- Today’s main news: LendingClub on its latest securitization. Atom Bank gets 30M GBP from UK government. Yoyo raises 12M GBP. ArchOver, Escalate partner. Stripe enters 6 new markets. TD Bank opens new branch in British Columbia.
- Today’s main analysis: Banks pass stress test.
- Today’s thought-provoking articles: OCC advises fintechs, MPLs. Congressman launches alt lending investigation. BNP Paribas startup camp the largest in the world. Fintech VC funding slowing down.
- LendingClub comments on securitization.
- Banks pass stress test, Marcus hits $1B. AT: “Marcus is busting it. And from the looks of things, lending-as-a-service is going to be a hot topic among banks and credit unions in the near future.”
- OCC advises fintechs, marketplace lenders. AT: “The new bulletin from the Office of the Comptroller of the Currency is a must-read.”
- Cleaver launches alternative lending investigation. AT: “This is likely a symbolic gesture to make his constituents happy.”
- How to fix and flip a property in your bathrobe. AT: “The benefits of RECF are still overshadowed by the limitations, in my opinion. Accredited investors have great opportunities, but everyone else, not so much. Yet.”
- Online lender accused of “rent-a-tribe” scheme. AT: “If proven guilty, it will spell the end of this startup.”
- CHOICE Act helps fintech, but a new Senate bill may harm it. AT: “A bi-partisan anti-laundering bill would put alternative lenders in the same category as banks.”
- What’s the role of mission-based lenders for small businesses?
- Robo-advice, payments are counterrevolutionary, but not fintech lending.
- Nevada imposes fiduciary obligations on broker-dealers, investment advisors. AT: “This is one state. If it was California or New York, I’d be more worried.”
- DreamFunded pivots toward Reg CF.
- Edward Jones tops Internet search rankings. AT: “Online lenders have to leverage search engine optimization. Today, consumers search for the products and services they want, research them online, and do business only after they have done their due diligence. Even if their purchase is made offline.”
- Lendy appoints three senior hires.
- UK government gives Atom Bank 30M GBP.
- Yoyo raises 12M GBP.
- ArchOver partners with Escalate. AT: “This will allow ArchOver to resolve disputes much quicker and seamlessly.”
- WiseAlpha to complete Crowdcube round with 1.1M GBP plus.
- The ISA that pays 6.1% interest.
- Investec Wealth launches robo platform.
- LendInvest’s growth slows.
- Linked Finance in talks with AIB over lending deal.
- Tencent, Bank of China set up join fintech lab.
- Atradius launches digital credit insurance platform.
- Chinese acquirers face tougher due diligence.
- DCM Ventures leads $10M Series A RECF round.
- WeiyangX Fintech Review.
- Personal credit card issued by the ‘letter’.
- Should you worry about Baidu’s fintech move?
- The largest startup campus in the world is in Paris.
- Stripe enters 6 new markets.
- Sarego starts housing project in Vienna.
- United States
- LendingClub Closes First Self-Sponsored Securitization to Expand Investor Access (LendingClub), Rated: AAA
- Bank Stress Tests Pass, True Lender Contest in CO, GS Marcus hits $ 1 Bn (PeerIQ), Rated: AAA
- OCC Offers Advice on Fintechs, Marketplace Lenders (Lexology), Rated: AAA
- Congressman Cleaver Launches Investigation into Fintech Lending (House.gov), Rated: AAA
- How To Fix And Flip A Property While Wearing Your Bathrobe (Forbes), Rated: A
- Online Lender Accused Of Linking With Tribe To Get Immunity (Law360), Rated: AAA
- CHOICE Act Helps Sharing Economy and FinTech, but a Senate Bill May Harm It (CEI.org), Rated: A
- Small Business Financial Stability: What is the Role of Mission-Based Lenders? (Huffington Post), Rated: A
- Robo-advice and payments are counterrevolutionary, but not fintech lending (AltFi), Rated: A
- Nevada Imposes Fiduciary Obligations on Broker-Dealers and Investment Advisers (National Law Review), Rated: A
- Reg CF Portal Pivot: DreamFunded Abandons Startups for Real Estate Crowdfunding (Crowdfund Insider), Rated: A
- Edward Jones Tops Internet Search Ranking (Barrons), Rated: B
- Lendy Expands: Appoints Three New Senior Hires to Team (Crowdfund Insider), Rated: B
- United Kingdom
- Atom Bank gets £30 million from the government as Philip Hammond pledges investment boost (Business Insider), Rated: AAA
- Yoyo raises £12m as fintech defies Brexit fears (Financial Times), Rated: AAA
- ArchOver partners with Escalate (Bridging & Commercial), Rated: AAA
- WiseAlpha Set to Complete Crowdcube Round With More Than £1.1 Million in Funding (Crowdfund Insider), Rated: A
- The new ISA that pays 6.1% interest on your money – everything you need to know (Mirror), Rated: A
- Investec Wealth launches ‘robo advice’ platform offering active management (AltFi), Rated: A
- Fintech LendInvest’s growth slows due to ‘challenging’ property market and investment (Business Insider), Rated: A
- Linked Finance talking to AIB about lending deal (Independent.ie), Rated: A
- Tencent and Bank of China jointly set up a joint financial and technical laboratory (01Caijing), Rating: AAA
- Credit Insurance Meets Fintech: Hong Kong’s Atradius Launches New Digital Platform (Crowdfund Insider), Rated: AAA
- Chinese acquirers face tougher due diligence (Financial Times), Rated: A
- DCM Ventures leads $ 10m Series A in Chinese real estate crowdfunding platform (Deal Street Asia), Rated: A
- WeiyangX Fintech Review (Crowdfund Insider), Rated: A
- Personal credit card issued by the “letter” or will be established (iFeng), Rated: A
- Should You Worry About Baidu’s Fintech Move? (Madison.com), Rated: A
- European Union
- BNP Paribas to Setup a 1,000-Startups Campus in Paris, France (Crowdfund Insider), Rated: AAA
- Stripe refocuses European effort with 6 new markets and expanded payments platform (VentureBeat), Rated: AAA
- Sarego, a New Crowdfunding Platform for Real Estate, Starts with Large Housing Project in Vienna (Crowdfund Insider), Rated: A
- FinTech VC Funding Slowing (Forbes), Rated: AAA
- EY Fintech Adoption Index: China Leads the Pack. USA is Just Average (Crowdfund Insider), Rated: A
- Australia/New Zealand
- ASIC permanently bans former AMP Financial Planning adviser from financial services (Leaprate.com), Rated: A
- Itochu partners with Sinar Mas on Indonesian fintech (AltFi), Rated: B
- Middle East
- A deeper look at the Middle East’s FinTech market (ITP.net), Rated: A
- TD opens new branch in Richmond, B.C. at Gilbert and Lansdowne (Newswire), Rated: AAA
- Fintech Sandbox expands to Canada (Finextra), Rated: A
LendingClub Closes First Self-Sponsored Securitization to Expand Investor Access (LendingClub), Rated: AAA
LendingClub (NYSE:LC), America’s largest online marketplace connecting borrowers and investors, today closed its inaugural self-sponsored securitization deal. The Consumer Loan Underlying Bond (CLUB) NP Credit Trust 2017-NP1 (CLUB 2017-NP1) issued $279.4 million in notes backed by consumer loan assets facilitated through the LendingClub platform. The transaction marks the start of LendingClub’s securitization program as Sponsor, Servicer and Administrator. LendingClub expects to sponsor programmatic securitizations and to use the CLUB structure for future transactions. This is the fifth securitization backed by consumer loan assets facilitated through the LendingClub platform and the third rated securitization of such assets overall.
LendingClub anticipates that programmatic use of the CLUB structure could provide institutional ABS investors with consistent access to securitized assets facilitated through its platform, standardization, consistency, and a more efficient means of financing for the long-term. The transaction was rated by Kroll and includes $162.4 million of Class A notes rated “A- (sf)”, $41.2 million of Class B notes rated “BBB (sf)” and $75.7 million of Class C notes rated “BB (sf)” backed by approximately $337 million of collateral. Each tranche of notes was oversubscribed by a diverse set of investors, most of whom were new to investing in assets facilitated by LendingClub. Citi and JP Morgan acted as lead underwriters. BNP and Jefferies acted as co-managers.
“I’m very pleased with our execution. We’re broadening our platform to tap into a large and liquid ABS market and with this deal we’ve reached 20 new investors, including insurance companies and large asset managers who are looking for new ways to access the platform,” said Patrick Dunne, Chief Capital Officer of LendingClub. “This transaction also demonstrates a capital markets financing alternative for the portfolios of our existing investors, which may provide better pricing transparency and enhanced liquidity.”
Bank Stress Tests Pass, True Lender Contest in CO, GS Marcus hits $ 1 Bn (PeerIQ), Rated: AAA
This week, major banks passed their Comprehensive Capital Adequacy Review (CCAR):
One bank that has recently entered the lending market, GS Bank, reports they have achieved a $1 Bn lending milestone and remain on track to generate $2 Bn in loans by year-end – amongst the fastest growth rates we have seen across the PeerIQ data & analytics platform.
In the wake of emerging bank competition in the prime & super-prime category, non-banks are applying a few strategies:
- Focus on underserved credit segments where traditional banks outside of a few specialists will not compete (e.g., Fair Square Financial, Loan Depot, various non-QM lenders)
- Compete on brand and service, rather than rate, by offering a better customer experience and integrated product mix to a targeted customer segment. (e.g., SoFi)
- Lending-as-a-Service models that enable banks and credit unions to compete with licensed technology (e.g., Upstart, Avant, LendKey)
On the securitization front, three deals from non-bank lenders priced this week including Springleaf ($650 MM), Lendmark ($350 MM), and Marlette ($323 MM).
OCC Offers Advice on Fintechs, Marketplace Lenders (Lexology), Rated: AAA
Defining a third-party relationship as “any business arrangement between the bank and another entity, by contract or otherwise,” the OCC explained that it can include activities that involve outsourced products and services; use of outside consultants, networking arrangements, merchant payment processing services, and services provided by affiliates and subsidiaries; joint ventures; and other business arrangements in which a bank has an ongoing third-party relationship or may have responsibility for the associated records.
Whether or not a fintech company arrangement can be considered a critical activity depends on a number of factors, such as whether significant bank functions (payments, clearing, settlements and custody, for example) are involved or other activities that could have a major impact on bank operations if the bank has to find an alternative third party or if the outsourced activities have to be brought in-house.
The bulletin also clarified that no requirement exists that a third party must meet the bank’s lending criteria in order to establish a relationship.
Banks must also establish appropriate processes and systems to effectively monitor and control the risks inherent within the marketplace lending relationships, the OCC said, from adequate loan underwriting guidelines to cover credit risk management to ensuring the marketplace lender has adequate compliance management processes in place to satisfy compliance risk management concerns.
To read Bulletin 2017-21, click here.
Congressman Cleaver Launches Investigation into Fintech Lending (House.gov), Rated: AAA
Today, U.S. Congressman Emanuel Cleaver, II launched an investigation into small business FinTech lending, including online companies that offer payday loan-like products for small businesses and individual consumers.
In a letter from Congressman Cleaver to the Chief Executive Officers of several rapidly emerging FinTech small business lenders, the executives were asked to share information about their company products, fees, and methods when it comes to disclosures and potentially discriminatory practices. The letters were sent to Lending Club, Biz2Credit, Fora Financial, Prosper, and Lend Up. Companies are expected to respond by August 10, 2017.
How To Fix And Flip A Property While Wearing Your Bathrobe (Forbes), Rated: A
In the first quarter of 2017, according to ATTOM Data Solutions, there were 43,615 single family homes and condos flipped. These types of transactions accounted for 6.7% of all homes sold in Q1. Across all markets, flippers averaged a $64,284 gross profit, according to ATTOM.
This other way to invest has to do with another statistic in ATTOM’s report: “Flippers” borrowed an astounding $3.5B in Q1 to facilitate property acquisition and repairs. What’s not widely known is that a majority of this capital comes not from banks, but from private investors.”
- The platforms source projects from real estate flippers through digital and boots-on-ground marketing.
- Each platform has underwriting criteria that helps to determine which projects will be selected for funding. Our firm requires the flipper to have completed at least three projects in the last 12 months.
- If everything checks out, the platform will fund the project and secure a first-position mortgage on the house.
- Most platforms are “pre-funding” the loan, meaning they’re using their own capital to originate the loan.
- For your investment, you can earn anywhere between 7-12% annualized return.
However, there are still some limitations.
- Accredited investors only
- Startup risk
- Lack of control
Online Lender Accused Of Linking With Tribe To Get Immunity (Law360), Rated: AAA
A group of Virginia residents filed a proposed class action in federal court Thursday alleging that an internet lending company engaged in a “rent-a-tribe scheme” to allow it to charge illegally high interest rates on its loans while attempting to use a Michigan tribe’s sovereign immunity as a shield from suit.
Lula Williams and four other plaintiffs claimed in their complaint that Big Picture Loans LLC purported to be owned and operated by the Lac Vieux Desert Band of Lake Superior Chippewa Indians.
CHOICE Act Helps Sharing Economy and FinTech, but a Senate Bill May Harm It (CEI.org), Rated: A
The U.S Senate should get to work on passing portions of the CHOICE Act, particularly regarding the sharing economy and FinTech. It should also shelve legislation that would harm those sectors.
One example of the latter is a terrible bill from Sen. Charles Grassley (R-IA) and Diane Feinstein (D-CA) that would shove any “issuer, redeemer or cashier” of a “digital currency” into the same anti-money laundering regulations as those that govern the big banks. This bill is called the Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017.
Small Business Financial Stability: What is the Role of Mission-Based Lenders? (Huffington Post), Rated: A
Small business ownership’s promise of long-term asset generation is not without tradeoffs. Unexpected shortfalls in revenues or increases in expenses can be devastating to a young business, and recent research by the JPMorgan Chase Institute reveals that small businesses operate with tenuous cash reserves to cover these costs. In fact, the typical small business could only cover expenses for 27 days in the case of a financial emergency. For businesses in low-wage industries, that time window drops to 19 days.
Business cash flow volatility often has consequences for household finances. Most small business owners (76%) respondto cash flow challenges by using personal funds. This could mean drawing from personal savings, foregoing a personal salary or maxing out credit utilization limits, which can damage one’s credit score and impact opportunities to secure future sources of financing. (The majority of small business owners use personal credit scores to apply for business capital.) Accion and Opportunity Fund borrowers generally re-invest business profits into the business rather than the household – 55% of study respondents experienced an increase in business profits in the previous six months but only 30% increased their household savings over the same period.
Often, small business owners find themselves in a cycle of debt after taking out a high-cost loan. In fact, approximately one in four small business loan applicants cite refinancing existing debt as their main reason for applying. Recognizing this trend in their own applicant pool, Opportunity Fund analyzed alternative loan contracts for 104 small business owners seeking relief from high-cost loan debt. Their analysis found that the average loan imposed an annual percentage rate (APR) of 94%. Further, the average monthly loan payment for business owners was nearly double their net income.
What is the role of mission-based lenders?
- Lending innovation: alternative finance products fulfill an important demand—to keep the doors open in the case of a pressing financial need. Mission-based small business lenders must better meet that immediate need before entrepreneurs turn to costlier options.
- Financial advising: Among those who participated in Accion and Opportunity Fund’s study, just over a half (54%) used a business financial plan. This illustrates the imperative of increased investment in financial advising that better equips business owners to plan for and manage financial emergencies while building long-term stability.
- Education: The financial landscape is convoluted and ever-changing, and entrepreneurs need support in navigating their options. Accion publishes 90+ online resources per year to help business owners build their business and financial skills. Opportunity Finance Network’s Venturize campaign, which helps small business owners understand their financing options, generated over 73 million impressions in its first year.
- Leadership: Advancing responsible lending practices is not just a moral imperative. It’s also a business imperative to ensure client satisfaction and business survival.
Worse: because it can easily be adopted by incumbents, robo may not just be un-revolutionary but actively counterrevolutionary, claims a new report by Silicon Valley think tank the Christensen Institute.
Payments is put in the same boat, noting it requires close cooperation with powerful businesses who control important infrastructure. And cooperation means large chunks of fees collected from merchants must be shared.
The report reserves higher praise for the marketplace lending which, it claims, has enormous potential and could even undermine banking majors’ ability to set interest rates.
Nevada Imposes Fiduciary Obligations on Broker-Dealers and Investment Advisers (National Law Review), Rated: A
Broker-dealers and investment advisers with clients in Nevada should review the fiduciary obligations contained in new amendments to the Nevada financial planner statute that go into effect on July 1, 2017.
As a result of the June 2017 Amendments, broker-dealers, investment advisers, and their representatives will now be classified as “financial planners” for purposes of the Nevada Securities Act and will become subject to the following provisions of the financial planner law:
- Duties—A financial planner has the duty of a fiduciary toward a client. Accordingly, a financial planner shall disclose to a client, at the time advice is given, any gain the financial planner may receive, such as profit or commission, if the advice is followed.
- Liability—If loss results from following a financial planner’s advice under any of the following circumstances, the client may recover from the financial planner in a civil action the amount of the economic loss and all costs of litigation and attorney fees. The circumstances giving rise to liability are that the financial planner (1) violated any element of his or her fiduciary duty; (2) was grossly negligent in selecting the course of action advised, in light of all of the client’s circumstances known to the financial planner; or (3) violated any law of Nevada in recommending the investment or service.
However, there are still some uncertainties that arise from this determination by Nevada to apply a statute intended for financial planners to broker-dealers and investment advisers. These include the following:
Duties—The June 2017 Amendments could be read to create a continuing fiduciary duty after delivering a financial plan. Registered investment advisers now deliver the plan and state that delivery ends the relationship (i.e., no continuing duty).
Delivery of Compensation Information—Delivery timing may be slightly off from Form ADV delivery. Form ADV is delivered to a client at or before the opening of the account, while the June 2017 Amendments call for delivery at the time advice is given.
Point of Sale Disclosure—It is not clear if the point of sale disclosure of compensation is intended to be different from the level of disclosure currently provided. In this regard, use of the term “gain” can be viewed as involving a different calculation than fees charged.
Broader Inquiry—The obligation under the June 2017 Amendments to “keep currently informed, concerning the client’s financial circumstances and the client’s present and anticipated obligations and goals for his or her family” arguably is a greater burden than is currently required.
Reg CF Portal Pivot: DreamFunded Abandons Startups for Real Estate Crowdfunding (Crowdfund Insider), Rated: A
DreamFunded, a FINRA approved Reg CF portal, has pivoted from its original model of providing access to capital for early stage companies. Today, instead of the next cool startup gracing the pages of DreamFunded there are single family homes up for investment.
Currently, they are in the legal process of getting our 1st Title III real estate debt deal approved, which expects to go live on July 5th, 2017.
Edward Jones Tops Internet Search Ranking (Barrons), Rated: B
The 15,000-advisor firm is dominating its rivals when it comes to pulling those searchers to its sites, InvestmentNews reports, citing a new study from Hearsay Systems and Moz.
Edward Jones spends nearly half of its media investment on digital marketing, Olsen tells the publication. Most of that is geared to the local digital space. Each advisor and branch has a custom microsite—a separate site outside the main company homepage.
Morgan Stanley ranked second in overall click share percentage. It also came out on top in paid searches, or ads. Wells Fargo Advisors and Fidelity Investments came in second and third on that list.
Lendy Expands: Appoints Three New Senior Hires to Team (Crowdfund Insider), Rated: B
Peer-to-peer lending platform Lendy recently announced it has appointed three new senior hires to its growing team. Shane Lewin was named compliance officer, while Shaun Reynolds was appointed development finance support manager, and Pamela Guillamon was appointed international marketing manager.
Atom Bank gets £30 million from the government as Philip Hammond pledges investment boost (Business Insider), Rated: AAA
Startup bank Atom has received a £30 million funding boost from the state-owned British Business Bank (BBB).
British Business Bank Investments, the commercial arm of the BBB, announced it has agreed a £30 million Tier 2 capital facility with Atom, a digital-only bank founded in 2014. The facility, effectively a loan to Atom, will allow the Durham-based bank to lend out more money to small businesses.Startup bank Atom has received a £30 million funding boost from the state-owned British Business Bank (BBB).
Yoyo raises £12m as fintech defies Brexit fears (Financial Times), Rated: AAA
Yoyo Wallet, the fast-growing British mobile payments app, has raised £12m from investors including the German retailer Metro Group and fund manager Neil Woodford to finance its expansion in Europe and the US.
Yoyo, which recently passed the milestone of processing more than 1m monthly payments for its 400,000 registered users, has grown rapidly since its creation four years ago as a mobile app to pay for goods in university student unions.
The app is used to handle payments in 1,700 outlets, including over 60 UK and Irish universities; the canteens of several big companies such as JPMorgan Chase; and retailers such as Caffè Nero and Planet Organic.
The latest fundraising, which takes the total Yoyo has raised in three rounds to over £20m, will be used to finance the company’s expansion in the US.
ArchOver partners with Escalate (Bridging & Commercial), Rated: AAA
Peer-to-peer lending platform ArchOver has become the first UK lender to partner with commercial dispute resolution service Escalate.
The partnership will increase ArchOver’s ability to provide loans for the SME market, as well as helping borrowers collect disputed payments and enhancing security for lenders.
Escalate will enable ArchOver to recoup any disputed assets being used as security for loans over the ArchOver platforms.
WiseAlpha Set to Complete Crowdcube Round With More Than £1.1 Million in Funding (Crowdfund Insider), Rated: A
WiseAlpha, a UK online lending platform that gives everyday investors access to high yield institutional bond and loan investments, is set to close its equity crowdfunding campaign on Crowdcube with more than £1.1 million secured from nearly 1,000 investors.
The average interest on a cash ISA is running at 0.4% according to recent figures.
So the news that a new ISA is paying 6.1% is bound to make people’s ears prick up.
Customers can put as much as £20,000 into a Zopa innovative finance ISA.
There are two rates on offer – a “Core” deal paying 3.9% returns and a “Plus” offering that pays 6.1%.
So far this year just 0.08% of loans have defaulted, although in the worst years of the credit crunch as many as 4.21% did.
Most of the time, fewer than 2% of loans actually default.
Investec Wealth & Investment has launched a new online investment platform called Click & Invest, aimed at competing in the fast growing ‘robo advice’ market.
The firm, which is one of the larger wealth management firms and part of the wider Investec group, has more than £32.5bn of client funds under management. Its new platform aims to differentiation from the majority of robo-platforms “by going beyond algorithms and offering an actively managed investment strategy”, selecting from over 300 actively managed funds.
Individuals are not charged for setting up and creating a portfolio, commission, transferring in, withdrawing money or closing an account. Fees for Click & Invest are 0.65 per cent on the first £100,000 invested, 0.50 per cent on the, £10,000 invested and 0.35 per cent on any amounts invested over £250,000.
Fintech LendInvest’s growth slows due to ‘challenging’ property market and investment (Business Insider), Rated: A
Online mortgage marketplace LendInvest saw revenue growth slow and profits dive last year as it invested for growth and dealt with “challenging” market conditions.
Accounts seen by Business Insider show LendInvest’s revenue grew from £18.6 million to £22.1 million in the year to March 2017. That’s a significant slowdown on the prior year when revenues jumped to £18.6 million from £7.2 million in 2015.
The company made a loss of £1 million in the year to March 2017, down from a pre-tax profit of £2.4 million in 2016. Operating profits shrunk from £3.3 million to £52,000.
Linked Finance talking to AIB about lending deal (Independent.ie), Rated: A
Irish online lending company Linked Finance is in talks with AIB and other major Irish banks about future collaborations, its founder said.
Serial investor Peter O’Mahony, who founded the peer-to-peer lending platform, said the firm had been approached by AIB, Bank of Ireland and Ulster Bank.
Talks with all three banks are still at an early stage, but O’Mahony said there were a number of possibilities for collaboration.
Tencent and Bank of China jointly set up a joint financial and technical laboratory (01Caijing), Rating: AAA
Recently, the “Bank of China – Tencent Financial Technology Joint Laboratory” was established. Bank of China and Tencent Group will focus on cloud computing, large data, block chain and artificial intelligence and other aspects of deep cooperation, build Pratt & Whitney Finance , cloud finance, smart finance and technology finance.
Credit Insurance Meets Fintech: Hong Kong’s Atradius Launches New Digital Platform (Crowdfund Insider), Rated: AAA
Hong Kong-based credit insurance provider Atradius announced on Thursday the launch of its new digital fintech platform, Atrium. The company describes the portal as an innovative tool that provides customers and distribution partners with real-time data to better understand buyers, credit limits, and risks a company poses.
Chinese acquirers face tougher due diligence (Financial Times), Rated: A
A regulatory probe announced by China into the “systemic risk” of some of its biggest overseas acquirers is both welcome and troubling. Welcome because Beijing is raising a red flag over corporations long known for high leverage and opaque operations. Troubling because it creates big uncertainties, both for the future of Chinese outbound investment and for the several notable US and European brands snapped up in recent years.
The companies included so far in what is being called a “fact-checking” initiative are Dalian Wanda, the property-to-entertainment company, Fosun International, the consumer group, HNA, a diversified conglomerate, and Anbang, an unlisted insurer. Together, these four have bought $56bn-worth of companies in the past five years.
DCM Ventures leads $ 10m Series A in Chinese real estate crowdfunding platform (Deal Street Asia), Rated: A
DCM Ventures has led a $10-million Series A round in Duocaitou, a crowdfunding platform for accommodation industry, according to a company announcement.
Shunwei Capital, which is co-founded by Xiaomi’s chief executive Lei Jun, also joined this round.
To date, it claims total fundraising on the platform has reached RMB4.6 billion ($670 million) from more than 10,000 individual investors.
WeiyangX Fintech Review (Crowdfund Insider), Rated: A
Jiangsu Suning Bank Co., Ltd., a private online bank backed by Suning Commerce Group Co., Ltd., officially launched last Friday.
Like many of its peers, Suning Bank aims to create an online-to-offline bank driven by technology and taking advantage of its 1,576 offline direct-sale stores and thousands of franchise stores to offer payment and banking services to customers. Suning Commerce and Jiangsu Sunrain Solar Energy contributed CNY 1.2 billion and CNY 944 million to the new bank, holding a 30% and 23.6% interest respectively, and the total valuation of the bank exceeded CNY 4 billion.
On June 12th 2017, in presence of the Prime Ministers of both countries, a Memorandum of Understanding was signed between China’s National Internet Finance Association (NIFA) and Luxembourg House of Financial Technology (LHoFT), providing a framework to intensify the cooperation between both countries in the area of digitalization of financial services.
Shenzhen Futian district has announced that it is forming a Fintech advisory committee to conduct industrial policy research, giving advice on investment promotion and gather input on regulation issues and industry trends. The committee will include 30 experts and representatives from various sections of the fintech industry.
Additionally, Futian district and Shenzhen Stock exchange also announced the launch of the first FinTech Index in China, which provides a benchmark to track the performance of companies engaged in financial technologies. The index includes all technologies applied to financial services as blockchain, digital payment and P2P online payment. It is based on May 26, 2017, and the base points are 3000.
On June 14, China Asset Management Co., Ltd. (China AMC) and Microsoft Research Asia jointly announced that the two sides will carry out strategic and cooperative research on the application of artificial intelligence in financial services and promote the intelligent transformation of the asset management industry.
On June 14, the Shenzhen Internet Finance Association, Hong Kong’s Internet Professional Association (iProA) and Singapore’s FinLab announced the establishment of the Shenzhen-Singapore-Hong Kong Fintech Hubs Federation.
China’s biggest dairy firm, Yili Industrial Group plans to invest CNY 300 million to set up a small-loans lender in Inner Mongolia Autonomous Region.
Personal credit card issued by the “letter” or will be established (iFeng), Rated: A
Phoenix WEMONEY news on the evening of June 22, Phoenix WEMONEY was informed that the personal credit card issued by the suspension, a number of third-party institutions or will initiate the establishment of “letter of the Union.”
April 20, the central bank credit management bureau director Wan Cunzhi in the “personal information protection and credit management” international seminar, for the first time announced, including sesame credit, Tencent letter, including the first batch of eight pilot personal credit card Of the credit business without a qualified.
Should You Worry About Baidu’s Fintech Move? (Madison.com), Rated: A
About 160 million people in China took out 1.2 trillion yuan ($180 billion) in online loans last year, according to iResearch. The firm sees that figure growing at an annual rate of 50% over the next three years.
iResearch reports that the average overdue rate ranges from 10% to 20%, and is the “main factor that prevents online lending from becoming a mainstream channel in China’s financial industry.”
Baidu’s Financial Services Group (FSG), which was officially formed a year ago, had 25 billion yuan ($3.7 billion) in assets at the end of its last quarter, which accounted for 12% of its total assets.
Fitch believes that Baidu’s credit risk is higher than Alibaba and Tencent’s, since those two companies are more profitable and have stronger cash flows.
But even if Moody’s downgrades Baidu’s debt from A3 to Baa1, or Fitch cuts its current rating from A to A-, the bonds would still be well within “investment grade” parameters.
BNP Paribas to Setup a 1,000-Startups Campus in Paris, France (Crowdfund Insider), Rated: AAA
There are nowadays gazillions of accelerators, incubators and startup labs, but no one comes close to Station F. Here is why:
- The sheer size of the campus: 34,000 square meters, 310 meters long (the size of the Eiffel tower!), 1,000 startups, 3,000 startup workstations, and a total capacity to host 9,000 people. The building also houses 8 event spaces and many recreational areas, including a tennis court. More than 250 million euros are invested in its construction.
- More than 17 big brand incubators. Next to BNP Paribas, HEC Business School, Facebook, China-based Serrinnov, online retail group Vente-Privé, VC firm Daphni, industrial group Thalès, South-Korea’s Naver, and more than a dozen other companies from all sectors will run their innovation lab or startup accelerator from Station F to benefit from the emulation and the synergies that the space offers.
For its Station F program, BNP has chosen to partner with a global partner, Plug and Play, a Silicon Valley-headquartered innovation platform with 22 locations around the world. Plug and Play prides itself with a track record of more than 2,000 backed or accelerated startups, including well-known brands like DropBox and SoundHound, and Fintechs like PayPal and Lending Club. Plug and Play invests in over 100 companies every year and connect startups to corporations.
The partnership between BNP Paribas and Station F will extend beyond hosting the accelerator. BNP Paribas will also become a reference bank for the startups and digital workers of Station F. Depending on their needs, these young companies will be able to draw on the wide range of services of the group which covers the whole spectrum from corporate finance and private equity to mobile personal finance.
Stripe refocuses European effort with 6 new markets and expanded payments platform (VentureBeat), Rated: AAA
Stripe has announced a handful of tidbits that underscore the fast-growing fintech startup’s aspirations in Europe.
Thus far, Stripe has only been fully available to businesses in the U.K., Ireland, Denmark, France, Spain, Norway, Finland, and Sweden. But as of this week, another six markets have been added to the mix: Germany, Switzerland, the Netherlands, Austria, Belgium, and Luxembourg.
Sarego, a New Crowdfunding Platform for Real Estate, Starts with Large Housing Project in Vienna (Crowdfund Insider), Rated: A
German real estate crowdfunding platform Sarego that uses platform technology from CrowdDesk, private investors may now invest in the first real estate project on the platform. The project is for the development company Vermehrt GmbH who is crowdfunding one million euros for the energy-efficient renovation and modernization of Gründerzeit-old building in Vienna.
FinTech VC Funding Slowing (Forbes), Rated: AAA
US VC funding for Fintech was down by 13% to at $6.2 billion in 2016, much of this attributed to poor performance of lending platforms and a contraction of investment as VCs re-examine where the money is going to be made in FinTech moving forward. It was noted that there were virtually no new entrant digital banks in the US.
The UK attracted $834 million of investment in 2016, down by 38%, mainly attributed to Brexit, though a bumper venture round following the referendum delivered 8 of the top 20 deals attracting $368 million.
New digital challenger banks Atom and Monzo jointly attracted over $150 million in the first half of 2017 highlighting some of the differences between US and UK FinTech when it comes to lending platforms and digital banks.
FinTechs across the payments space continue to grow and MortgageTech / RealEstateTech is emerging and is being watched closely.
Though later stage valuations have appeared to come down, they still look high, and “flat” appears to be the new “up”.
Of the many attributes that VCs look for in startups: market, product fit, disruption and innovation, the key one critical to success is talent: the founder / CxO and team:
- Repeat entrepreneur?
- Domain expertise?
- Do strategy within a complex highly regulated ecosystem?
- Marry strategy with detail and execution?
- Recruit outstanding people that follow?
EY Fintech Adoption Index: China Leads the Pack. USA is Just Average (Crowdfund Insider), Rated: A
EY has published the “Fintech Adoption Index 2017” that grades the various markets where EY operates so just about most of the developed world. When you think about the giant internet firms in China, and the ubiquity of mobile internet, it just makes sense that China leads the way.
ASIC permanently bans former AMP Financial Planning adviser from financial services (Leaprate.com), Rated: A
ASIC announced that has permanently banned Perth man, David Fong, from providing financial services and engaging in credit activities after it was found that he acted dishonestly in the course of providing financial services and failed to comply with the ‘best interests’ duty.
ASIC decided to ban Mr Fong permanently after finding that he:
- engaged in dishonest conduct relating to client records and applications for financial products;
- provided advice to clients that did not comply with the best interests duty, was not appropriate and did not leave them in a better position having received the advice.
Itochu partners with Sinar Mas on Indonesian fintech (AltFi), Rated: B
Itochu, Japan’s second-largest trading company, has bought a US$50 million stake in an Indonesian P2P lending company as it views Indonesia’s weak financial infrastructure as a fertile harvest for fintech credit services, Nikkei Asian Review reports.
A deeper look at the Middle East’s FinTech market (ITP.net), Rated: A
Despite a record-setting 2015 year that saw total global funding to Fintech companies reach $46.7bn, 2016 saw a decline in Fintech investment by 47.2%.
The quarterly report noted that despite VC investments slowing down in the second half of 2016, the year concluded with $2bn invested in Q416 across 200 deals. As a result, VC funding to Fintech companies reached a record of $13.6bn in 2016, up from the $12.6bn reported the year before.
KPMG also highlighted that corporate VC investment in Fintech rose for the seventh year in a row, reaching 145 deals and a total of $8.5bn in 2016.
TD opens new branch in Richmond, B.C. at Gilbert and Lansdowne (Newswire), Rated: AAA
TD opened a new concept branch in Richmond’s Cadence by Cressey community that marries environmental sustainability and legendary customer service in a uniquely inviting space. The branch, at the corner of Gilbert Road and Lansdowne Road in Richmond, is conveniently located in the new Cadence community which is walkable and close to the waterfront and Richmond’s Olympic Oval.
More comfort, convenience and sustainable attributes include:
- An inviting, open concept feel encourages collaboration and conversation so customers can get the meaningful, personalized advice they need. When customers come into the branch, there is a mural of the Lansdowne Park Race Track circa 1928.
- Energy-efficient design sustainably-sourced finishes help reduce the branches environmental footprint and reinforce our commitment to the environment.
- A customer lounge offers a comfortable space to gather or wait for an appointment with access to tea and coffee.
- Free Wi-Fi access for customers to use while they wait or to use during an appointment.
- Digital displays throughout the branch offer customers access to current information, advice and tips to help manage their finances while they wait to see a customer service representative.
- Sustainable interior elements like responsibly sourced wood finishes, recycled materials and low-energy LED lighting.
- A flexible, scalable design allows the branch to easily grow and adapt along with the needs of the community.
The branch is also designed to be a full-service advice centre with employees to meet all its customers’ financial needs in multiple languages, including English, Mandarin and Cantonese.
As part of TD ‘s extended hours, the branch is open seven days a week – 9:00 am to 6:00 pm, Monday through Wednesday; 9:00 am to 8:00 pm Thursday and Friday; 9:00 a.m. to 4:00 p.m. on Saturday; and 11:00 am to 4 pm on Sunday.
Fintech Sandbox expands to Canada (Finextra), Rated: A
Today Ontario Centres of Excellence (OCE) and Boston-based FinTech Sandbox, signed an historic memorandum of understanding (MOU) to collaborate and expand the FinTech Sandbox model into Canada, starting in Ontario.
FinTech Sandbox will open its program in Ontario, which will provide quality data products from 32 industry-leading partners, to qualified start-ups in Ontario.