Tuesday January 10 2017, Daily News Digest

Global VC FinTech investment

News Comments Today’s main news: Wellesley aims to raise 1.5M BP on Seedrs. China cracks down on P2P lending. Today’s main analysis: It doesn’t take much to put nonprime Americans into financial crisis. Today’s thought-provoking articles: Why France will steal the UK FinTech crown. Indonesia releases new P2P regulations. United States What it will take to put […]

Global VC FinTech investment

News Comments

United States

United Kingdom

European Union




News Summary

United States


Unexpected expenses are more likely to hit nonprime Americans much sooner and harder than their counterparts with prime credit scores, according to research released today by Elevate’s Center for the New Middle Class. For example, the research shows that the 160 million Americans who are nonprime, can only weather an unexpected expense of 31 percent of their monthly income, as opposed to 53 percent for their prime counterparts.

The Center’s latest study explores the impact of unexpected expenses on nonprime Americans, defined as those who have credit scores below 700. Key findings include:

  • A bill becomes a crisis for nonprime Americans at $1,400; for prime, it’s $2,900
  • Many common expenses such as a vehicle transmission, broken arm, or apartment security deposit are above the $1,400 threshold for nonprime Americans, but below the $2,900 threshold for prime Americans
  • Almost half of nonprime Americans have more than three disrupting expense events per year compared to approximately one-quarter of primes
  • Nonprime Americans can survive only half as long as prime Americans after a drop in income
  • Half of nonprime Americans have an income that fluctuates month-to-month

Additionally, based on geographic location, purchasing power can create large disparities in threshold amounts. For example, local purchasing power adjusted for $100 in Tulsa, OK, acts more like $131 in Kansas City, MO, and a mere $77 in New York, NY.

What to Watch For in Marketplace Lending During 2017 (Crowdfund Insider), Rated: A

While surprises are undoubtedly in store for 2017, indications are that certain trends—the growth of bank partnerships and industry consolidation—will continue and accelerate as some legal certainty is achieved, legal cases which absorbed the industry’s attention in 2016 will be resolved and the focus will shift to Capitol Hill, as marketplace lenders step up lobbying activities given the new administration’s presumed predilection to assist the expansion of credit.

Taking a Look Back at 2016

From the start of the year through mid-May we witnessed what can be described as “rational exuberance” as market participants continued to look optimistically at opportunities, tempered by a recognition that regulatory scrutiny was increasing and demanded careful attention.

The mid-May developments at Lending Club, with the abrupt resignation of its CEO Renaud Laplanche, one of the most prominent figures in the industry who had just a few weeks before regaled the LendIt crowd with a keynote address, marked the start of the second distinct period.

With the end of the summer, the market entered its third phase, as parties again waded back into the water, cautiously optimistic about the outlook. By the end of the year, things had come nearly full-circle, as Lending Club tapped investor demand and completed its first rated securitization of consumer loans.

What’s Ahead for 2017

Increased Bank Partnerships. One theme likely to continue in 2017 is the increasing focus on partnerships between lending platforms and traditional banks.

While the Office of the Comptroller of the Currency’s December announcement to move forward with limited purpose national bank charters for fintech companies represents a measured and beneficial step for the industry, it is relatively unlikely that any final developments occur before the end of 2017.

Further Industry Consolidation. Expect the industry consolidation that started in 2016 to continue and grow in 2017.

Lastly, expect M&A activity in the marketplace arena to accelerate in 2017.

Morningstar Corporate Credit Research Highlights (Morningstar Email), Rated: A

Money360 Closes Record $ 35.6 Million in Loans in December (Yahoo! Finance), Rated: A

Money360, the leading commercial real estate marketplace lending platform, announced today that it closed a record $35.6 million in commercial real estate loans in December 2016 — the result of ongoing growth of the company.

December’s transactions reflect short-term bridge loans for a mix of property types, including retail, office and industrial in California, Florida and Illinois. A total of five properties were financed including a one-story suburban office building in Irvine, California; a three-building industrial complex in Richmond, California; a seven-building anchored retail property in Orlando, Florida; a three-story suburban office building in Palm Harbor, Florida; and a three-story office property in Rosemont, Illinois.

December’s loans were for terms of between one and two years, and all were collateralized with a first-lien positions on the properties. They include:

  • Irvine, California: $5.4 Million to Refinance an Office Property Currently Being Re-entitled for Multifamily Development: Money360 provided a 12-month, $5.4 million bridge loan to the owner of a one-story, suburban office building to pay off two maturing loans, taxes and to provide cash out to afford the borrower sufficient time to continue processing land entitlements for a 45-unit condominium project planned on the site. The borrower brought in equity of $548,000 to close with a loan-to-value of 75 percent.
  • Richmond, California: $5.7 Million to Purchase a Three-Building Industrial Complex: Money360 provided a $5.7 million 24-month bridge loan to allow the borrower to purchase Adel Park, consisting of three contiguous industrial buildings containing a total of 159,156 square feet. The borrower was processing an SBA loan, but due to a hard closing date, opted for the bridge loan to consummate the purchase.
  • Orlando, Florida: $9.53 Million to Refinance a Seven-Building Anchored Retail Property: Money360 provided $9.53 million in bridge financing to pay off two current maturing loans and to finance tenant improvements and leasing commissions associated with re-tenanting the anchor space. The first-lien mortgage loan has a term of 24 months, with a loan-to-value ratio of 73.9 percent.
  • Palm Harbor, Florida: $2.5 Million to Refinance a Three-Story Office Building: Money360 provided a $2.5 million bridge loan to pay off a maturing CMBS loan for the three-story Palm Harbor office building in Palm Harbor, Florida. The first mortgage loan is for a term of 24 months with a loan-to-value ratio of 71.43 percent. The subject property is 84.6 percent occupied and professionally managed.
  • Rosemont, Illinois: $12.5 Million to Refinance a Suburban Office Property: Money360 provided a $12.5 million bridge loan for a single-tenant, suburban property in Rosemont, Illinois, allowing the borrower to pay off a maturing loan and buy out existing partners. The 24-month loan is secured by 71,132 square foot property, broken down as 60,207 square feet of office space and 10,925 square feet of warehouse space.
United Kingdom

Wellesley Aims to Raise £1.5M on Seedrs for Further Expansion (Crowdfund Insider), Rated: AAA

Peer to peer lending platform Wellesley has been crowdfunding on Seedrs for almost a month to raise £1.5M (approximately $1.82M). The campaign is currently restricted to Wellesley customers so it is hard to track.

Wellesley, like many other young firms, needs additional capital to continue operations.

Wellesley told P2P Banking that the platform’s campaign on Seedrs stands out because over 15,000 people have already invested in the company, the firm has a social issue of building Britain, and the company has been running for three years while remaining less speculative than other startups in this space.

Advisor Focused P2P Platform Octopus Choice Receives FCA Approval (Crowdfund Insider), Rated: A

Peer to peer lending platform Octopus Choice has received full authorisation from the Financial Conduct Authority. Octopus Choice is part of Octopus Investments. The company said the FCA approval was a first for an advisor focused P2P platform.

Octopus Choice was launched in April 2016, to coincide with the FCA’s decision to broaden the scope of advisers’ permissions to include P2P lending.  The company now claims to be one of the fastest growing P2P platforms having facilitated approximately £45 million in loans for 75 deals since launch.

James Hay bans non-standard investment purchases through platform (Money Marketing), Rated: A

From today, new customers will no longer be able to buy non-standard investments through James Hay’s platform except for in SSASs.

James Hay lists the following investments as non-standard: intellectual property, land banking, overseas commercial property, peer-to-peer lending, unconnected loans, carbon credits, storage pods, UK unquoted shares, overseas unquoted shares, unquoted loan notes and bonds, second-hand endowment policies, and fractional property investments.

Gold bullion will no longer be treated as a non-standard investment in James Hay products, however, and will still be allowed for new investments.

InvestCloud acquires UK fintech Babel for $ 20M (EconoTimes), Rated: A

Californian fintech firm InvestCloud has announced a strategic acquisition of London fintech company Babel Systems for $20 million in a deal.

The strategic acquisition connects InvestCloud’s digital platform with Babel’s trading and accounting capabilities in a move to provide a unique solution for fintech companies. InvestCloud will carry on supporting clients using other accounting solutions and also serve as an open supplier to the market, the release stated.

The client base of Babel includes the market leader in Robo-Advice ‘Nutmeg’ and other progressive Wealth Managers and Family Offices. The fintech company is the modern trade and accounting firm that addresses the needs of a regulated and international marketplace. The modular Babel’s solution is API based and enables the company to be integrated with any client platform.

Getting to know you: Tarlochan Garcha (Business Matters Magazine), Rated: A

Kuflink Ltd is our entry into the peer-to-peer world.  This business is about to go live and compliments Kuflink Bridging, as it will be facilitating lenders and borrowers on UK property.

The conclusion of those findings was clear and this complemented Kuflink Bridging.  Whilst the peer-to-peer sector is highly regulated, the barriers to entry are very high and this appeals to us given our knowledge of the industry, niche offering and desire to build a successful business.  Just nine months later, we are ready to launch our unique peer-to-peer lending platform.

Survival guide to personal loans (Independent), Rated: B

When we asked Moneysupermarket.com what the best buy deals were on personal loans from £1,000 – £1,999, £2,000 – £2,999, and £3,000 – £4,999 – enough for a modest car purchase or an affordable kitchen, the cheapest deal each time was from Zopa, the original peer-to-peer lender.

The advent of peer-to-peer lending has revolutionised the loan market by cutting out middle men and matching up savers looking for a better than average deal with would-be borrows hoping the beat the high street loan rates. When peer-to-peer (also known as P2P) started out it wasn’t regulated in the way as the banks and customers were initially nervous about both lending and borrowing. That’s all changed, with Uk registered P2P lenders falling under the same policing as traditional banks by the Financial Conduct Authority (FCA). From April 2017 they’ll also have to have at least a £50,000 cash buffer to bail out their customers if one side of the deal fails for some reason.

AlliedCrowds: Here’s 2016 Recap & 2017 Priorities (Crowdfund Insider), Rated: B

AlliedCrowds’ 2016 highlights include:

  • Building its database, the Capital Finder: Offers information for crowdfunding, VCs, angel networks, impact investors, and public/semi-public firms.
  • Consulting Service Expansion: AlliedCrowd invested more time in running a number of consulting projects for developing organizations and private sector firm.

  • Created Ecuador’s First Crowdfunding Platform: Known as GreenCrowds.

AlliedCrowds’ 2017 priorities will be to finalize Capital Finder, publish a new alternative report, and appoint a new MD for its debt platform.

European Union

Here’s why France might steal the UK’s fintech crown (Business Insider), Rated: A

The UK’s fintech sector overwhelmingly supported remaining in the EU in the runup to June’s referendum.

Now, as Brexit looms

€2 billion has been invested over German fintech platform Raisin (Business Insider), Rated: A

German fintech Raisin has passed €2 billion (£1.7 billion, $2.1 billion) of investment over its platform three years after launching.

Raisin announced in a press release on Tuesday that it had passed the milestone, just three months after announcing €1.7 billion had been invested over its platform. The fintech said the money comes from 60,00 customers, up from 50,000 in September.

Entrepreneur behind a $ 180M watch brand quietly invested in Klarna (Business Insider), Rated: A

Filip Tysander, the founder of the Daniel Wellington watch brand, quietly bought millions of pounds worth of shares in payments startup Klarna, according to Swedish tech site Breakit.

Klarna has raised over $290 million (£238 million) and is worth $2.25 billion (£1.85 billion), making it one of Sweden’s few billion dollar tech companies.


China Cracking Down On P2P Lending (PYMNTS.com), Rated: AAA

The first nationwide crackdown on P2P lending in China is underway — and expected to eliminate many of the 2,400 or so leading platforms in the nation.

The crackdown comes following a series of multi-billion dollar scams in the Chinese P2P lending space, as well as governance issues in U.S. segment leader LendingClub.  Chinese regulatory authorities have officially released new guidelines and sent inspection teams to companies to make sure said guidelines are being following. Those that do not comply by August of this year will be shut down.

The new regulations will block lenders from guaranteeing principal or interest on loans they facilitate as well as cap the size of loans for individuals at Rmb1m and at Rmb5m for companies. Lenders going forward will also be required to use custodian banks — which the vast, vast majority do not.

CreditEase Boosts Customer Experiences with Verint Customer Engagement Optimization Solutions (BusinessWire), Rated: A

Verint® Systems Inc. (Nasdaq: VRNT) today announced that CreditEase—a leading FinTech company in China, specializing in small business and consumer lending as well as wealth management for high net worth and mass affluent investors—is leveraging Verint Speech Analytics, along with Call Recording and Quality Management, to support the transformation of its customer engagement platform.

Since implementing the Verint software solutions, CreditEase has experienced improvements in operational performance and reports an increase in the use of digital channels through omnichannel service strategies. The ability to assess larger data samples, focus on important interactions, gain customer intelligence and target coaching to employees also has helped the organization enhance service delivery and the customer experience.

CreditEase also reports that it has saved operating costs of 45 percent on an annual basis by reducing print and mailed financial statements as customers have migrated to the use of digital channels and self-service e-statements. Its quality assurance initiatives also have yielded benefits in terms of generating an additional 30 percent savings by helping personnel become even more effective in their roles. The organization’s customer satisfaction ratings also have increased, in part due to a sharp reduction (by 80 percent) in billing-related complaints.


FSA Support Service Fintech Peer to Peer Lending (Tempo.co), Rated: AAA

the Financial Services Authority (FSA) shows its commitment to support the development of technology-based financial services orfinancial technology (fintech) in Indonesia.

Deputy Commissioner Strategy Management IA FSA, Imansyah said that regulation provides an opportunity for offenders fintech in Indonesia in order to grow.

Faith added the FSA will set up a special website page to facilitate it. The process of setting up a website to ready access would require at least six months after the regulation is published.

InstaEMI expands to more metro cities (India Times), Rated: B

Hyderabad-based financial services platform InstaEMI today announced its plans to expand its presence in metro cities across the country including New Delhi, Mumbai, Pune and Kolkata.

While peer-to-peer lending is another area of their focus, marginal size of the business constitutes of big ticket investments.


Indonesia: New Fintech, P2P Regulations Released (Crowdfund Insider), Rated: AAA

According to a report in Deal Street Asia, the Indonesian Financial Services Authority (OJK) laid out the following rules:

  • Registration – P2P lending (pinjam meminjam) startups must register and obtain their business license before operating.
  • Foreign ownership – Foreign businesses have to find a local partner because foreign ownership is limited to 85 percent of a company, and they can only act as lenders.
  • Minimum capital requirements – A company must have access to a little over $260,000 in order to carry out its business.  It must have at least approximately $74,000 in capital by the time it registers, and it must also have at least approximately $188,000 to obtain its operating license.
  • Interest rate provision – There is no limit on the interest rate, but loans cannot exceed $150,000.
  • Consumer protection – Fintech firms must only “advise” lenders and borrowers of its selected interest rates, which take “into account fairness and developments in the economy”.  They must also use escrow and virtual accounts in order to prevent operators from directly accessing the capital flowing between the lenders and borrowers.

CoAssets Launches New Real Estate Subsidiary for Full Spectrum of Real Estate Services (Crowdfund Insider), Rated: A

CoAssets Limited, a Singapore-founded Fintech firm that is listed on the ASX (ASX:CA8), has launched a newly incorporated subsidiary, CoAssets Real Estate (Care) Pte Ltd.

“As a crowdfunding platform, user protection is one of our key focus. We are now looking at crowdfunding deals that are backed by assets as a way to protect our users amidst economic uncertainty. Given this move towards secured crowdfunding and our market position as a real estate crowdfunding platform, having a real estate agency fits in well into our overall business strategy,” said Getty Goh, CEO of CoAssets.

CoAssets also shared that all deal listed on the crowdfunding platform undergo a proprietary risk assesment model labeled CoAssets Risk Assessment Model or CRAM.  This process was said to be developed with the assistance of one of the top auditing firms.  The CRAM score is used to help decide whether crowdfunding or other forms of financing could be offered to companies that are looking for funding.

RE/MAX Malaysia Crowdfunding Campaign Raises Over MYR 300,000 (Crowdfund Insider), Rated: A

Kellerhhof International Sdn Bhd led RE/MAX Malaysia‘s equity crowdfunding campaign over the past month to aim to raise MYR 200,000 (approximately $45,000).  The campaign on CrowdPlus.asia finished yesterday and resulted in RE/MAX Malaysia successfully surpassing its minimum goal, raising MYR 322,888 (approximately $72,000).

Yesterday our Equity Crowdfunding was closed. An amazing 161% funded, what gives us great appreciation.



George Popescu
Allen Taylor

Friday September 30st 2016, Daily News Digest

Friday September 30st 2016, Daily News Digest

News Comments Today’s main news: Prosper shutting down secondary market; 3 major banks on their knees; JP Morgan deal with Invest Cloud. Today’s main analysis: Lending Club’s email to their clients. Today’s main thought provokers: How Monzo got 40,000 clients. United States A very interesting email from Lending Club, very smartly written in Patrick’s name and […]

Friday September 30st 2016, Daily News Digest

News Comments

  • Today’s main news: Prosper shutting down secondary market; 3 major banks on their knees; JP Morgan deal with Invest Cloud.
  • Today’s main analysis: Lending Club’s email to their clients.
  • Today’s main thought provokers: How Monzo got 40,000 clients.

United States

  • A very interesting email from Lending Club, very smartly written in Patrick’s name and from his point of view. Who’s Patrick ? I commented in line extensively paragraph by paragraph (as today was a slow news day and I had more time).
  • 3 banks are on their knees: Wells Frago, Deutsche Bank, and Commerzbank. Two of them are the major banks in Germany.  This news is critical for a few reasons. First, it will affect interbank interest rates, which will propagate into all interest rates. Second, if banks who are top lenders like Wells Fargo have to cut cost they will also cut business lines. Which is a great door open for our industry? And last, if this gets worse, it may, in fact, be the beginning of a next Greece-like crisis , except affecting major economies.
  • Prosper is discontinuing their secondary market because nobody is using it. I have a lot of thoughts on this and I wish they had reached out to talk about it 1st. I am a frequent user of both Prosper’s Secondary Market and Lending Club’s Secondary market. I wonder if anybody at Prosper is using both ? Here is my takeaway: if I want to sell something at Lending Club the process is simple, clear and I always manage to sell them. I tested and I can sell notes in seconds if I discount 20% the price. On Prosper I tried numerous times and I never managed to sell a single note. Why ? Both platforms are powered by the same legal setup with Folio Investing. So the problem is the process of listing, the pricing and the liquidity. I strongly believe a secondary market is MUST HAVE for these platforms. I deplore that they are closing it down. Please, please let me help launch it right so that you can keep it open.
  • JP Morgan signs deal with InvestCloud (not that long after the deal with OnDeck). Dimon committed to spending $300 million over the next three years on digital improvements in asset management.
  • Single-Family rentals vacancies inch up a little. I think it is still noise, no new signal.
  • How Monzo got 40,000 new clients with hardly any marketing spend? A very interesting process.

Other countries

  • Today I didn’t find any relevant news from other countries, regrettably. I am surprised as well. Please feel free to point us to news worth covering. Our readers in aggregate are by far my best source of news.


United States

 Update on where Lending Club stands, what we’re working on, where we’re headed, (Email Lending Club), Rated: AAA

Comment: this is an email sent from Lending Club to all clients. It was written in the name of their newly hired Chief Capital Officer, Patrick Dunne.

Dear George,

I wanted to take a moment to introduce myself. I’m Patrick, Chief Capital Officer at Lending Club. I joined the Lending Club team a few months ago. My job is ensuring that all of our investors have a great investment experience at Lending Club. I wanted to provide an update on where Lending Club stands today, what we’re working on, and where we’re headed.”

Comment: I like the direct personal tone and the feeling of approachability by introducing himself as Patrick instead of, the other extreme, which would be Mr. Dunne. As a retail client I relate to this tone well.

Email continues :

“Where we stand today. We’re proud that we have the largest retail investor base of any company in the marketplace lending industry and are committed to expanding our offering so more retail investors can access Lending Club products. Over the past several months, we have focused on strengthening our business processes and steps were taken to enhance asset quality by increasing interest rates and tightening credit criteria for loans. We added some tremendous talent including Sameer Gulati (Chief Operating Officer), Tom Casey (Chief Financial Officer), Russ Elmer (General Counsel), Valerie Kay (Head of Institutional Investors), and Raman Suri (Head of Retail Investors). We also welcomed Tim Mayopoulos (President and CEO of Fannie Mae) to the Lending Club Board of Directors.”

Comment: Outstanding job at building such a team in so short. The only concern would be if the stage Lending Club’s is in matches this new “very large company” team’s experience. This team didn’t build those companies. However Lending Club is not a startup anymore. And it often takes a complete new type of team to take a company from 0 to $1mil in revenue, from $1m to $20m, from $20m to $100m and from $100m to $1bil. So I do think that most likely a “large company” team will turn Lending Club into a large company (with its processes, bureaucracy and more) and perhaps that is what LC needs.

“What we’re working on. For the remainder of 2016, we are focused on serving you better. We’re making investments in reporting, compliance and controls, technology, and the organizational foundation that will drive the next phase of growth.”

Comment: I find it a little vague and predictable.

Where we’re headed. We have ambitious long term goals. We aspire to allow every type of investor – individual retail and institutional investors – to participate in what we believe is a compelling product that can offer solid risk-adjusted returns. Many more investors of all kinds may benefit from adding Lending Club products to their portfolios, and we’re looking forward to proving that we deserve a place in their portfolios.”

Comment: Many retail investors are concerned that if they are left unprotected institutional investors will have better API connections and technology and they will be left with the notes no sofisticated investor wants.

“Some investors have asked me–after 20+ years at Barclays Global Investors and BlackRock, why did I join Lending Club ? I had the unique opportunity to be a part of the innovative team that created iShares, which today is the global market leader in ETFs. It took many years to grow the iShares business and show investors that it should be a big part of their investment strategy. I see that same parallel with the products we offer at Lending Club”

Comment: There is a tradeoff between salary and equity. Rarely will a salary be a life changing event however it makes people comfortable. People join startups to create a non-negligible probability of a life changing event via equity. They also join to give themselves a challenge when they may be bored. And often at startup/young companies the reward is more proportional to the value added and success.

Fines, Withdrawals, Job Cuts. It Was an Ugly Day for Global Banks, (Bloomberg), Rated: AAA

Comment:These news are critical for a few reasons. First it will affect interbank interest rates, which will propagate into all interest rates. Second, if banks who are top lenders like Wells Fargo have to cut cost they will also cut business lines. Which is a great door open for our industry. And last, if this gets worse, it may in fact be the beginning of a next Greece-like crisis , except affecting major economies.

Commerzbank Chief Executive Officer Martin Zielke announced plans Thursday to eliminate 9,600 jobs

In Washington, came still more blistering attacks on John Stumpf, whose grip atop embattled Wells Fargo & Co., the largest U.S. mortgage lender, remains tenuous amid the uproar over a scandal involving unauthorized accounts.

And then, back in Germany, came the bombshell: revelations that some hedge funds were moving to reduce their financial exposure to Deutsche Bank, now the biggest worry in global finance; sending its New York-listed shares down as much as 9.1 percent

The 38-company Bloomberg Europe Banks and Financial Services Index has tumbled 24 percent this year.

A Message from Prosper and Folio Investing, (Email, Prosper), Rated: AAA

We are writing to let you know that as of October 27, 2016, Prosper will no longer offer the Folio Investing Note Trader platform, the secondary market for Prosper Notes. Prosper has found over time that very few investors are using the secondary market and, as such, has made the decision to no longer offer this service. We apologize for any inconvenience that this causes. Prosper remains committed to its retail investor clients and to providing them a great experience.

Once the secondary market trading service is terminated, you will not be able to sell Notes that you own, and you will need to hold them to maturity.

JPMorgan Hires InvestCloud In Response to Silicon Valley Threats, (Fortune), Rated: A

JPMorgan Chase jpm said it had hired and would take a stake in InvestCloud, which provides software that makes online transactions easier for customers with banking and investment accounts. The InvestCloud deal is also part of Dimon’s commitment to spend $300 million over the next three years on digital improvements in asset management.

Starting early next year, the bank will use InvestCloud to customize website dashboards and mobile apps for clients ranging from individuals with investments of $1,000 to managers of family investment offices with $1 billion or more.

Single-Family Rental Research: Performance Summary – September, (Morningstar), Rated: A

Vacancies increased to 5.0% from 4.8% in July, the first time this metric has touched 5.0% since November 2015. This month’s Performance Summary tracks the performance of 23 single-borrower transactions and more than 90,000 properties. Rents for properties backing single-family rental securitizations in September rose by 5.1% from their prior contractual rents. Delinquencies were flat at 0.6%.

How startup bank Monzo is using a community-based marketing approach, (Tradestreaming), Rated: A

The startup, still in test mode, has added 40,000 new users in under a year by taking a completely open approach to building a product that fits the needs of its customers, which it inevitably calls “Monzonauts.” For instance, Monzo users can submit their needs to an online forum or sound off on Twitter. The company has put its entire product roadmap online, where users can vote on features they’d like to see. For example, a Monzo app for Android devices. After getting 232 votes, this feature rolled out this week.

On its forum, which launched in December, users share tips on things like using a Monzo card abroad. The posts that generate the most discussion in its forum are also included at monthly meetings.

Referrals aren’t new. But they have given Monzo’s word-of-mouth tactics a turbo boost. When users download the app they are added to its waiting list. Those who refer a friend to the service with a unique code are bumped up the queue by 4,000 places. “What we wanted was to get everyone on that list to feel excited about it,” Kursar said. In 48 hours, its landing page received 12,000 submissions.

“We don’t want to become the kind of company where every campaign has 100 different iterations ending with something aggressive that says ‘download, download, download,’” she added.

George Popescu