift makes renminbi payment frictionless (The Asset), Rated: AAA

Swifts’s gpi enables banks to make cross-border renminbi payments to Chinese companies. By collaborating with China’s Cross-border Interbank Payment System they aim to make renminbi payments as fast as possible, Michael Moon, head of payments markets for Asia-Pacific at Swift, tells The Asset.

A recent Swift report shows that the renminbi only ranked sixth as a share of total global payments by volume.

Malaysia and Germany are the two countries which have had the highest growth in renminbi utilization for the past three years. For the first six months of 2017, Malaysia and Germany have seen a 551% and 436% growth respectively, compared to the same period in 2014.

SONM Advisory Board Onboards Digital Economist Paolo Tasca (Finance Magnates), Rated: B

Supercomputer Organized by Network Mining (SONM) has made an announcement regarding digital economist Paolo Tasca having joined the company’s board of advisors.

Tasca is the founder of the Centre for Blockchain Technologies at the University College London (UCL) and currently holds the role of Executive Director there. Prior to this position, Tasca acted as Lead Economist for digital currencies and peer-to-peer lending at Deutsche Bundesbank, which is located in Frankfurt, Germany.

Australia

Small lenders offer biggest savings on $ 1m property loans (Financial Review), Rated: AAA

Small lenders are offering the lowest rates on $1 million mortgages, with some products potentially lowering repayments by $500 a month, or $200,000 over a 30-year term.

The loan sizes have crept up as the median price of a property in Sydney hit $1.15m and about $850,000 in Melbourne.

Loans.com.au, an online lender, and Mortgage House Advantage offer the lowest variable, principal and interest rate for an owner-occupier of 3.64 per cent, or monthly repayments of about $4569.  That compares to an average rate of 4.27 per cent, a difference of 53 basis points, $362 a month or $130,000 over a 30-year term.

Australian Unity has a top rate for interest-only, owner occupiers of 3.79 per cent, or $3158 in monthly repayments. There is a $600 application fee. The average basic variable rate in the category is 4.73 per cent, a difference of 94 basis points, $551 a month or more than $198,000 over a 30-year loan.

Loans.com.au offers owner occupier, interest-only loans at 3.89 per cent, or $4711 in monthly repayments. That compares to an average rate of 4.53 per cent, a difference of 64 basis points, or $374 a month, or more than $134,000 over 30 years.

India

Online lending startup KNAB Finance raises funds from InCred, others (VC Circle), Rated: A

KNAB Finance Advisors Pvt. Ltd, a fin-tech firm that provides unsecured working capital loans to small and medium-sized enterprises (SMEs), has raised a little over Rs 2.5 crore in two funding rounds, a top company executive told VCCircle.

Non-banking financial company (NBFC) InCred, and over a dozen individual investors including Mindtree executive chairman Krishnakumar Natarajan and Sharjah Islamic Bank’s senior vice president Ravi Bhardwaj invested in the company.

The startup extends loans with an average ticket size of Rs 6 lakh, and it has disbursed Rs 10 crore worth of loans so far. It also offers short-term loans, allowing customers to close them within a month.

Asia

The potential impact of AI on trade finance (The Asset), Rated: A

HSBC announced that it was working with IBM to create a cognitive intelligence solution aimed at extracting key data from trade documents before entering the bank’s formal system. The bank typically processes over US$500 billion worth of trade documentation for customers and must manually review an estimated 100 million pages of documents annually.

In Singapore, financial technology firm Silent Eight has alternatively proposed using AI solutions to support bank analysts and investigators with their fight against AML violations and terrorism financing.

Africa

8 Zambian startups graduate from BongoHive accelerator (Disrupt Africa), Rated: A

The eight startups taking part in the programme were gaming startups LudoHuband Gamers Entertainment Meet (GEM), food startup InspireMe Trading, development and design startup Orbitrix Programming Solutions, flowers company Unforgettable Moments, real estate crowdfunding startup LCB Moguls, agri-tech startup eMsika, and interior design company Kreate Interiors.

Authors:

George Popescu
Allen Taylor

Tuesday August 15 2017, Daily News Digest

corporate bond credit spreads

News Comments Today’s main news: Prosper reports strong Q2, closes $500M securitization. Zopa to refund investors affected by IT glitch. RateSetter in final stages of FCA authorization. Funding Societies joins international association of credit portfolio managers. Goldmoney reports Q1 profits, plans to open physical branch. Today’s main analysis: Third largest corporate note offering easily digested by bond market. Today’s thought-provoking […]

corporate bond credit spreads

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Canada

Africa

News Summary

United States

Prosper Progress: Online Lender Reports Strong Q2 Growth, Closes $ 500 Million Securitization (Crowdfund Insider), Rated: AAA

Summary of Key Financial Highlights for Prosper during the quarter:

  • Prosper facilitated $775 million in loan originations through its platform, up 32% quarter-over-quarter and 74% year-over-year driven by strong demand for its personal loan product.
  • Transaction fee revenue rose to $35.4 million, up 32% quarter-over-quarter and 84% year-over-year.
  • The company reported a Net Loss of $41.4 million in the second quarter of 2017, which included $39.3 million in non-cash charges related to warrants to purchase preferred stock that were issued to a consortium of investors, and a third party in connection with a settlement agreement.
  • Prosper generated $8.6 million of Net Cash from Operating Activities and Adjusted EBITDA of $6.7 million in the second quarter of 2017, driven by an increase in origination volume, improved marketing efficiencies and lower general and administrative expenses.

Third-largest corporate note offering easily digested by bond market (Morningstar), Rated: AAA

From a microeconomic perspective, second-quarter earnings reports have generally been in line, with the usual amount of hits and misses. Thus far, our corporate credit analysts have not discerned any significant change to their sector outlooks. From a macroeconomic perspective, second-quarter real GDP was reported to have expanded an annualized 2.6%, and as widely expected by the market, the Federal Reserve did not make any change to monetary policy.

In the corporate bond market, the average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade bond market) continued its tightening trend but declined only 1 basis point to end the week at +106. In the high-yield market, the BofA Merrill Lynch High Yield Master Index tightened 5 bps to +359. In equities, the S&P 500 was unchanged and volatility sank to new lows.

Fund flows in the high-yield market came to a near standstill last week, as the amount of redemptions from high-yield exchange-traded funds more than offset inflows into open-end funds, resulting in a net outflow of $0.1 billion.

Chatter Increases that Earnest is Up for Sale. Again. (Crowdfund Insider), Rated: A

Back in May, Crowdfund Insider reported that Earnest, an online lender providing personal loans, was up for sale. Referencing a report in Bloomberg, the rumor was quickly squashed by Earnest representatives who told this publication they were absolutely not for sale.

But now the chatter is increasing that Earnest is, in fact, on the auction block.  Apparently management is attempting to sell itself for $200 million. Alternatively, Earnest needs a quick equity injection of $50 million. Otherwise, things don’t look so good.

Millennials are financing everything from bed sheets to concert tickets (MarketWatch), Rated: A

In recent years, payment companies including PayPal PYPL, +1.76% Affirm and Bread have created installment plans for retailers that give consumers the option to finance the weirdest purchases over time.

These payment methods have taken hold at a time when millennials have been more reluctant than their parents to use credit cards. Millennials had about two credit cards each on average last year, according to the credit reporting company Experian. That’s compared with about three for boomers and an average of 2.5 for members of Generation X.

Brooklinen partnered with the payment company Affirm in June to offer a payment plan spread over three, six or 12 months. Financing doesn’t come cheap: Rates range from 0% to 30% APR, after Affirm checks the buyers’ credit and approves them. That compares to an average APR of almost 17% for credit cards — or zero if you’re paying with cash.

If the consumer does not pay within 120 days, Affirm no longer lends to that person, and writes off the debt. Affirm then sends the remaining balance to a third-party debt collector, which Affirm supervises, but Affirm does not package and sell the balances, Metcalf said. Affirm makes its money from simple interest consumers pay, Metcalf said.

PayPal offers two types of credit, both as part of a program called PayPal Credit. One option is to wait six months without paying anything, and no interest on purchases over $99 from select retailers. The other option is an installment payment plan called Easy Payments: Consumers pay interest at an APR of 19.99% if they don’t first pay off their balance within the term they select.

DiversyFund Announces First Ever ‘No Fee’ Real Estate Income Fund (Digital Journal), Rated: A

DiversyFund, Inc., a fast growing, online real estate investment platform, announced the first ever “no fee” real estate debt fund to investors today. With the Fund, investors gain the ability to invest in a diversified portfolio of real estate debt investments that target risk-adjusted returns and generate passive income.

The Fund already has an impressive four-year track record since its launch in March 2013, posting an average annualized net return of 11.4% since inception through Q1 2017, a track record that few Wall Street funds have been able to match. The Fund targets passive income by making real estate-backed debt investments in assets featured on DiversyFund’s platform. The Fund makes quarterly distributions of interest income to its investors and has never lost any investor principal.  The minimum investment amount is $10,000.

How Some Savvy FAs are Overtaking ‘Basic’ Robos (Financial Advisor IQ), Rated: A

Robo advice for mass-affluent investors keeps evolving. But brick-and-mortar advisors aren’t standing still. In fact, some traditional FAs are taking into their own hands ways to automate more sophisticated types of holistic planning – from philanthropy to tax strategies and healthcare issues.

For instance, Heron Financial uses a mobile app, Mobile Assistant, that helps Edwards turn client meetings into easy-to-disseminate notes in Redtail, the firm’s CRM system.

Savant Capital says it’s licensing new off-the-shelf software suites to create their own robo-like experience for clients.

By year’s end, Savant expects to start beta testing its own robo-style package that automatically plucks key data from a family’s tax returns.

Savant is also working on a similar tool to automate estate planning. It’s designed to automatically sort through internal client reporting software, CRM data and core financial planning databases to identify an appropriate estate planning strategy from 120 different scenarios, according to Brodeski.

Advisor Jonathan Swanburg in Houston isn’t writing special algorithms. But his employer, Tri-Star Advisors, finds it can achieve similar results automating more areas of clients’ comprehensive plans by taking advantage of new algorithms being embedded in core prepackaged financial planning suites.

Behalf Inc. Partners with FinWise Bank to Offer Small Business Loans (LendIt), Rated: A

Behalf, a rapidly growing on-demand commercial credit platform, today announced its partnership with FinWise Bank.

Operating since 2013, Behalf is an alternative financing provider that facilitates commerce between business buyers and sellers. Driven by data and technology, Behalf allows merchant partners to offer business customers instant credit and flexible payment terms at the point of sale. Once approved, Behalf customers can use their credit line to fund purchases with virtually any vendor, including MasterCard accepting businesses.

LendingTree Announces Finalists for $ 25,000 Startup Innovation Spotlight (Markets Insider), Rated: A

LendingTree®, the nation’s leading online loan marketplace, today announced the five finalists for its new initiative to showcase the top startup companies in financial technology (fintech) lead generation at LeadsCon this summer.

  • Traaqr
    Brian Handrigan, Co-Founder & Co-CEO

This SaaS disruptor is bringing click level analytics to companies of all sizes while providing automated data capture at a precision never believed possible before.

ForeverCar works with consumers to find and compare quotes for the right vehicle protection plan, and offers concierge support when a vehicle needs service or repairs, keeping you up-to-speed throughout the repair process.

  • Outleads
    Dorin Rosenshine, Founder and CEO

Outleads integrates with leading contact center software, including Genesys, Five9, and more, and onboards CRM data directly into Adobe Analytics, Google Analytics™ & AdWords™ for conversion attribution and real-time retargeting.

LeadCrunch solves the problem of finding optimal B2B targets by analyzing a company’s best customers to identify “Smart Personas”, and then engages look-alike personas with relevant content to generate permission-based leads.

Starbutter AI is a voice and chat app development company focusing on chatbots and AI agents, giving consumers high quality information so that they can pick the best financial products and helps financial companies match the right products to their customers.

The age of e-mortgages finally arrives (Scotsman Guide), Rated: A

The Michigan-based lender United Wholesale Mortgage recently received much media attention for rolling out what it claimed to be the first-ever truly digital mortgage after a Chicago couple in late July completed the entire process of refinancing their mortgage from a computer.

What was supposedly newsworthy about this event — worthy to be featured in an Aug. 9 article in the Wall Street Journal — was that a notary was remotely patched in for the e-signing, and didn’t have to be present in the couple’s home.

A male employee claims he was fired after reporting sexual harassment at a $ 4 billion startup (Business Insider), Rated: A

But a lawsuit filed on Friday against hot fintech startup Social Finance, better known as SoFi, is strikingly different.

This suit has been filed by a male employee who claims that he saw sexual harassment of his female coworkers and was fired after he reported it, according to a report by The New York Times’ Nathaniel Popper.

SoFi Harassment Suit (Fortune), Rated: A

Charles’ lawyer says he will file another lawsuit this week claiming broader employee mistreatment and seeking class-action status.

Fintech Startup SoFi Faces Wage, Retaliation Suits (Law360), Rated: A

Social Finance Inc. was hit with a wage-and-hour putative class action in California court Monday, just days after a former worker sued the financial startup, alleging it fired him for reporting the harassment of a female coworker and for reporting managers who fraudulently canceled loan applications to reap bonuses.

Five employees — Sean Pullen, Christina Cane, Michael Carrera, Matthew Taylor and Yulia Zamaora — allege that San Francisco-based SoFi failed to provide them with meal and rest breaks, failed to pay them for overtime and all….

Income& Selected for Highly Competitive Plug and Play Fintech Accelerator (LendIt), Rated: A

Income&, a real estate investment platform based in San Francisco, announced today that it was one of 24 startups selected for the sixth class of the Plug and Play Fintech Accelerator. The company will participate in a 12-week accelerator program geared toward financial technology startups, during which time it will gain access to Plug and Play’s extensive network of leading banks and financial institutions. Income& was among 3% of startup company applicants selected from a highly competitive pool for the fall 2017 Plug and Play Fintech Accelerator class.

How One Lawyer is Making Real Estate Investing Safer (Markets Insider), Rated: A

Last year, attorney Amy Wan, received a call from a real estate developer client who was trying to raise $300,000 from investors to acquire an investment property. When he asked how much the legal services would be, she gave him a flat fee of $10,000.

While working as a Partner in Crowdfunding Lawyers, a boutique real estate securities law firm, Wan says she began to come face-to-face with the reality that clients doing small raises could not afford her services.

She was named one of “Ten Women to Watch in LegalTech” by the American Bar Association Journal, and pivoted to a career in securities law when she became General Counsel of Patch of Land, a real estate crowdfunding startup. At Patch of Land, Wan works to help democratize investment opportunity. Now, she hopes to democratize access to counsel for small businesses.

Bootstrap Legal is a legaltech/fintech startup based in Los Angeles.

E-Signatures & Digital Lending: How to Move 99% of Customers off Paper (Bright Talk), Rated: A

In the sub-prime lending market, speed-to-close determines market share. Join us to learn how an end-to-end digital process with e-signatures transformed OneMain’s lending business – positioning the lender as the largest personal loan company in the U.S. Today,99% of OneMain’s loans are e-signed, enabling them to be closed and funded significantly faster than on paper.

In this 60-minute presentation, you’ll learn how the company took a phased approach and implemented e-signatures in the call center and online channels, then expanded to the branch network. This year, OneMain will complete its e-signature roll-out to 1,700 branches, where the majority of its loans are transacted.

Presenters

David Smith, Vice President, Application Systems, OneMain
Philip Hannah, Director of IT, OneMain
Mary Ellen Power, VP Marketing, eSignLive by VASCO

Live online Aug 31 11:00 am United States – Los Angeles  or after on demand

SEC Suspends OTC-Traded Emerging Markets Investor Over ICO Concerns (Coindesk), Rated: A

Issued August 9, the order was made against a firm called CIAO Group (now rebranded as NuMelo Technology), which trades on markets operated by OTC Markets Group. NuMelo first announced plans for an ICO on July 6, at the time indicating a desire to bring a “digital financial products marketplace” based on blockchain tech to the African market.

ETHLend announces date of LEND token presale and ICO (CryptoNinjas), Rated: B

ETHLend token pre-sale details:

Starting: 25.09.2017 at 12.00 GMT

Ending: 25.10.2017 at 23.59 GMT or when the cap is reached

AMOUNT TO RAISE: 2,000 ETH

TOKENS FOR SALE: 60,000,000,LEND (6% of total sold tokens)

LEND TOKEN PRICE: 30,000 LEND = 1 ETH

(price includes 20% bonus tokens for all pre-sale participants)

Minimum amount to participate: 1 ETH

ETHLend token pre-sale details:

Starting: 25.09.2017 at 12.00 GMT

Ending: 25.10.2017 at 23.59 GMT or when the cap is reached

AMOUNT TO RAISE: 2,000 ETH

TOKENS FOR SALE: 60,000,000,LEND (6% of total sold tokens)

LEND TOKEN PRICE: 30,000 LEND = 1 ETH

(price includes 20% bonus tokens for all pre-sale participants)

Minimum amount to participate: 1 ETH

3 Stocks That Doubled So Far in 2017 (Madison), Rated: B

LendingTree’s efforts have proven immensely successful. In its most recent quarter, the online loan marketplace reported record results both from mortgages and other types of loans, and the number of loan requests jumped by nearly half to 5.4 million. In particular, efforts to expand beyond the mortgage realm have been extremely lucrative, as non-mortgage product revenue more than doubled in just the past 12 months.

United Kingdom

Zopa to refund investors affected by technical glitch (Bridging&Commercial), Rated: AAA

The technical issue has now been fixed and Zopa will be refunding impacted investors the difference between the amount paid and the true value of the loans purchased.

RateSetter in “final stages” of FCA authorisation process (P2P Finance News), Rated: AAA

RATESETTER believes it is in the “final stages” of reaching full authorisation after becoming the last of the main peer-to-peer lenders to be trading on interim permissions.

The platform is the last of the Peer2Peer Finance Association (P2PFA) members still awaiting full permission after ThinCats announced it had received Financial Conduct Authority (FCA) authorisation last week.

Invesco sells £9.6m Ranger Direct Lending fund stake (AltFi), Rated: A

Invesco Perpetual, the asset management giant, has been trimming its exposure to the £243m Ranger Direct Lending fund amid a testing period for the alternative credit investment trust.

The firm is one of Ranger’s largest investors with, until this week, just under a third of total shares in the fund.  This, however, has been trimmed in the past seven days, according to regulatory documents, with Invesco Perpetual’s current holding now down at 27.9 per cent.

Invesco Perpetual, who owns the fund as an income play within their fleet of top equity income portfolios, sold £9.6m worth of Ranger’s stock last week.

London fintech Tail is a cashback platform built on the promise of Open Banking (TechCrunch), Rated: A

London-based Tail is a new fintech startup that offers a glimpse into the promise of Open Banking. This is seeing upcoming legislation in the EU and U.K. force banks to offer third-party developer access to your bank account data — with your permission, of course.

The app, initially available for iOS and serving London only, offers heavy discounts at local places to eat and drink, all linked to the card you pay with and delivered each week in the form of cashback. However, the draw is how seamlessly it all takes place, by being built on top of digital-only challenger bank Starling‘s API, with Monzo integration also in the works.

Hargreaves Lansdown cashes in on (not too much) excitement (FT Alphaville), Rated: A

Back on August 4, the Financial Conduct Authority said it needed to “reassess” the broker’s capital requirements, because of its plans to do things a little more interesting than selling investment funds – such as offering an online cash deposit service, and lifetime individual savings accounts.

That meant Hargreaves had to retain another £50m, scrap its planned special dividend, and reassure the market of its profitability ahead of schedule.

Hence, this morning’s results contain no real surprises. Its 21 per cent rise in pre-tax profit, to to £265m, for the year ending June 30 had been rushed out with the capital announcement 11 days ago, “to allow investors to assess its strong financial and trading performance”.

P2P lenders offering rates up to five times better than mainstream best buys (P2P Finance News), Rated: A

THE MAIN peer-to-peer lenders are currently offering rates five times higher than the best offerings on the mainstream savings market.

It comes as a new challenger bank launched last week called PCF, offering a fixed savings rate of 2.6 per cent.

This may come with Financial Services Compensation Scheme (FSCS) protection, but seven years is a long time to lock up your money for and savers could do better by taking a bit more risk with a P2P platform.

P2P investors can earn up to 6.1 per cent a year for backing consumer loans, even while using an Innovative Finance ISA (IFISA).

End of Line for iFunding? Real Estate Crowdfunding Site May Be Done (Crowdfund Insider), Rated: A

The chatter on Bigger Pockets regarding iFunding has taken a new twist. In a series of public posts investors are referencing a possible bankruptcy for the real estate crowdfunding platform.

According to the posts, a company named Jazco has offered to take over the remaining deals that have funded on the iFunding site.

Fewer Advisors View Robos as a Threat (Financial Advisor IQ), Rated: A

Sixty-six percent of advisors are undecided about whether robos are a positive or negative force for their practice, according to a survey of 102 advisors by U.K.-based Panacea Adviser cited by FT Adviser. Just last year, when Panacea Adviser last conducted the survey, a whopping 89% of respondents said robo-advisors were a threat, according to the paper. The rate of incorporating robos into traditional advice practices is also picking up. While only 2% of advice firms surveyed this year currently offer a robo platform, 8% are in the process of integrating one and 12% are considering doing so, FT Adviser reports.

Buy to Let mortgages and peer to peer lending explored (AXA), Rated: A

Zoopla research from May 2017 discovered that it’s now cheaper to rent than to buy in 54% of UK cities.

Those with good credit ratings could be offered interest rates as low as 3%. If your credit rating is not so great, however, rates can rise to as high as 30%.

Is this the end of fintech as we know it? (Banking Technology), Rated: A

In the age of the internet, fintech dominates finance. In the UK, the sector is currently worth £7 billion, employing around 60,000 people with figures set to increase.

With unseen levels of growth in fintech, it’s important for companies to make sure that they don’t fall prey to the same mistakes their predecessors did. The easiest way to do so is by sticking to regulation standards.

As online banking slowly becomes the norm for managing money, it’s only natural that online banks emerge. Usage of online banking has more than doubled since 2007, kindling a banking revolution through which the UK has lost 40% of its banks and building societies since 1989. Online banks offer two key services: better banking deals and superior user experience.

Challenger banks like MonzoAtom and Starling have been making a lot of noise in this new banking arena. In 2016, Monzo raised £1 million in just 96 seconds in the fastest crowdfunding campaign ever. Atom Bank established its base outside of London, and Starling is now expanding outside the UK.

LendInvest signs up former Interbay BDM (Mortgage Strategy), Rated: B

Specialist lender LendInvest has appointed Andy Virgo (pictured) as its first BDM for the South of England.

Virgo will be responsible for sourcing deals across the South of England and joins LendInvest from Interbay Commercial, the commercial mortgage lending arm of OneSavings Bank, where he was a senior BDM.

ONLINE LENDER QUIDIE UNVEILS NEW MARKETING PUSH (ResponseSource), Rated: B

Croydon based online lending company, Quidie has launched a new digital marketing campaign to support sales of its new low rate short term loan products (of up to £1,000 with a fixed interest rate of 180%*) which are available to qualifying UK consumers exclusively online via the website.

The new campaign includes a 40 second video ad starring up and coming rapper and actor Craige Middleburgh.

London-based Integrated Marketing Agency Brandnation was responsible for all campaign creative and production. Brandnation is also handling all supporting PR and Social Media activity for the campaign.

China

The Score On Tencent’s Credit Scoring (PYMNTS), Rated: AAA

Hong Kong Stock Exchange to Launch Blockchain-Powered Market in 2018 (Coindesk), Rated: A

The Hong Kong Stock Exchange (HKEX) is planning to launch a blockchain-powered private market aimed at helping smaller firms obtain financing.

HKEX chief executive Charles Li detailed the plan, which would play out through a separate venture dubbed HKEX Private Market, in an August 1 note.

China’s biggest unicorns are a different breed (NASDAQ), Rated: A

China boasts 695 million mobile web users and shops more online than anywhere else in the world, with e-commerce sales likely to top $1.1 trillion this year, according to eMarketer, or more than twice the outlay in the United States.

China’s startups confront a particular set of regulatory risks. A crackdown on peer-to-peer lending and online “wealth management products” has probably delayed flotations by both Ant and Lufax, for example.

And Didi, which now has no serious local rivals, recently took in more than $5 billion from Japan’s SoftBank and others.

Overall, VC and private equity funds ploughed 384 billion yuan ($57.5 billion) into startups in the first half, according to Zero2IPO, not much changed from the previous year’s frantic pace. Local giants Baidu, Alibaba, and Tencent have deep pockets and want to keep emerging threats under control. They boast stakes in or ties to more than half of the top ten. SoftBank is also eyeing China as it invests a $93 billion mega-fund.

European Union

Fintech CEO says tech giants like IBM may go on M&A ‘shopping spree’ for start-ups in 2018 (CNBC), Rated: A

Tech giants like IBM and Capgemini could go on a mergers and acquisitions “shopping spree” for financial technology (fintech) start-ups next year, the chief of one such start-up has told CNBC.

new European directive, which becomes effective in January 2018, would enable third party businesses to monopolize on banks’ software and customer data to build new products – something referred to in the fintech world as “open banking”.

Döderlein, whose company helps develop mobile payments products for 17 banks, said that this would result in big, mainstream tech companies snapping up smaller fintechs to harness the newer technologies they have on offer.

International

Visa’s Latest Big Bets in Fintech (The Motley Fool), Rated: AAA

When extolling the virtues of long term, buy-and-hold investing, it’s hard to think of a better example than Visa Inc. (NYSE:V). Since going public in March 2008, Visa’s shares have returned well over 600%, crushing the market in the process.

Broadening its partnership with a Pal

Was it really just a little over a year ago when, after a frosty and testy co-existence as business frenemies, that Visa and PayPal Holdings Inc (NASDAQ:PYPL) first struck a deal covering their North American business?

For starters, in Europe, Visa Checkout will automatically be enabled at any merchant utilizing PayPal’s Braintree payment processing. More impressively, however, is that, since PayPal holds a banking license in Europe, Visa will be issuing PayPal debit cards in Europe.

Kleaning up with Klarna

Visa also recently announced a strategic investment in and a new partnership with Klarna, a European online payments company that offers credit and flexible payments during the checkout process at online merchants.

Going to the market with Marqeta

Finally, in its most recent fintech deal, Visa announced a multiyear partnership and strategic investment in Marqeta, an open API (application programming interface) card issuer platform. Marqeta offers a number of payment solutions for issuers for on-demand delivery, alternative lending, the disbursement of earnings and rewards to card holders, advance cost controls, and on-demand virtual and tokenized cards.

Foolish takeaway

The payments industry is changing rapidly, with fintech start-ups and larger financial institutions all wanting a bigger piece of the pie. That is why Visa shareholders should take heart that the company is making constant investments to ensure it gives its clients and card holders the best payment experience possible.

The 10 largest P2P and marketplace lending deals of Q2 2017 (AltFi), Rated: AAA

The three months of this year, from April to the end of June, was a particularly active period for fundraising in the space. The top ten deals to marketplace lending companies received a combined investment total of $658m in the second quarter of the year, which represents 84 per cent of the total capital committed to deals in the sector, according to data provider Fintech Global.

The largest deal in Q2 went to Chinese P2P lender Tuandaiwang which raised a whopping $262.6m of private equity funding in May. This was the only marketplace lending company in Asia to feature in the top ten deals.

Fintech: Why It Matters So Much to Your Investment (FX Daily Report), Rated: A

In their latest report, Accenture established that international investment in fintech blast through the roof in just a couple of years. From $ 800 million in 2008, the figure has moved up to $ 12 billion by the onset of 2015. In Europe, the growth rate rose by 215% to $1.48 billion between 2008 and 2014. This figure is expected to continue going up and having a huge impact on individual businesses and institutions.

Transferring cash within and outside the country had made the traditional methods complicated, expensive, and unrealistic. However, latest technologies have made international cash transfer easy, transparent, reliable, and highly secure. Using online wallets such as Skrill, GOOG, and others, money is transferred within seconds and accounts maintained in top conditions.

India

Fin-tech startup DigiLend raises funds from InCred, Fullerton (VC Circle), Rated: AAA

Mumbai-based fin-tech firm DigiLend Analytics & Technology Pvt Ltd has raised nearly Rs 2 crore ($311,939) from two non-banking financial services companies, filings with the Registrar of Companies show.

Mumbai-based InCred Finance and Temasek-owned Fullerton India Credit Company Ltd have made the investment, the filings indicate.

DigiLend will use the funds to pilot its product in the personal loan segment, Dattani said.

Asia

Funding Societies Joins Prestigious IACPM and Welcomes Risk Expert Terry Tse to Board of Directors (Markets Insider), Rated: AAA

Funding Societies has become the first and the only peer-to-peer (P2P) lending company to attain membership at the International Association of Credit Portfolio Managers (IACPM), a prestigious forum for credit risk management. In addition, risk expert Terry Tse joins Funding Societies’ Board of Directors. Mr. Tse is the former Chief Risk Officer of Dianrong — one of China’s leading P2P lending platforms.

Together with sister platform Modalku, Funding Societies is currently the biggest SME loan crowdfunding platform in Southeast Asia, with operations in SingaporeIndonesia, and Malaysia. Recently, Funding Societies has also become the only Southeast Asian digital lender to be selected by CB Insights to the Fintech 250, a list of 250 top private companies changing the face of financial services around the world.

Canada

GOLDMONEY REPORTS FIRST QUARTERLY PROFIT OF $ 3.3 MILLION, PLANS TO OPEN PHYSICAL BRANCH IN TORONTO (Betakit), Rated: AAA

Toronto-based Goldmoney, a gold-based payments and savings platform that allows users to acquire, store, and spend gold that is stored in a secure vault, has released the financial results for its first quarter of 2018, which ended on June 30, 2017.

Goldmoney reported an adjusted profit of $3.3 million and an IFRS profit of $2 million. The company said this is the first time it’s reported a quarterly profit in Goldmoney history.

Goldmoney also reported a quarterly revenue of $125 million, suggesting improvement from $112 million year-over-year (YoY).

Canadian Small Business Growth Continues (Lessors), Rated: A

PayNet, the premier provider of credit assessments on private companies reports that the PayNet Canadian Small Business Lending Index (CSBLI) increased 1% to 123.8 in June 2017 from 122 in May, the third month in a row of year-over-year increases. Compared to May 2016 the CSBLI is up 5%.

The Construction sector investment increased 4% which continues to reflect improvements in housing starts and prices throughout much of the country. Accommodation and Food fell 5% while all other segments were within 3% of May 2017. Growth geographically remains broad based as well with British Columbia and Quebec showed the largest increases from May, both up 3%, while Atlantic Canada exhibited the largest decrease (3%).

The financial health of Canadian companies continues to maintain stability with relatively few signs of deterioration of financial health. The PayNet Canadian Small Business Delinquency Index (CSBDI) 31-180 days past due held steady at 1.09% in June from May 2017. Compared to June 2016, delinquency decreased (10 bps).

Agriculture delinquency decreased by (11 bps), the largest monthly decrease amongst all industries in June.

Africa

Nigeria’s Fintech industry has grown by over 90 % in 4 years (Business Day Online), Rated: AAA

In 2009, we began to look at how digital  is affecting the economies and consumers. The economy has changed, the world has changed. We now live in global, digital economy and because of that, one of the key things that makes money gets to businesses is through payment.

Fintech in Nigeria has come to stay, but what is your assessment of the industry in Nigeria today?

We are coming a bit late but the nation is doing so well compared to other nations. In the last 3-4 years the industry has grown by over 90 percent. It is said that there is over 400 Fintech organisations working with Africa Fintech organisation. These are all entrepreneurs and different groups providing solutions.

Are you saying that  Fintech has impacted  hugely on the economy, assist to solve clients’ challenges and provide job opportunities?

Imagine the 400 Fintech firms working with Africa Fintech Organisation and many of them are at infancy.  And each of them has its own niche of providing  solution to a particular sector. This is the new economy. Before now we had an economy that is based on crude oil, manufacturing and others, but the new economy is digital.

Are there examples of countries that employed Fintech to drive their economy?

Fintech  manifests in different forms and that is why speakers at the forum said that they do not see Nigeria being a follower in Fintech market. They see Nigerian being a leader because it is leading its own form of Fintech which is different from countries like S/Africa.  Though South Africa is doing so well in Fintech with its peculiar needs and penetration of banks to customers.

Nigeria is now growing from a combination of these models. But there are some models, where Nigeria is yet to get to which have been done so well in other markets. For instance, Econet which has worked very well in Zimbabwe where the number of people who are insured through the mobile platform are higher than the number of people insured in Nigeria. Under Fintech, people can borrow money like in Kenya without going to the bank because the whole system can read all your transactions as the system knows how money comes in and how it goes out. So when you ask for loan, they know that you are trustworthy and then they can lend you money easily.

Shivani Siroya of Tala (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Shivani Siroya, the CEO and founder of Tala. While Tala is headquartered in southern California its lending operations are focused on the developing world. They launched in Kenya back in 2014 and in three short years they have become the #5 most downloaded app in that country. How they have done this is a fascinating story.

Authors:

George Popescu
Allen Taylor

Friday August 11 2017, Daily News Digest

small business credit risk

News Comments Today’s main news: Earnest has Barclays looking for a buyer. Kabbage raises $250M. KBRA assigns preliminary Kabbage Asset Securitization ratings for Series 2017-1 Additional Notes. Funding Circle revamps website. Today’s main analysis: Small Business Credit Survey. Today’s thought-provoking articles: How good is POS financing? How the People’s Bank of China is changing online payments. Goldman Sachs on China’s […]

small business credit risk

News Comments

United States

United Kingdom

China

European Union

International

Australia

Asia

News Summary

United States

Kabbage Raises $ 250 Million (NewsCenter), Rated: AAA

Fintech company Kabbage completed $250 million in financing from a subsidiary of SoftBank Group.

According to the company, this investment represents the largest equity raise in the online small business lending segment to date and brings Kabbage’s total equity raised to nearly $500 million.

KBRA Assigns Preliminary Ratings to Kabbage Asset Securitization LLC, Series 2017-1 Additional Notes (BusinessWire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of additional Series 2017-1 notes (the “Series 2017-1 Additional Notes”) issued by Kabbage Asset Securitization LLC.

Kabbage Asset Securitization LLC (the “Issuer”) issued $525 million of Series 2017-1 Class A, Class B, Class C and Class D Notes (collectively, the “Series 2017-1 Notes”) on March 20, 2017. The Series 2017-1 Additional Notes include $25 million of additional Series 2017-1 Class A, Class B, Class C, and Class D Notes (together with the Series 2017-1 Notes, the “Notes”). The ratings for the $525 million of original Series 2017-1 Notes will be confirmed in conjunction with the issuance of the Series 2017-1 Additional Notes. The Series 2017-1 Additional Notes will have the same terms as the corresponding classes of Series 2017-1 Notes, including same Note Rate, Advance Rate and Legal Final Payment Date. The proceeds of the sale of the Series 2017-1 Additional Notes will be used to provide extra funding capacity for Kabbage.

Source: BusinessWire
Source: BusinessWire

Affirm – A Leading Point of Sale Finance Provider (Nanalyze), Rated: AAA

Not surprisingly, there is a lot of easy money to be made in loans. If we look at the CB Insights list of unicorns, we see 211 of these mythical creatures grazing in a field of rainbow colored grass. If we break these unicorns into categories, here are the top-3:

  • eCommerce/Marketplace – 16%
  • Internet Software and Services – 13%
  • Fintech – 12%

When we drill into the fintech category, we see that just over half of the companies are based in the USA (13 fintech companies). Of these 13 fintechs, almost half are enabling people to spend money they don’t have:

  • Social Finance – $20 billion in loans funded (vs. just $1.45 billion in savings)
  • Credit Karma – Helps you see how much money you can borrow
  • Greensky – Instant credit decisions
  • Avant – Personal loans using artificial intelligence (AI) for credit scores
  • Prosper – Loan money to your neighbors so they can buy more isht
  • Kabbage – Loan money to small businesses at ridiculous rates

San Francisco startup Affirm has taken in a whopping $420 million in funding so far from high profile investors like Andreessen Horowitz, Khosla Ventures, Morgan Stanley, and Peter Thiel’s Founders Fund.

The ability for Affirm to be right there at the point of purchase is what puts them in front of everyone else who is trying to finance purchases. When you select Affirm, then you’re required to create an account after which your ability to pay is assessed.

This is not a revolving line of credit, but rather each transaction is evaluated on its own merits. The transactions are reported to Experian so that you can build up your credit to buy even more isht. For the privilege of instant credit at the point of purchase, you’ll pay between 10% and 30% APR simple interest.

San Francisco fintech is shopping for a buyer, as it scrambles to raise $ 50 million (Biz Journals), Rated: AAA

San Francisco fintech Earnest has hired Barclays (NYSE: BCS) to help it find a buyer and raise $50 million in equity, a “dual track” process that could see the company sold for around $200 million, The Information reports.

A sale of the online lender at that price would be lower than previous valuations, which have been pegged higher after the company raised $200 million in debt and $100 million in equity.

SMALL BUSINESS CREDIT SURVEY  (New York Fed), Rated: AAA

Startups are of particular interest since they account for 34% of all small employer firms and play an outsized role in U.S. innovation and productivity. Young firms are the drivers of job growth in the United States, accounting for nearly all net new job creation and almost 20% of gross job creation. Yet, even as their importance has become more widely recognized, the rate of startup creation has been decreasing for years. And, of those ventures that launch, failure rates are high. Approximately one-third of new establishments fail within their first two years, and half fail within five years.

While funding is the lifeblood of every company, capital is especially critical for startups. To reach scale, startups need to be able to secure expansion capital. The Report on Startup Firms offers detailed intelligence on startups’ financing needs and challenges, asking questions about capital requests, borrowing qualifications, applications and success levels.

This report addresses several important borrower-centric questions:

  • How strong is demand for financing among startups?
  • Are startup firms seeking financing and credit from traditional lenders, or are younger firms attracted to new capital sources?
  • How successful are new firms in obtaining financing, and how do they rate their experiences with lenders?
Source: Small Business Credit Survey

Read the full must-read report here.

PayPal Acquires Swift Financial, Expands Loan Capabilities (The Street), Rated: A

PayPal Holdings Inc. ( PYPL) has acquired online lending firm Swift Financial in an effort to expand the online payments company’s business that offers working capital to merchants, Reuters reports.

PayPal will now be able to offer term loans of up to $500,000 to its larger merchants while taking advantage of Swift’s data and capabilities.

Is regulation really keeping banks from lending? (American Banker), Rated: A

Policymakers pushing to scale back regulation have relied heavily on a core argument — bank lending is being held back by post-crisis capital rules and other restrictions.

Federal Reserve Board Chair Janet Yellen has repeatedly said that banks’ lending activities have not been appreciably affected by new rules. In a hearing last month, she pointed to a survey of members by the National Federation of Independent Business which suggested that only a small fraction of small businesses are unable to get the credit they desire.

But loan demand is a difficult thing to measure, in part because it’s hard to count loans that aren’t made. By some metrics, lending demand is down.

But the industry says there is a worrisome trend that those aggregate numbers fail to address, and that is the heightened challenges that banks — particularly larger institutions — face in lending money to borrowers with less than perfect credit scores.

Bill Nelson, chief economist and head of research at The Clearing House Association, said that the new capital and liquidity rules — and especially the Fed’s stress testing program — have made it especially hard for the largest banks to make loans that run a risk of default under economic stress.

Competition rewards student loan borrowers who do their homework (Credible), Rated: A

An analysis of rate requests submitted by students and their families through the Credible marketplace found that when borrowers prequalified with more than one lender:

  • The average difference between the high and low interest rate on 10-year, fixed-rate loans was 1.7 percentage points.
  • Borrowers choosing the loan with the lower interest rate could expect median savings of $2,769.
  • In addition, private student loans funded through the Credible marketplace so far this year carry rates that can be competitive with federal PLUS loans.

When students and families request rates through the Credible marketplace and prequalify with more than one lender, the difference between their high rate and low rate averages 1.1 to 1.7 percentage points, depending on the loan term and type.

 

Vanguard posts unrivaled digital platform AUM (FinancialPlanning), Rated: A

The firm’s hybrid advice offering, Personal Advisor Services, is now at $83 billion in assets under management, according to the firm, putting it in position to be the first digital platform to cross $100 billion.

Since the first quarter of the year, the platform’s assets have experienced a 66% growth increase.

Even during its pilot phase with no paid advertising support, assets for Personal Adviser Services rose from $755 million in 2013 to $10.1 billion at the time of its launch in 2015.

FastPay and Tennenbaum Structure an Innovative $ 80MM Credit Facility for Videology (Newswire), Rated: A

FastPay, a prominent financial technology company that provides lending and payment solutions to digital businesses, along with Tennenbaum Capital Partners, LLC today announced the close of an $80 million international credit facility for Videology. Videology is a leading, global converged TV and video software provider with offices across the United States, Europe, Canada, Asia and Australia.

REAL ESTATE TOPS THE WILLIS ALTERNATIVE INVESTMENT LEAGUE TABLE (All About Alpha), Rated: A

The gist of its new report is that the alternatives asset industry has grown to nearly $6.5 trillion in assets under management.  The world’s largest 100 alternative asset managers make up more than 61% of the pie, with $4 trillion, which represents an increase of 10% in the latter AUM number over the course of 2016.

The survey divided those 100 managers into seven classes, and found that of the ten, the largest share of assets is that held by real estate managers. The full breakdown among the seven classes is as follows:

  1. Real estate – 35% of the whole, over $1.4 trillion;
  2. Private equity fund managers – 18%, and $695 billion;
  3. Hedge funds – 17%, and $675 billion;
  4. PE funds of funds – 12%, and $492 billion;
  5. Illiquid credit – 9% and $228 billion;
  6. Infrastructure – 4% and $161 billion;
  7. Commodities – 1% and $40 billion.

Criticism Heats up on Real Estate Crowdfunding Platform iFunding (Crowdfund Insider), Rated: A

iFunding, a real estate crowdfunding platform, is getting hammered on Bigger Pockets – a real estate investment forum. iFunding has had a choppy operational history at best. The platform has been peppered with high profile partnerships and then departures. Two unrelated lawsuits, in which the platform allegedly prevailed, certainly did not help. iFunding has not been originating any new deals since 2016 – as far as we know. Now there are allegations of deals gone back and the possibility of insolvency.

Largest FinTech Co. in World Accelerates, Invests in Chapel Hill’s WalletFi (Exitevent), Rated: A

Little Rock, Ark., home to the VC FinTech Accelerator, wasn’t quite as sexy a locale, but the 12-week program was sponsored by FIS, the largest FinTech company in the world. It offered funding as well as access to 30 executives from a variety of major banks and FinTech companies who’d signed on as mentors and advisors.

The decision has been a good one. WalletFi has signed on its first customer and two high profile advisors including the CEO of a publicly-traded bank.

Crop Pro Raises $ 8M in Series A (Coverager), Rated: A

Des Moines-based Crop Pro announced it has raised $8 million in a Series A round led by agriculture investors Finistere Ventures and Seed 2 Growth Ventures (S2G), with participation from specialty insurer GuideOne Insurance . Crop Pro will use the investment to expand its team and speed the development of products and services that bridge the gap between agricultural and financial technologies.

3 Possible Application of Machine Learning in finance (TechBullion), Rated: A

It is becoming extremely hard to correctly determine the eligibility of a loan borrower. Even after careful evaluation of all available parameters, some successful companies and individuals still default their bank loan.

Loan eligibility evaluation tasks will be taken over by the smart machine learning technology. To determine the credit score of a client, machine learning can apply regression algorithms which are accurate.

As the financial world transition to digital currencies and digital transactions, there is going to be no physical theft because the money is virtually held. For this reason, thieves are starting to change tact and are now switching to digital means of stealing money.

When put in place, machine learning begins by gathering and segmenting data into at least three segments to create models which eventually amounts to datasets. These datasets can be obtained from historical information. The machine learning models and datasets can then be used to predict the possibility of fraud occurring in financial transactions.

7 Reasons Why Investing in Real Estate Online is Efficient & Effective (Crowdfund Insider), Rated: A

Forbes reported earlier this year that real estate crowdfunding was a $3.5 billion industry in 2016, up from $1 billion in 2014.

  1. Real Estate Investing Is No Longer (as) Local. With online tools and search algorithms, you can put searching for properties ‘on automatic’ and find properties that match your criteria – locally, nationally or even anywhere in the world. 
  2. Transparency. Many online platforms, in addition to doing most of the due diligence before presenting their investment opportunities, have built-in tools that allow investors to analyze risk, assess property valuations, calculate internal rates of return and loan-to-value calculations, and do market research. 
  3. Availability of Information. This availability of information has spurred some investors to create their own investment groups where they pool (i.e. crowdsource) their collective knowledge to evaluate the investments presented, and often will use other resources and means to further evaluate an investment opportunity.
  4. Document Delivery Is More Efficient.
  5. Convenience. Investors in this century no longer have to drive to view properties because images and virtual tours online make it unnecessary. Technology has taken real estate from the ground to the cloud.
  6. Lower Barriers to Entry. Many real estate investing platforms facilitate investments for  $1,000, $5,000 or $10,000. Through online real estate platforms, investing can be done with just a few hundred dollars per month, as many investments are simply equity trades where investors are buying a stake in a project or stakes in multiple projects within a single portfolio. Even debt-based instruments can be entered into with a small fraction of the investment needed 10 or 20 years ago. A few up-and-coming real estate platforms allow non-accredited investors ways to invest for as low as $100 per month.
  7. Greater Diversification. With today’s online options, an investor can diversify into fix-and-flip projects, rental properties, and debt or equity across residential, multifamily and commercial more easily than even 5 years ago.

Want to Be a Real Estate Millionaire? Here’s How to Invest with a Single Click (Inc.), Rated: B

Fortunately for investors of all types, real estate became the perfect asset class for crowdfunding: stable, tangible, and relatively predictable in its growth and eventual returns.

If you’re looking to get started in real estate in a few hours or less, here are a few tips to get you started:

  1. Understand how crowdfunding portals work. There are two classes of investors: accredited and non-accredited.
  2. Ascertain what kind of investor you are. There are two classes of investors: accredited and non-accredited.
  3. Carefully weigh any investment, with the help of an expert. There are two classes of investors: accredited and non-accredited.

Five Hot Atlanta Startups (NewsCenter), Rated: B

Kabbage processes data generated through ordinary business activity, such as accounting data, online sales, shipping and dozens of other sources, to understand performance and deliver fast, flexible funding in real time. Kabbage has raised nearly $500 million in funding, with a whopping $250 million Series F that closed just a few days ago. According to the company, Kabbage has provided in excess of $3 billion in loans to more than 100,000 small businesses across all 50 U.S. states.

According to the company, more than 13,000 customers around the world use PrimeRevenue to optimize their financial supply chain. PrimeRevenue has raised more than $115 million in funding from Battery Ventures, Brown Brothers Harriman, and RRE Ventures.

United Kingdom

Funding Circle Revamp: Online Lender Announces New Look & Feel to Platform (Crowdfund Insider), Rated: AAA

On Thursday, online lender Funding Circle announced it is revamping its platform by offering a new look and feel. The lending portal also announced its new motto, Made to Do More.

Investors Spend £7bn on Alternative Income Trusts (Morningstar), Rated: A

Over the past 12 months to August 2017 investment trusts have raised £9.6 billion from investors in these two ways – known as issuance. Of this, 74% has been within what could broadly be termed alternative income; those assets not directly comparable to equities or conventional bonds and which distribute a structured yield to shareholders.

Issuance in what could be termed conventional income, such as multi-asset or UK and global equity income trusts, totalled £668 million. Finsbury Growth & Income (FGT) led the way with £112 million of issuance. Conventional issuance amounted for around £950 million which was dominated by activity in the secondary market from Scottish Mortgage (SMT) £299 million. Alternative income accounted for the remaining £7.2 billion.

Morrow: stop pandering to banks on robo-advice (Citywire), Rated: A

The regulator should stop pandering towards banks when it develops rules for robo-advice, evestor chief executive Anthony Morrow has argued.

‘If [evestor co-founder] Duncan Cameron and I can build a business to provide financial advice to customers then banks should be able to.

‘The only reason is absolute greed. There is probably an argument to say if, and it is a massive if, interest rates went up three or four percent, would the banks even be bothered because at that sort of rate they would probably still be getting a 2% margin on current accounts which is more than they would make on these new robo-advice things, and with absolutely no risk there,’ he said.

FCA: Advice market reform is ‘on track’ (Money Marketing), Rated: B

In particular, it cited fee transparency and the removal of commissions as steps forward, and that the results of its recent suitability review, which showed that 93 per cent of advice cases were suitable, demonstrated positive results.

The FCA writes: “A market where advisers aren’t driven by commission and are better qualified will provide a better quality of advice for consumers.”

China

This PBoC circular is set to radically change online payments in China (The Asset), Rated: AAA

The new document requires all third-party platforms, such as WeChat Pay, Alipay and others, to connect with Wang’lian (网联), an independent clearing house jointly established by PBoC, other Chinese regulatory bodies and some payments companies.

The new model adopts a centralized clearing procedure where Wang’lian will act as the sole intermediary clearing entity to handle all transactions between payments companies and banks.

According to Chinese media, the document from PBoC requires that banks and payments companies be ready with the internal infrastructure changes required for the new model by October 15. From June 30 2018, all payments and transfers will be processed by Wang’lian.

Data from online transactions, for instance transactions through WeChat’s red packet function, will be monitored by PBoC.

Goldman Sachs: 2017 China ‘s financial technology rise (199IT), Rated: AAA

Click the image to read the report.

The latest monthly report of P2P industry in Chinese first-tier cities: Beijing overtook Shanghai (Xing Ping She), Rated: A

Recently, a third-party institution has launched the Monthly Report of P2P Lending Industry of Chinese First-tier Cities. According to the report, the total number of P2P lending platforms in Chinese first-tier Cities has reached to 1,100 by the end of July, among which 403 platforms are in Beijing, 279 in Shanghai, and 418 in Guangdong Province.

Meanwhile, the total Volume of P2P lending industry in the three areas has reached to $27.37bn, increased by $592m from the last month. The volume of Guangdong Province ranked No.1, which amounts to $9.53bn, with growth rate of 2.01 percent from the last month. The following was Beijing, where the volume amounted to $9.19bn, with the month-on-month growth of 6.69%. And Shanghai reached the p2p industry volume of $8.65bn, which was down 1.95% from the previous month.

China Rapid Finance Limited Sponsored ADR (XRF) to Release Quarterly Earnings on Thursday (Week Herald), Rated: A

China Rapid Finance Limited Sponsored ADR (NYSE:XRF) is scheduled to announce its earnings results before the market opens on Thursday, August 17th. Analysts expect the company to announce earnings of ($0.17) per share for the quarter.

China Rapid Finance Limited Sponsored ADR (NYSE:XRF) last posted its quarterly earnings data on Thursday, May 25th. The company reported ($1.01) earnings per share for the quarter.

European Union

Robo.Cash Update: Investments Jump 30% in July (Crowdfund Insider), Rated: AAA

Robo.Cash, an automated peer to peer lending platform with a buyback guarantee, reports that July was a solid month for the online lender as investments jumped 30%. In the first half of the year, Robo.Cash says that over 700 investors have signed up and 85,720 loans have been originated. In July, 187 investors joined the platform.

Source: Crowdfund Insider

One in five German companies faces charge on bank deposit (New York Daily News), Rated: A

Nearly one in five German companies has faced being charged for parking cash at its bank as a result of the European Central Bank’s negative rate policy, the Ifo economic institute said on Wednesday.

Only 8 percent of all companies eventually accept the charge, with most others escaping it through negotiations or by switching banks, Ifo’s survey of 4,000 companies showed.

International

How Financial Institutions and Fintechs Are Partnering for Inclusion (Center for Financial Inclusion), Rated: AAA

Major Findings

  • The best partnerships between financial institutions and fintechs are a win-win for both partners, as well as for financial inclusion. Mainstream financial institutions partner with fintechs to improve product offerings, increase efficiency, and lower costs – goals with special relevance to low-income customers. By partnering with mainstream financial institutions, fintechs get to scale their technology and can access capital to grow. As a result of these partnerships, low-income customers who are left out of – or poorly served by – the financial sector have greater access to higher quality, more convenient, and less expensive financial products and services.
  • To facilitate productive fintech partnerships, mainstream financial institutions are organizing internally for innovation, strategically integrating systems and staff, and developing contractual agreements to ensure stability and success. Fintech partnerships enable legacy institutions to engage with and learn from new technology in low-risk, low-cost ways. They are also key to allowing incumbents to compete in a world where alternative players, like Facebook and Amazon, are threatening the central role of financial institutions in the lives of customers. By offering better, less expensive, and more innovative products, financial institutions can assert their continued relevance as customer-facing institution.
  • One encouraging and somewhat unexpected finding is that the partnerships between financial institutions and fintechs represent a slow but pervasive financial industry shift toward customer-centricity. Better data management and use, new digital banking products, and greater customer engagement all enable better service for underserved customer segments.

Read the full report.

Crypto vs VISA – Can Denarius Compete When it Comes to Transactions Per Second? (The Merkle), Rated: A

VISA handles on average around 2,000 transactions per second (tps) and peaks around 4,000 tps during high shopping periods. This is just a fraction of their capacity, which is said to be around 56,000 transactions per second.

Paypal, in contrast, handled around 10 millions transactions per day or 115 transactions per second according to data from late 2014.

Today, the Bitcoin network is restricted to a sustain rate of around 7 transactions per second or a little over 600,000 transactions per day.

REAL Launches ICO to Disrupt Global Real Estate Investment Markets (Cryptocoins News), Rated: A

REAL will disrupt global real estate investing by moving it on to the Ethereum blockchain and enabling the average investor to build a real estate portfolio.

Property owners and developers will apply to have their assets tokenized and listed on the REAL crowdfunding website. The REAL team – which is composed of successful entrepreneurs, venture capitalists, and developers who have already invested $350,000 of their own funds in the project – will carefully analyze the properties to select the ones that will provide investors with the greatest long-term value, with targeted annual returns of 12-20%.

The REAL token sale will begin on August 31, but investors contributing greater than 100 ETH will have the opportunity to participate in a 24-hour pre-sale on August 24. During the ICO, investors will be able to acquire tokens at the rate of 220 REAL per 1 ETH until the investment cap has been reached.

Australia

DirectMoney closes funding deal (LendIt), Rated: AAA

The Board of DirectMoney Limited (ASX: DM1), (“DirectMoney”, or the “Company”) are delighted to announce the completion of a wholesale funding agreement with 255 Finance.

The agreement is structured around the purchase of $50 million in DirectMoney originated loan assets, with the intent to increase this in the future. 255 Finance will also receive equity in DirectMoney and options that vest based upon specific hurdles being met. Significant growth in both lending volumes and the operational performance of DirectMoney is anticipated as a result of the facility.

Asia

What’s slowing the adoption of straight through processing for payments? (The Asset), Rated: A

One technical difficulty is the need for compatible payments systems across different entities. The ISO 20022 XML format is a standardized and popular format for payments among financial institutions. However, payments under the XML standard still need to be reformatted if the transaction goes through the United States’ Automated Clearing House network.

Regulatory requirements, which can include know-your-client checks and anti-money laundering, as well as risk and control, can mandate that a part of the process is completed manually.

Authors:

George Popescu
Allen Taylor