Lendr is a platform that is looking to revolutionize the loan origination and loan management process by considering all parameters like past performance and future potential, and it is not dependent exclusively on credit score. The team at Lendr aims to provide a fast, transparent, and simple solution for businesses and fill the gap for […]
Lendr is a platform that is looking to revolutionize the loan origination and loan management process by considering all parameters like past performance and future potential, and it is not dependent exclusively on credit score. The team at Lendr aims to provide a fast, transparent, and simple solution for businesses and fill the gap for specialty finance on the broker’s side of the business.
Lendr was established as a joint venture with four partners by founder Tim Roach in New York in 2011. Its core business was feeding leads to lending companies.
George Greco was the co-founder of the company, but he left in 2016. Roach served as CFO from 2011 -2013 and, in 2016, was appointed CEO.
The company also left its legacy system in 2016 and invested in a new lending platform to provide a seamless experience to customers. The company was initially incorporated as Viking Funding Group but, in 2016, was rebranded to Lendr and subsequently moved its headquarters to Chicago.
Lendr has over 40 employees and has achieved double-digit growth since inception. The company has gone on to raise $5 million in equity from a set of five investors.
The Lendr Business Model
Lendr’s core offering is in specialty financing called merchant cash advance (MCA). This is not a traditional loan, and disbursement depends on the company’s everyday credit/debit transactions.
Unlike underwriting models such as FICO that focus on current/past cash funds and transactions, Lendr is based on a forward-facing model, which primarily focuses on the future ability of a borrower to repay funds. For instance, repayment of funds is carried out by taking a percentage of daily bank deposits until the loan is repaid. Lendr offers a broad variety of loan-related products. These include business financing, startup business funding, working capital, small business funding, and equipment financing.
The company leverages Wizard, its proprietary underwriting credit model, for capturing information and searching databases to find the right loan for the borrower. The Lendr platform is based on cutting edge technology capable of providing a lender score (0-100) based on customer responses within two hours. Based on this score, a rate card, interest rate, and advance rate can be calculated. The score is not dependent on FICO for loan eligibility. Once an application is approved, funds will be remitted in less than two business days. A daily or weekly amount will then be automatically debited from borrower account.
The company leverages artificial intelligence to capture borrower data and identify patterns. It is using AI to predict what will happen in the future.
AI also helped Lendr increase its speed in underwriting. Roach said the underwriting process once took three days. In 2017, that was reduced to eight hours. Now, the algorithm can complete a case in just two hours.
In April 2018, Lendr launched a business debit card for SMEs that allows a borrower to get access to funds instantaneously through a virtual master card. It followed this up by also launching a traditional plastic card. It will have the facility to auto renew without waiting for approval, which earlier used to take up to two hours. Also, consumers are not required to wait for disbursement of funds (1-2 days) and will get direct access to funds without any paperwork. Repayment will be weekly or daily based on consumer preference. By the end of Q3 2018, the company is looking to offer a line of credit to borrowers.
Lendr APIs and Competitive Advantage
Lendr has association with many third-party vendors to facilitate the loan process. It has built robust API rules to interact with external vendors and also makes sure to comply with data privacy rules and regulations.
The integration process costs have been reduced by 90% due to the APIs, which are able to interact with multiple vendors and can extract data related to collections, sales, and customer relationship management. This data can be used to perform predictive analysis and run different algorithms to extract results. Results obtained from these algorithms can be used to understand client risk profile, comparing different clients with same kind of risk profile, and provide automated tax analysis with a scoring matrix.
As of now, Lendr processes are around 40%-50% automated loans, and the company can achieve disbursement of funds in 1-2 days. By the end of this year, the startup’s goal is to approve a loan within 90 minutes and fund clients within the same day.
Kabbage is one of the largest of the five or six serious competitors. These competitors can be an expensive proposition for a borrower as they levy higher-than-expected interest rates. Some small businesses are being charged over 180% interest for merchant cash advances. Lendr, on the other hand, charges 15%-25% APR, which is extremely reasonable as compared to other competitors.
Lendr has also recently partnered with MidCap Financial Trust to close a $25 million senior credit facility. This partnership solidifies Lendr’s position in the specialty finance niche.
Lendr is able to achieve MCA originations of $8-$10 million per month and is committed to increasing this number to $12-$15 million by year end. Since inception, the customer base has surged to over 10,000. The company has also been successful in retaining its clients and is providing approximately 2.8 loans per customer. The company aims to increase this to four loans per customer. Lendr is also looking to increase the overall average loan tenure to 14 months.
Features like flexible payment plans, no priority to credit history, short term loans, disbursement of the amount in 1-2 days are key differentiating factors, which makes Lendr a fine choice for small and medium businesses.
News Comments Today’s main news: Funding Circle U.S. sees loan defaults go up. OnDeck sales expectations. LendInvest raises $39.5M. Zopa boosts target interest rates on all products. UnionPay launches European expansion. Qatar Investment Authority could invest in Lufax. Today’s main analysis: Navient, Nelnet and the student loan market. Today’s thought-provoking articles: This former Googler, Facebook employee is running with SoFi. What’s […]
In August, more corporate borrowers defaulted on their loans issued by Funding Circle‘s U.S. operations than they did previously in 2018. According to Peer2Peer (P2P) Finance News reports on Friday (Sept. 14), the Funding Circle SME Income Fund (FCIF) revealed there were seven corporate loan defaults in during the month, up from the year’s average so far of six per month.
Still, the company noted, the value of those defaults has inched higher, too. Reports said the FCIF’s net asset value return for August dropped to 0.1 percent from 0.4 percent a month prior, with analysts citing rising impairment charges as a result of the U.S. loan defaults.
Libby Leffler, vice president of membership at Social Finance (SoFi), negotiated with the tooth fairy as a child. “Looking back, I think this lighthearted family story speaks volumes about the way I think about negotiating or knowing one’s worth. Throughout my entire career, I’ve never been shy to ask for a raise or promotion – or both,” she says.
As an adult, Leffler continues to “lean in” and was even business lead to Sheryl Sandberg, the woman who started the Lean In movement. Leffler worked at Google and Facebook before attending Harvard Business School and working at SoFi, a San Francisco-based lending and wealth management company founded in 2011. Now the
Equities research analysts expect On Deck Capital Inc (NYSE:ONDK) to announce sales of $94.63 million for the current quarter, Zacks Investment Research reports. Four analysts have made estimates for On Deck Capital’s earnings, with the lowest sales estimate coming in at $83.41 million and the highest estimate coming in at $98.74 million. On Deck Capital reported sales of $83.67 million during the same quarter last year, which indicates a positive year over year growth rate of 13.1%. The firm is scheduled to report its next quarterly earnings results on Monday, November 5th.
On average, analysts expect that On Deck Capital will report full year sales of $373.98 million for the current year, with estimates ranging from $331.20 million to $385.61 million. For the next year, analysts forecast that the firm will post sales of $417.35 million per share, with estimates ranging from $361.41 million to $435.88 million. Zacks Investment Research’s sales averages are an average based on a survey of research analysts that that provide coverage for On Deck Capital.
As discussed in a recent piece in American Banker, Navient and Nelnet are increasing their role in the private student loan market. Both companies are big players in the market for servicing federally funded student loans. Together, they service $405 Bn with approximately 38% of the market share as of March 31, 2018. Nelnet, which currently focuses on servicing student loans, recently applied to for an industrial bank charter.
In April 2014, Navient was spun out of Sallie Mae, splitting the business in two. Sallie Mae continued its consumer banking business as well as origination of private student loans. Navient continued with loan management, servicing, and asset recovery. After the split, Navient kept 99% of the legacy company’s FFELP loans and 83% of the legacy company’s private loans. In October of last year, Navient acquired Earnest, a student, and personal loan lender, for $155 Mn in cash. The acquisition allowed Navient to begin originating student loans under the Earnest brand (as they were previously not allowed to make loans under any brand due to a non-compete with Sallie Mae). Starting in 2019, Navient will be allowed to compete directly with Sallie Mae under the Navient brand.
It was all thanks to a niche security asset that had exploded in popularity: collateralized debt obligations (CDO), which packaged individual loans, such as credit card debt and mortgages, into a secondary market product for investors. In just six years, from 2000 to 2006, the CDO market exploded with sales multiplying from $69B to $500B.
Lehman Brothers, the fourth largest investment bank in the US, invested heavily into these securities, and enjoyed incredible profits as a result. In 2007, Lehman reported net income of $4.2B on $19.3B revenue.
The majority of CDOs were comprised of subprime mortgages. Rated triple-B, at the bottom of investment-grade bonds, these mortgages had been distributed to borrowers with higher-than-average credit risk. Computer models had packaged these CDOs into “tranches” based on interest rate and risk, making CDOs incredibly opaque and complex. These models also assumed that the housing market would continue its upward trajectory.
Property Genius announces the launch of its proprietary, end-to-end research and marketing platform which harnesses big data to streamline the entire process of finding and investing in Off-market and Wholesale real estate. Built specifically with the real estate professional and investor in mind, Property Genius aims to solve a long-standing problem for the industry by organizing extensive amounts of assessor data from numerous sources into one convenient and customizable dashboard to improve investment opportunities. The company’s initial launch utilizes property data in Colorado – with more states soon to follow – helping investors find, purchase, and reap the rewards on opportunistic properties including foreclosures, absentee owners, and other distressed properties.
More than two years after his ouster from LendingClub, Renaud Laplanche still owns millions of dollars worth of stock in the company he created, even though he’s since started a rival online lender that’s rapidly growing.
For his second act in financial services, Laplanche is focused on avoiding past mistakes. He was forced to resign suddenly from LendingClub in May 2016 for a convoluted set of events involving the questionable sale of certain loans by the company and a lack of transparency with the board.
Laplanche started his new company, Upgrade, in August 2016, three months after leaving LendingClub. His start-up passed $100 million in monthly loan originations in April. By way of comparison, LendingClub, founded in 2006, averaged almost $1 billion in monthly originations in the second quarter.
One of the largest verticals in all of lending is equipment finance. There is $1.1 trillion worth of equipment financed each year and yet only a tiny fraction of this number is financed in an all digital process.
Our next guest on the Lend Academy Podcast has made it his mission to change that. Charles Anderson is the CEO and Co-Founder of Currency, the world’s first digital equipment finance platform. They are applying technology, often for the first time, to all phases of the equipment buying process.
CoreLogic (NYSE: CLGX) today announced AutomatIQBorrower, phase one of a comprehensive new underwriting solution designed to help lenders streamline their current mortgage workflows by digitizing, standardizing and automating borrower analysis and verification. By pulling all of the disparate borrower verification tools together into one integrated solution delivered from one provider, AutomatIQ Borrower will help lenders:
Reduce underwriting costs and time to close
Improve overall loan quality and user experience
Increase trust at each step of the borrower underwriting workflow
Hurricane Florence / Lendr (Lendr Email) Rated: B
“All of our clients have been contacted or we will continue to try and get in contact with them and support them in any way we can. We will suspend payments for the rest of September for any client that is affected by Hurricane Florence. Most clients will come back on a reduced payment schedule for a short period of time. In the past we have provided additional funding for clients in need to help get their business back on track due to these types of natural disasters.” – Tim Roach, CEO of Lendr.
Today, LendInvest, a peer-to-peer platform that connects property buyers in the UK with people willing to finance those purchases (bypassing traditional mortgage lending infrastructure in the process), announced that it has raised around $39.5 million (around £30.5 million) in a Series C round of funding led by existing investor Atomico, which participation also from GP Bullhound and Tiger Management (founded by hedge fund investor Julian Robertson).
The plan will be to use this funding to continue to develop its technology and grow business into more the traditional (and bigger) mortgage business. A spokesperson for the company says there are no plans to extend beyond the UK market for now.
LendInvest, the online platform, which matches investors and institutions with borrowers looking for property finance, today announced a “pre-IPO” funding round of $39.5 million.
Since launching in 2008, LendInvest has facilitated over $1.9 billion in loans to buy, build or renovate some 5,000 homes across the U.K., turning a profit consecutively over the last four years.
With fresh capital raised from existing backer Atomico, along with new investors GP Bullhound and Tiger Management, its management seems to be signaling that they’re finally ready to float the business.
ZOPA has boosted its lender returns in response to the recent Bank of England interest rate rise.
The peer-to-peer lender is now offering target returns of 4.5 per cent on its Core product and 5.2 per cent for its Plus account, both of which can be held in an Innovative Finance ISA (IFISA) wrapper.
Target returns were previously four per cent and 4.6 per cent respectively.
The Church of England is considering bringing together a group of interested parties to buy the £400m loan book of collapsed company Wonga.
Payday loan company Wonga entered administration at the end of August, with Grant Thornton appointed to conduct an “orderly wind down” of the business and sale of assets.
In response to this announcement, Labour MP Frank Field wrote to the Archbishop of Canterbury Justin Welby, urging him to build a consortium of “people of good will” to buy the loan book “in a way which protects poorer people”.
You are currently raising money. Who are you raising from and what do you plan to use the capital for?
Our investment is open to the public on the Seedrs equity crowdfunding platform. Investors across the EU can register and invest in the Orca business. The proceeds will allow us to expand our userbase, integrate with more lenders and to further develop the functionality of our platform.
Prior to launching the crowdfunding campaign, we secured a portion of this investment from two institutional funds based in Northern Ireland and a number of leading angel investors. It’s great to be combining these investors with crowd investors.
When the regulator comes knocking, companies had better be ready. So it is with the peer-to-peer lending sector which was recently the subject of a 156-page review on the part of the Financial Conduct Authority (FCA) which has proposed a new set of rules for the still formative P2P lending sector.
The issues being addressed by the FCA are as much a technology challenge as they are a regulatory one, particularly when the companies involved are very young and the technology they are utilising is quite new and innovative.
SCOTLAND looks set to become a peer-to-peer lending hotspot despite fears about the potential impact of Brexit and another independence referendum.
This year has seen lenders such as Assetz Capitaland The House Crowd expanding their presence in the country, while professional services firms Pinsent Masons and Deloitte have formed partnerships with Fintech Scotland to drive the financial technology sector’s growth. LendingCrowd already has its headquarters in Edinburgh, as does ShareIn, which provides a white label crowdfunding technology solution.
Online loans worth 116 billion yuan (16.97 billion US dollars) had been registered by the end of August on a unified platform operated by an industry association in China, amid a nationwide campaign to reduce financial risks.
The volume was up 18 percent from a month ago, the National Internet Finance Association (NIFA) has said.
The platform, established in June 2017 had recorded 94.31 million lending deals submitted by 66 online agents, which involved a total of 3.6 million borrowers.
China UnionPay is the biggest payment card issuer in the world and is now launching their cards in the UK, the move will challenge Visa and MasterCard and is the first step in a planned European expansion. The company has struggled to compete with Alipay and WeChat Pay in China
The Treasury Report on fintech released a few weeks ago talks about the promise of data sharing between big bank and technology. The author in the FT questions this enthusiasm, wondering if these tech companies can be trusted with financial data. The article points out that while the EU started allowing data sharing earlier this year it comes with several provisions to protect consumers.
The Qatar Investment Authority is in advanced talks about an investment in Lufax, China’s biggest online lender, as the sovereign wealth fund seeks to tap into the world’s second-largest economy, people familiar with the matter said.
QIA has been negotiating the potential purchase of a minority stake in Lufax, which is an arm of China’s Ping An Insurance (Group) Co., according to the people. It could spend about $500 million to $1 billion, the people said, asking not to be identified because the matter is private.
A deal could be announced as soon as the next few weeks, the people said. Shanghai-based Lufax, which became profitable for the first time last year, completed a fundraising in 2016 that valued it at $18.5 billion.
The IPO market is abuzz as usual, with many companies inching closer to public listing, while a few have backtracked from their plans. Let’s take a quick look at what you can expect in the coming days.
Cloud-based financial planning company Anaplan Inc. intends to raise up to $100 million through an IPO to meet the working capital and fund operations. The company has roped in former Tesla (TSLA) CAO David Morton as its CFO. It is currently working with an exchange to list the shares under the “PLAN” ticker. It was founded in 2006 as a cloud-based business planning and performance management platform based on a single hub.
Funding Circle Holdings is inching closer to a public listing as the company plans to raise gross proceeds of about 300 million pounds. Shares will be listed on the London Stock Exchange. Funding Circle is a small and medium enterprise loans platform with operations in the UK, US, Germany, and the Netherlands.
The corporate regulator wants all online business lenders to remove unfair terms from their contracts just like Prospa has done, indicating start-ups that want to compete against banks will be held to similar regulatory standards as community expectations lift following the royal commission.
In a letter sent last week to Brad Kitschke, CEO of industry lobby group FinTech Australia, the Australian Securities and Investments Commission declared “action [is] required”.
One of these owners is Mel Flannagan, owner of software and design company Nook Studios. Flannagan’s work is project based and primarily with government departments, so cash flow needs to be managed carefully.
“Sometimes contracts just take a little bit of time to come through,” Flannagan says. But while Nook Studios is a unique business, she says their cash-flow situation is quite common, with the cyclical nature of waiting for invoices to be paid just being “the nature of having a small business”.
To ensure she had the funds to keep her business going, Flannagan didn’t even consider a traditional business loan because she knew she wouldn’t qualify.
“I suspect going international is a nice thing on PowerPoint, but the actual execution of that is very difficult,” Grab president Ming Maa said in a fireside chat at DEALSTREETASIA‘s Asia PE-VC Summit 2018 last week.
Drawing parallels with Meituan-Dianping’s tumultuous ride-sharing journey, Maa said, “We saw that Meituan spent somewhere around $500 million in two different cities in China. In that process, they spent a tremendous amount of capital on subsidies. What that tells me is – for a company to spend so much on subsidies means there are natural barriers to entry for this business.”
KinerjaPay Corp., (OTCQB: KPAY), a digital payment and e-commerce platform, announced on the launch of its new peer-to-peer (P2P) lending platform, KFUND. According to Kinerjapay, PT. Kinerja Simpan Pinjam has been officially registered and will manage KFUND brand as an online lender that focuses on micro-lending activities.
Kinerjapay reported that KFUND will mainly target consumer sectors to provide micro-lending facilities in the range of $100 to $1,000 on biweekly or monthly term loans.
The hugely successful events in our Finnovation Africa Series in Uganda, Ethiopia, Kenya and South Africa saw more than 800 thought leaders, FinTech pioneers and bankers representing the foremost financial institutions from across the continent gather to address how FinTech can contribute to the positive and profitable transformation of financial services in Africa. From banking powerhouses to start-up FinTech disruptors, Finnovation World sets the stage for the positive and profitable transformation of financial services –and Ethico Live! is now excited to announce the expansion of the conversation to Finnovation Ethiopia 2018for the 2nd year at the Radisson Blu Addis Ababa on the 1st of November 2018. The event will seek to harness the FinTech revolution to boost strategic economic priorities such as financial inclusion and deepening – and how FinTech can make a positive and profitable difference in Africa.
With a focus on the most significant technologies driving the financial services paradigm shift, including Blockchain & Cryptocurrencies, Open Banking & APIs, Payments innovation and Mobile Money, Finnovation Africa: Ethiopia 2018 also features a number of innovative sessions such as The Wolves’ Den, Sheba Valley: Harnessing Ethiopia’s FinTech boom, Inside the Investor’s Mind,and live-on-stage interviews with international Finnovators and African FinTech pioneers.
News Comments Today’s main news: LendingTree to acquire Student Loan Hero. SoFi to go after brokerage business. British Business Bank talking about backing Funding Circle loans. Funding Circle slashes US exposure. Duanrong raises $45M. Today’s main analysis: Deep dive on inflation. Today’s thought-provoking articles: New LendingClub account performance. New York state’s recommendations for online lending. Is there subprime auto loan bubble […]
LendingTree, Inc. (NASDAQ: TREE) announced today that it has entered into a definitive agreement to acquire Student Loan Hero, Inc., a personal finance website dedicated to helping student loan borrowers manage their student debt. Student Loan Hero offers current and former students in-depth financial comparison tools, educational resources, and unbiased, personalized advice.
Consumer credit increased by $26.4 Bn in May, the largest monthly jump in 6 months, to an all-time high of $3.9 Tn. Growth was driven by a $9.8 Bn increase in revolving credit card debt. Credit growth has been averaging 7.6% fueling consumer spend-driven GDP growth. The Fed’s latest G-19 report can be found here.
Rising US Inflation
US CPI rose by 2.9% YoY, its highest reading since March 2012. This week we look at various inflation measures and how they stack up against the Fed’s 2% inflation target.
The current status of my LendingClub account is very typical for new investors. A handful of loans have been paid in full while just a couple have entered either grace period or the late 31-120 days stage. A majority of the loans are issued and current.
Below is a screenshot of my target allocation shortly after account setup with about half of my capital allocated to LendingClub notes.
Below is a screenshot as of today with all $5,000 invested which now closely resembles my target allocation.
The New York State Department of Financial Services (DFS) released a report on Wednesday on the subject of online lending in the state. The report was mandated by a billsigned by New York Governor Andrew Cuomo on June 1 of last year.
Online lenders are assailed by fraudsters on all fronts. There were 1579 data breaches in the U.S. in 2017, 302 of which resulted in the exposure of full credit and debit card numbers. Because online finance frees up applicants from having to show up physically to a bank, it also opens up opportunities for identity fraud. This really is the other side of phishing and identity hacks. Once data ends up in the hands of criminals, the next step is to monetize it by taking out fraudulent loans.
Kabbage claims that 95 percent of its customers have a fully-automated underwriting experience. “By getting customers to connect their Amazon, Square, eBay, and business bank accounts, Kabbage gets a direct view into the finances of a small business borrower,” said Yaakov Erlichman, vice president of fraud and underwriting strategy at Kabbage. “We have more than two million live data connections. It’s really hard to fake live business data.”
One month after bringing its loan origination platform to $5.6-billion North Carolina-based First Bank, Baker Hill is back in the news. The fintech is teaming up with West Texas State Bank (WTSB) to support efficient loan growth with its NextGen Loan Origination for Commercial and Consumer Lending platform. The technology, in the words of West Texas State Bank Chief Lending Officer and COO Les Robbins, will help the bank “streamline the origination process with … roles-based, intuitive lending solutions.”
Cryptocurrency platform Uphold has partnered with crypto lending platform Libra Credit to offer its users access to a variety of Libra Credit products.
Founded by former PayPal financial technology veterans, Libra Credit is an ethereum-based lending network that facilitates open access to credit anywhere and anytime. Libra Credit offers a seamless digital lending process that can be completed in five steps: application, verification and credit assessment, confirmation, collateral deposit, and disbursement. The platform focuses on a dual-credit risk scoring mechanism that considers the creditworthiness of the pledged collateral as well as the credit information of the borrower. Borrowers will be able to pledge any crypto-assets as collateral and receive loans in their desired asset.
Crowdfunded real estate investments account for $2.5 billion of the $7 trillion commercial real estate market, according to CFX Markets. There’s major growth potential in the industry as more investors lock in on the benefits of investing in real estate through crowdfunding platforms.
FUNDING Circle’s listed investment trust is in talks with the British Business Bank (BBB) about providing further funding through the peer-to-peer platform.
It comes as the Funding Circle SME Income Fund (FCIF) reported its net asset value (NAV) had increased from £308m to £165m in the year to March 2018, while its NAV total return was 14.9 per cent.
FCIF highlighted a structured finance transaction with Citibank to fund loans through the Funding Circle platform as one of its major deals last year, and also revealed it was in talks with the BBB about providing up to £150m of funding.
Funding Circle SME Income (FCIF) will reduce exposure to US loans after the increased cost of hedging the dollar saw the listed peer-to-peer fund cut its dividend.
Last month, the alternative lender to small businesses said it would cut its annual dividend of 6.5p per share to between 5p and 6p, after a ‘material increase’ in the cost of removing the impact of changes in the value of the dollar on its portfolio.
However, a ‘partial reallocation of capital deployment away from the US and towards the UK and continental Europe’ will see North American loans fall by up to 10% from 25% of the £329 million portfolio.
Lending Works has received £2.8 million in funding in a round led by Maven Capital Partners, with £800,000 of backing from Pollen Street Capital and NVM Private Equity. The UK peer to peer lender said proceeds will be used to fuel growth including loan customer acquisition via other channels.
Founded in 2014, Lending Works has originated approximately £115 million in loans with £32 million (27%) in the first half of 2018. – 27% of which (£32 million) was distributed in the first half of 2018 alone. Lending Works expects to originate £100 million in loans during 2018. The P2P lender is also a member of the UK Peer to Peer Finance Association (P2PFA) – the association that represents leading P2P platforms.
Slowing car sales and tightening credit look like a toxic combination for China’s auto-financing industry, which has exploded in the past few years. Concerns the sector is heading for a subprime-like meltdown may be overblown, though.
Sales in the world’s largest car market rose 2.3 percent in June from a year earlier, data showed last week. While faster than several analysts expected, growth decelerated from an 8 percent pace in May. Compared with the previous month, deliveries fell about 1 percent in June.
The cooling coincides with Beijing’s quest to deleverage the financial system, which has led to tighter liquidity, reduced access to credit and, in theory, squeezed consumer discretionary spending. In a report last week, analysts at Sanford C. Bernstein linked the weakness in car sales to a slowdown in peer-to-peer lending, pointing to “the deflation of what amounts to a subprime (P2P) auto bubble.”
Toutiao Marches into the Fintech Market with Cash Loan Products
China’s leading digital media platform Toutiao has long denied the potential of entering the financial markets. However, it is reported this week that a series of cash loan products have launched on Toutiao’s app without too much marketing.
The product Fangxinjie (literally meaning reliable lending) was listed within Toutiao’s digital wallet with credit up to￥200,000 yuan and daily interest low to 0.03%.
Fintech Startup xyb100 Secures ¥200 Million B Round Funding led by Japanese Financial Institution Credit Saison
This week, fintech startup xyb100 announced that it had secured ￥200 million B round funding by famous Japanese financial institution Credit Saison.
Fundvisory, the Paris-based startup that offers a white-label robo-advisory solution has raised 1.8 million euros from Aviva France and Macif.
Founded in 2015, Fundvisory provides automated and modular robo-advisory tools such as portfolio monitoring, risk profiling and compliance to help financial institutions digitize their financial advisory services. Led by Nicolas Gonzalez and Romain Deguest, the startup previously raised 300,000 euros from friends and family, and is currently a team of 10 according to LinkedIn.
According to a recent Morgan Stanley report, Indian P2P lending industry is estimated to cross the $4 billion mark by 2021. Owing top such pleasing industry forecast, along with the additional support schemes & initiatives from the Government, the fintech players in India have garnered a lot of momentum. In this light, Cashkumar, one of India’s leading P2P lending companies, announced that it has been granted the NBFC-P2P license from RBI (Reserve Bank of India). With this, Cashkumar joins the list of the very few fintech firms who hold the NBFC-P2P accreditation. Post this, the company focuses on providing loans between 20,000-100,000 with tenures of 3-12 months and offering only to salaried individuals.
Paidy, a fintech startup that enables Japanese consumers to shop online without using a credit card, announced today that it has raised a $55 million Series C. The round was led by Japanese trade conglomerate Itochu Corporation, with participation from Goldman Sachs.
The Tokyo-based startup says this brings its total funding so far to $80 million, including a $15 million Series B announced two years ago. One notable fact about Paidy’s funding is that it’s raised a sizable amount for Japanese startup, especially one with non-Japanese founders (its CEO and co-founder is Canadian and Goldman Sachs alum Russell Cummer, left in the photo above with CTO and co-founder Lee Smith).
In the case of Smart Crowd, the platform enables fractional ownership of real estate. Investors can purchase a stake in a rental property for as little as Dh5,000 ($1,300), ‘co-owning’ the asset along with tens, hundreds (or thousands, depending on the size and value of the unit) of other people.
They can hold their stake for as long as they wish, collecting the rent from it, or sell it and use the proceeds to invest in something else listed on the platform. Or they can use accumulated returns to buy a property on their own.
Smart Crowd is licensed by the Dubai Financial Services Authority, the regulator of Dubai International Financial Centre, Dubai’s financial free zone, to provide crowdfunding services for real estate. It won regulatory approval in January, obtained an operating licence in April, and in June completed its first transaction – the acquisition of a Dh365,000 studio in Remraam generating a gross annual yield of 10.8 per cent (approximately 8.6 per cent with fees), the founders say.
Businesses in Dubai are not sparing any efforts to tap possible avenues to boost sales and growth, and the latest trend is that firms specialising in big data are unlocking opportunities to study customer preferences, loyalties and any segment that will help boost customer numbers.
Big data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important: it’s what organisations do with the data that matters. Big data can be analysed for insights that lead to better decisions and strategic business moves, according to the definition given by SAS Institute.
News Comments Today’s main news: Prime Meridian announces new opportunities fund. TransUnion launches startup credit kit. SoFi hires Goldman head of mortgage securitization as CFO. Upgrade intros new personal credit line. The Axiom Group ready to invest $50M into charge-off portfolios. S. Korean P2P loans increase 10.3% in March. Today’s main analysis: The highs and lows of Bank Negara’s 2017 […]
Upgrade launches personal credit line. AT: “More significant perhaps is the $100M in loan originations per month the new Laplanche company is doing. However, the hybrid personal loan-credit card product is a unique line of credit offering that could boost that business volume.”
Prime Meridian Capital Management (PMCM) a Registered Investment Advisor (RIA) specializing in marketplace lending strategies across three alternative credit verticals in four funds, today introduced the Special Opportunities Fund.
The new fund, due to launch in the second quarter 2018, will invest in multiple high yielding alternative credit verticals including litigation finance, life settlements, targeted high yielding, niche real estate, small business, and consumer loans.
To meet the needs of startups and their investors, TransUnion (NYSE:TRU) today launched the Startup Credit Kit at LendIt Fintech USA 2018, giving new companies faster access to cutting-edge alternative and trended credit and fraud prevention data.
With TransUnion’s Startup Credit Kit, new businesses can more quickly gain access to depersonalized consumer credit data to better explore the market for untapped opportunities. It also helps new businesses determine the viability of their products by analyzing real-world depersonalized consumer credit data. This allows startups to focus their resources on high-potential market segments and product opportunities while allowing them to prove their concept to raise funding in the early stages of the startup lifecycle.
Online lending startup Upgrade, led by cofounder and CEO Renaud Laplanche, announced that it’s now initiating $100 million in personal loans a month, with an average loan size of about $10,000. The one-year-old company has reached $60 million in annualized revenue, Laplanche says, and by the end of 2018, he expects to hit a $100 million revenue run-rate and become profitable.
Upgrade also announced a new product called Personal Credit Line, a hybrid of a personal loan and credit card. Consumers can get approved for up to $50,000 in credit, and they can draw down on the line as needed, paying interest only on what they’ve borrowed. The credit line has a fixed length of 12 to 60 months and a fixed interest rate, and it forces consumers to pay part of the loan principal every month.
The first online lending firm Renaud Laplanche founded, LendingClub, targeted consumers with hefty credit card balances, offering them the opportunity to refinance at a lower interest rate.
In his latest venture, Laplanche hopes to lure customers before they rack up big credit card bills. Upgrade, the San Francisco-based online lender that he founded in August 2016, is rolling out a new product that is designed for folks who are anticipating big expenses but are not sure exactly how much they will need to spend or when.
The Axiom Group announced today at LendIt Fintech USA that it has obtained $50M in capital to finance the purchase of charge off portfolios with a focus on consumer loans and credit cards, specifically in the FinTech lending space.
This increase in capital will allow The Axiom Group to pursue large portfolios and monetize those portfolios immediately for the lender/seller partners. By selling bad debt portfolios, FinTech companies can utilize the income for further lending, as well as reduce their risk associated with the challenges of collecting on charged off accounts.
Some 13 months later LendingClub, which Sanborn has run since a mis-selling scandal cost predecessor Renaud Laplanche his job in 2016, remains just a lender. Its stock has lost around a third of its value in the past year.
On Deck’s shares are effectively flat over the same period. But boss Noah Breslow had to slash costs last year after credit losses. He now plans to boost revenue by expanding into portfolio management and loss mitigation, and finding more bank partnerships.
Privately held Social Finance has done the most to diversify, adding consumer and mortgage loans as well wealth management to student-loan refinancing.
SoFi is now the biggest player. It extended $12 billion of new loans last year, 50 percent more than erstwhile leader LendingClub, and its adjusted EBITDA is two-thirds higher at $126 million, according to the Wall Street Journal. Yet each pales in comparison to JPMorgan’s retail unit, which lends around 10 times as much and enjoys lower funding costs thanks to customer deposits.
Marlette Funding, LLC, the owner of consumer lending platform Best Egg, announced on Monday the year-end results and key accomplishments for first quarter 2017. According to Marlette Funding, during the past year, Best Egg experienced origination growth of 66%, significantly reduced its customer acquisition costs, and ended 2017 with three straight quarters of net income positive on a GAAP basis. Best Egg has reportedly exceeded $5 billion of prime loans and celebrated its fourth birthday.
Launched in 2014, Marlette Funding, through its consumer brand Best Egg, describes itself as a financial technology provider on a mission to find better ways to make money accessible to allow people to “enjoy life.”
Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it will release its first quarter 2018 financial results after the market closes on Monday, April 30, 2018. Ken Rees, Chief Executive Officer, and Chris Lutes, Chief Financial Officer, will also host a conference call on the day of the release (April 30, 2018) at 5:00 pm ET to discuss Elevate’s financial results.
While blockchain doesn’t offer a perfect remedy to the problems afflicting the industry, it does provide a model that minimizes some of them. The first major improvement the technology brings is transparency. Blockchain’s distributed ledger technology (DLT) provides two major upgrades to the current model—it decentralizes the storage of information, and it makes all transactions immediately available across all nodes of the chain. The first upgrade means that companies and lenders can no longer manipulate information or engage in shadowy practices with data, as it is shared across an entire network and not under their exclusive supervision.
Nav, a free platform that helps small business owners build, protect and leverage their financial data, announced the launch of Business Banking Health Check, a feature to help small business owners make more informed decisions on their cash flow. Nav is the only place entrepreneurs can access their personal and business credit scores, along with cash flow insights to provide greater transparency into how lenders view their
creditworthiness and enable greater access to capital.
According to Pepperdine’s Capital Markets Report, insufficient credit profiles and cash flow are two of the primary reasons banks reject business loan applications. Nav’s platform uses these data sets to help business owners manage their fundability, while also doing legwork for lenders by matching its small business customers to their most-qualified funding options.
Lendio announced today at LendIt Fintech USA that it has facilitated nearly $60 million in loans through its lender turndown program.
Lendio’s lender turndown program allows lending partners to offer a marketplace of loan options to customers that do not fit the lender’s credit box; this allows lenders to turn a decline response into a potential loan offer for the small business owner.
Lendr Online, LLC. announced today at LendIt Fintech USA that it is has launched a new business debit card product to service its growing client base. The ability to fund business owners in real-time via an instant access virtual Mastercard followed up with a traditional plastic card utilizing the latest in EMV chip security, will further enhance its brand and solidify Lendr’s position as a premier financial services firm.
Ocrolus, a New York City-based provider of solutions to analyze financial documents, raised $4m in Series A funding.
The round was led by Bullpen Capital with participation from QED Investors, Laconia Capital Group, ValueStream Ventures, RiverPark Ventures, Sam Hodges (co-founder, Funding Circle), Vince Passione (CEO, LendKey), Ram Ahluwalia (CEO, PeerIQ), Bill King (former head of securitization, JP Morgan), Hugh Nguyen (CEO, ClearServe) and Tanya Barnes (managing director, Golden Seeds), among others. In conjunction with the funding, David Arcara of Laconia Capital Group and Nick Adams of Differential Ventures will be joining Ocrolus as board members. Paul Martino of Bullpen Capital, Amias Gerety of QED Investors and Karl Antle of ValueStream Ventures will be board observers.
Nelnet (NYSE: NNI) is bringing a new servicing option to Fintech lending platforms. Nelnet Loan Servicing will leverage the experience, scale, and personnel of its existing servicing business with technology enhancements to meet the unique needs of Fintech companies with primary and backup servicing.
U.S. investment firm General Atlantic is in talks to buy a minority stake in closely held Brazilian online lending startup Geru Tecnologia e Serviços SA, according to two sources with knowledge of the matter.
Other investors may join General Atlantic, the sources said, adding that Geru’s partners have spent the last few weeks visiting funds in San Francisco and New York to raise about $50 million.
IDValidation will be showcasing their governmental verification solutions to the lending community and Stops 100% of Synthetic Identity Theft.
IDValidation’s Consent Based SSN Verification Allows Financial Institutions Direct Access to the Main Frame Database of the Social Security Administration to Accurately Verify the Validity of a Social Security Number and Stop Synthetic Identity Theft. Toyota Financial Services has conducted a successful pilot. IDValidation has become the forerunner in providing this vital tool to the Financial World helping mitigate
Fraud & ID Theft.
Bringing a new layer of convenience to financial transactions with its customers, LendingPoint, the company working to revolutionize access to consumer credit, announced today it has entered into an agreement with TabaPay that will integrate debit cards into LendingPoint’s financing platform.
Beginning immediately, LendingPoint will allow borrowers to use debit cards for loan payments they make online or over the phone. LendingPoint will be able to verify account ownership and balance of its applicants through the TabaPay platform. Then later this year, LendingPoint will also be able to instantly disburse loans to approved borrower accounts through their debit cards, 24/7/365, or credit card payoffs. Those inbound and outbound debit-card disbursements and collections will happen instantaneously and are free for the borrower.
Silicon Valley-based FinTech Social Enterprise Harvesting Inc, launches its innovative credit scoring system for financial institutions to assess farmers creditworthiness and facilitate agriculture financing .
Harvesting’s Credit Risk System is an Artificial Intelligence (AI) powered platform which leverages on traditional & alternative data sets and allows financial institutions to build, deploy and monitor credit business in the cloud, within a fraction of time & resources it takes today. It’s easy to use interface with advanced feature engineering flexibility allows credit risk manager to create best of the breed custom credit risk model for the organization on a cloud infrastructure. It allows credit risk manager of any size of financial institutions to leverage the power of AI and increase acceptance rate and reduce defaults.
Global Kinetic announced today at LendIt Fintech USA, that it will be integrating Entersekt’s Connekt functionality into the FutureBank platform. FutureBank’s unique ability to abstract the complexities in legacy core banking systems and customize digital channels through its technology platform helps banks and disruptive FinTech companies work together more efficiently. The growing digital banking market in the US has become vulnerable as consumers are frustrated by poorly designed mobile apps that often have weak security implementations and limited payment functionality. The FutureBank platform can now offer converged payment acceptance through Connekt.
PENSCO Trust Company (“PENSCO”) announced today at LendIt Fintech USA, the launch of Custodian Connect, an API-driven capability that seamlessly connects investment platforms to PENSCO enabling uninterrupted opening and funding of an IRA from within the platform.
Spring Labs, which is building the Spring Network, a blockchain-based network being designed to allow lenders, banks, and data providers to securely and efficiently exchange data with one another, today announced its founding industry advisory board. The industry advisory board comprises a group of industry leaders in finance, credit, and compliance, with members including Sheila Bair, the former Chair of the U.S. Federal Deposit Insurance Corporation (FDIC); and Nigel Morris, Co-Founder and former long-time President of Capital One, and co-founder of QED Investors, a leading investor in global financial technology companies.
This news of the industry advisory board comes on the heels of Spring Labs announcing a $14.75 million seed fundraising round, one of the largest initial venture rounds to-date for a blockchain startup.
Alternative Investment fund administrator MG Stover & Co. (MG Stover) announced today a partnership with software technology firm CoinVantage as part of its strategy to grow its digital asset fund administration business and deliver world class solutions to its clients.
As Cross River Bank approaches its 10th anniversary, the leader in the emerging FinTech market is demonstrating a surge in growth and surpassing significant milestones as it grows its customer base, offerings and strategic partnerships designed to revolutionize the banking infrastructure.
In its monthly market commentary, VPC said that the fall in revenue was due to a combination of factors including a “one-time fee earned in January and a shorter day count”. Capital losses were attributed to VPC’s exposure to Elevate Credit – a US-based provider of short-term loans, and securitisation residuals.
In 2017, Suretly token-holders were inspired by the idea of a crowdvouching platform – an international exchange for micro-guarantees, where people can make money by helping others borrow. In the beginning of 2018, the project made something that many other ICOs were not able to deliver: the demo version of its product. To become a guarantor (or a ‘voucher’, in the crowdvouching terminology), an individual needs to download the Suretly mobile application, where he can find borrowers’ loan orders, vouch, and get receive a sum of money in return (a fee).
On April 9, Suretly releases the first version of the new app, available to all users registered for its testing period. The borrowers’ behavior is based on the real data of past periods, and, therefore, users can learn different vouching strategies and practice them in future.
Unlike p2p lending, Suretly does not lend money directly, but rather serves as an intermediary between financial institutions, borrowers, and co-signers. Suretly users vouch for a small part of a loan sum and guarantee that the loan will be repaid in the case of a borrower’s default. Liability for each loan is divided among all vouchers and each voucher’s approval serves as an insurance of the loan. In order for the loan to be approved, the entire amount must be guaranteed by the vouchers.
RCN announced today at LendIt Fintech USA that it will showcase how global lending through peer-to-peer technology is possible using blockchain technology and cosigned smart contracts.
With billions of people all over the world excluded from traditional banking & financial services, Sebastian Serrano (CEO), will explain the company’s successful history in Latin America since it was funded and how RCN can contribute to the world’s economy by providing credit and financial inclusion through blockchain technology and cosigned smart contracts.
Technologies such as blockchain underpin the fintech revolution, paving the way for a whole groundswell of new start-ups that have targeted markets underserved by banks through better user interfaces and user experience (UX) as well as through digital marketing and branding.
A case in point is Revolut, a London-headquartered start-up with offices in Dublin. It turns out that cash-savvy young workers have no time for bank fees and are less forgiving of banks than older generations, and are flocking to these challenger banks.
Examples include: Zurich’s Advanon, an online platform for invoice financing for SMEs; Dublin’s CurrencyFair, which allows individuals and businesses to send funds to bank accounts worldwide; Stockholm’s Klarna, which provides online payments for e-commerce sites; and London’s Monzo, a start-up bank that has amassed more than 20,000 current-account holders and more than 500,000 people using its distinctive ‘hot coral’ cards.
Creditas, the leading digital lending platform for secured loans in Latin America, has published the updated report “The disruptors paradise: Understanding the Brazilian lending space” at the Lendit USA 2018 conference.
With roughly US$ 150 billion in net interest margin, Brazilian consumer debt represents a unique opportunity to significantly increase debt availability and reduce the 30%+ banking spread. The report summarizes the reasons behind the high spread of the Brazilian ecosystem and the evolution during the last decade.
Nova Credit announced today at LendIt Fintech USA that it partnered with Transunion to serve creditworthy newcomers to Canada who may otherwise miss out on credit opportunities due to a lack of Canadian credit history.
The new product—TransUnion Global Credit Connect powered by Nova Credit—provides newcomers to Canada with a platform to import their historical credit information and have their international credit reports delivered to end-users such as banks, in a streamlined, standardized format. The foreign credit score is mapped to a Canadian equivalent score so that it can be consistently applied.
The Mohammed bin Rashid Fund (MBRF) for SME – the financial arm of Dubai SME, itself an affiliate of Dubai’s Department of Economic Development (DED) – has expanded the partnership agreement with Beehive, the MENA region’s first regulated peer-to-peer lending platform, which will cross the $50 million mark of total funding for SMEs across the platform this month.
Following a successful initial launch, MBRF and Beehive have broadened the scope of the agreement to increase the credit guarantee to AED750k and also offer Sharia Compliant Invoice Finance, a short-term finance option for businesses wishing to improve cash flow.
The combined loans of peer-to-peer (P2P) lenders in South Korea reached almost 2.3 trillion won ($2.1 billion) last month amid burgeoning demand for the debt financing service that allows individuals to borrow or lend money online without going through an official financial institution.
According to Korea P2P Finance Association on Monday, the accumulated loans of its 65 members reached 2.296 trillion won as of end of March, up 213.6 billion won or 10.26 percent from a month ago. By sector, total loans on real estate project financing reached 768.5 billion won, real estate mortgage 611.5 billion won, and other mortgages 472.4 billion won, and credit loans 443.2 billion won. The members’ average loan interest rate was 14.32 percent.
THERE is a chance the economy will grow as much as 6% this year, according to Bank Negara Malaysia’s 2017 annual report, which was released on March 28. Not only is that ahead of 2017’s stronger-than-expected 5.9% gross domestic product growth, the central bank’s baseline projection of 5.5% growth for this year is at the higher end of the official 5% to 5.5% projected in the Economic Report 2017/2018, which was released just five months ago.
In fact, working numbers in the annual report indicate 5.67% growth for 2018 — exceeding the government’s projection last October, although just short of 2017’s spectacular 5.9% reading.
While last year’s growth beat everyone’s expectations (including the central bank’s working number of 4.57%), it is worth noting that 2016’s actual GDP growth of 4.2% was very close to the central bank’s working number of 4.1% when official projections were between 4% and 5%.
News Comments Today’s main news: Prosper broadens its capital stack. MarketInvoice nabs 135M GBP from two European banks. Klarna hit by fraudsters. Square intros instant deposits in the UK. Hong Kong-China commuters now have a dual-currency prepaid credit card. Today’s main analysis: PeerIQ’s lending earnings insights. How 6 digital banking startups are challenging the retail banks (A MUST-READ). Today’s thought-provoking […]
Prosper broadens deep capital stack with ABS. AT: “Securitization has been a great way for the leading alt lending companies to stretch themselves and take the sector to new horizons. It’s good to keep innovating and developing the business model, especially as firms move beyond the startup phase into the growth phase and beyond.”
Amazon vs. Costco, PeerIQ’s lending earnings report. AT: Everyone likes to talk about Amazon moving into the lending space, but what about Costco and other retailers? But the real analysis here is the preview of PeerIQ’s lending earnings report, due to publish in a couple of days.”
This year, Prosper broadened its capital stack for the first time, including a ‘D’ class of bonds on its $647.5m offering, which was priced on Wednesday. Credit Suisse and Jefferies led the deal, with the $387.8m ‘A’ notes pricing at 70bp over euro dollar spot forwards. The $112m ‘B’ notes were priced at 125bp over EDSF, while the $79.45m ‘C’ notes were priced at 220bp over interpolated swaps. The $68.25m ‘D’ notes were priced at 300bp over IS.
In contrast to last year, Prosper also strenghtened the collateral mix on its 2018 offering. According to a presale from Kroll Bond Rating Agency, loans from Prosper’s higher quality credit tiers made up 54% of the deal, compared to 38% on its November 2017 transaction. The proportion of lower quality credit tiers also fell to 46% in this deal, compared to 62% on its last deal.
Fintech has been playing an increasing role in shaping financial and banking landscapes. In this paper, we use account-level data from LendingClub and Y-14M data reported by U.S. banks with assets over $50 billion to examine whether the fintech lending platform could expand credit access to consumers. We find that LendingClub’s consumer lending activities have penetrated areas that may be underserved by traditional banks, such as in highly concentrated markets and in areas that have fewer bank branches per capita. We also find that the portion of LendingClub loans increases in areas where the local economy is not performing well.
TransUnion (2017) reported that, as of 2017:Q3, the personal unsecured loan market had reached nearly $112 billion.
Credit cards account for the lion’s share of unsecuredconsumer debt ($731 billion in 2017:Q3).3 Interestingly, there is evidence that credit card lending is related to geographic location. Carbo-Valverde and Perez-Saiz (2016) find that the probability of obtaining a credit card or line of credit from a bank increases 60 percent when the bank has a branch within 10 km of the household.
Where are we in the credit cycle? Earnings calls indicate CEOs/CFOs are constructive on the health of the US consumer and see a tax reform as improving consumers’ disposable income.
Credit re-normalization continues across all major lending groups. Credit performance this quarter is mixed. We observe improvements, and record low delinquencies from ONDK, OMF, and FinTechs in particular. LendingClub expects 31 bps lower charge-offs going forward due to tighter credit standards. At Discover – a bellwether for personal loan performance – the net charge off rate jumped 92 bps YOY to 3.62% – the largest increase in several years.
Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions 33% although loan growth was only 14%.
Banks have started to implement behavioral biometrics more and more as it is seamless for customers and helps to better detect fraud; behavioral biometrics firms like BioCatch has provided banks with the type of security they like, customers cannot see if but it also is harder for criminals to spoof; BioCatch reviews more than 5 billion transactions per month and has about 60 million users in their system; another reason banks love this type of security is the privacy regulations are not as strict, the data is not personally identifiable and is based on type of actions.
That’s because 38% of college-educated adults think an emergency fund of $5,000 or less is sufficient. That’s the latest from online lender Laurel Road, which also found that women — particularly younger ones — are generally more conservative when it comes to building their safety nets. Specifically, millennial women think people should have an average of $9,727 in an emergency fund, compared to millennial men who think an average of $8,040 works just fine.
The majority of working U.S. adults are nowhere close to having three months’ worth of living expenses in the bank. A good 57% have less than $1,000 in savings, according to data released by GOBankingRates last year, while 39% have no savings at all. If you’re part of either statistic, it means your finances aren’t in great shape — and that you need to make changes immediately.
Lendr, a provider of flexible working capital to small- and medium-sized businesses, specializing in business finance and factoring solutions, announced today the closing of a $25 millionsenior credit facility. MidCap Financial Trust served as the Administrative Agent for the transaction. The deal agreement provides Lendr with increased financing power and the expansion of the facility to $50 million.
First RealFund (“FRF”) has raised $600,000 of preferred equity financing for an apartment building undergoing a renovation and upgrade in Brooklyn’s Clinton Hill neighborhood.
The Sponsor, Duke Properties, owns a portfolio totaling more than 400 rental units with a geographic focus centered around New York City. “We target value-add properties in emerging neighborhoods and we apply innovative and effective renovation strategies based on our 15+ years of experience,” observed Albert Dweck, CEO of Duke Properties. “Our goal is to increase the value of our buildings while contributing to each neighborhood.”
According to a 2015 survey by the Federal Deposit Insurance Corporation, approximately 7 percent of American households are unbanked (meaning they have no checking or savings account), and an additional 19.9 percent are “underbanked.” The percentages are higher—approximately 50 percent—among both low-income and minority households.
While approximately 22 percent of adults in high-poverty African-American communities have used online banking services in the past year, a significantly higher percentage (39 percent) of adults in wealthier black communities have used the technology.
AxiomGo is a paperless checking account for customers who want an alternative to prepaid cards and traditional checking, the bank said.
The $560 million-asset Axiom partnered with the fintech firm Malauzai to design and deploy a mobile app that “meets the unique needs of a traditionally underbanked community, providing users a dynamic, bilingual, mobile banking experience,” it said Thursday.
The app, which had a soft launch in December, has a Spanish-language option and enables users to open and fund an account and set up direct deposit via a mobile device. Other features include the ability to pay bills by snapping a photo; check deposit; fund transfer and peer-to-peer payments; and access to built-in budgeting and personal finance management tools.
Whether they were unable to secure credit because of bad (or nonexistent) credit history, sluggish cash flow or a lack of collateral, these growth-oriented businesses often find they’re not considered a good fit for traditional loans or lines of credit. There are, however, unexpected outlets available to them. I wish they’d been available to me when I started out 20 years ago.
The short answer: Some student loan borrowers will pay more interest.
Most student loan borrowers depend on federal student loans, which have had a fixed interest rate since 2006. Although 1.4 million people yearly also depend on private student loans, which can have either a fixed rate or a variable rate that’s connected to either the LIBOR, prime or T-bill rates.
When the Fed increases these variable rates, borrowers with variable-rate loans will likely pay more interest. However, it will depend on the benchmark, according to CNBC.
Agora Data, Inc. (“AGORA”), a Texas-based provider of technology solutions for the financial services industry, announces its partnership with industry leader Ignite Consulting Partners (“Ignite”) to provide increased transparency and security to the consumer finance marketplace through the development of a “Certified Seller Program.”
Factury Inc., the company behind FIC Network, today announced a strategic partnership with Civic Technologies Inc. The partnership brings trusted, secure identity services to the token sales participants identification and enables FIC Network to streamline the identification and KYC process, enhancing the token sales privacy and security.
Square Co-Founder and CEO Jack Dorsey announced the launch of a new Instant Deposit service for UK businesses at an event at London’s British Library last night.
The new product helps to solve one of the biggest challenges small businesses face: managing cash flow.
With the launch of Instant Deposit, sellers can now click a button in the Square App to get their funds into their bank account in around 20 minutes. All they need to do is link their bank account to their Square account. Square offers competitive, flat fees of 1.75% fee when taking in-person payments, and 2.5% for payments made over the phone, online or via digital invoice. Sellers using Instant Deposit will be charged an additional 1%.
These peer-to-peer investments broad- ly fall into three sectors: Consumer, SME and Property Lending.
There are two ways to invest in an IFISA. Customers can either invest manually or defer to the platform’s auto- invest function and let this do the hard work. Notably the ‘big three’ lenders – RateSetter, Funding Circle and Zopa – purely offer auto-invest options.
Another peer-to-peer consumer lender with an IFISA on the market is Lending Works. Launched in February 2017 it offers an annual return of six per cent for five-year loans or 4.5 per cent for three-year loans. This is an auto-invest product with a minimum investment of £10.
Proplend are also offering peer-to-peer investment within an IFISA, secured against first charges on commercial property. Investors can expect returns of between five per cent and 12 per cent.
If the FCA does reform the home credit market, its past moves could indicate what’s in store for Provident’s door-to-door lending. The FCA’s caps on payday lenders lowered the average cost of a typical payday loan to 60 pounds from 100 pounds and slashed default rates by a third. Leading player Wonga Group Ltd. saw its sales plunge 64 percent in 2015.
A report from professional services and Big Four firm EY has shown that fintech businesses in the UK are embracing Open Banking, with 59% seeing the initiative as an opportunity to reconsider their collaborations.
The study, which surveyed more than 30 UK fintech businesses, found that more than 80% of businesses are getting ready for Open Banking, whilst 29% said that they are fully prepared for the initiative.
The study showed that businesses have started to prepare for the scheme by increasing the amount of staff they have working on Open Banking-related propositions, with 30% of businesses with 50 to 250 employees saying that they had teams of ten working on the changes.
Investors looking for a higher yield from property should consider this bond from LendInvest.
Nearly every recent issue over the last few years has been at a rate of between 4% and 6%, which is well above the rate on offer from the government (via gilts) and investment-grade corporate bonds.
The platform is focused on short term, bridging and development loans rather than buy-to-let loans. In total, its initial £50m fundraising has been invested in 89 different loans (implying an average of around £560,000 per loan), with an average loan-to-value (LTV) ratio of about 57% – so the average loan looks to be backing a project worth around £1m.
Of those 89 loans, nearly all are first charge, and at least 19 (of the 87 first-charge loans) have a LTV ratio of under 50%. That means that if there were a sharp property recession, a good proportion of the book should have plenty of equity in case of default. By contrast, 17 of the loans have a LTV of 70% or more, which might seem a slightly more worrying state of affairs in a downturn – you’d only have an equity buffer of around 25% to 30% at most. It’s also worth noting that 63% of the loans are in the Greater London area, which is arguably more vulnerable in a downturn.
The overall winner of the second annual Datathon, hosted by business advisory firm Deloitte, was ‘Data Nations’, a team of data experts who developed FinTastic; a digital tool to help people make better financial decisions at key moments in their life.
A recent report in ECNS indicates China wants to have a “dynamic approach” regarding Fintech or internet finance. The report was referencing a press conference following the 13th National People’s Congress that was held earlier this month that involved the Zhou Xiaochuan, Governor of the People’s Bank of China.
In many respects, China is the largest Fintech market in the world. It has the largest online lending (peer to peer lending) market by far and benefits from a population that is widely connected to the internet by mobile devices. A combination of demand from both consumers and businesses has fueled innovations in finance.
Which? received reports that in some cases thieves had entered other people’s names and addresses then intercepted the package. A few weeks later, the victims received a letter from Klarna chasing up the payment, warning the debt will impact their credit rating.
A spokesperson for Klarna said that it takes fraud seriously, and when this issue arose it immediately looked at ways to combat it. Klarna said that anyone affected by fraud should contact the company to dispute the order, and that this will in not affect a customer’s credit rating.
Traditional approach: Atom Bank, Tandem Bank, and Starling Bank prioritized having a bank charter prior to launch and built a suite of services that required a charter, believing it would create a moat around the platform. Atom Bank, for example, launched a savings account and SMB lending after regulatory approval. They also plan to launch current accounts but that roll out has so far been delayed.
Semi-traditional bank: Monzo and Germany-based N26 wanted to get customers onto the platform. To do so, Monzo launched a prepaid card instead of a full account product.
Monzo was going through a period of rapid growth, adding a reported 60K users a month when the company was granted a charter. In December 2017, they stopped adding new customers and announced plans to focus on transitioning the 500K existing customers off of prepaid cards and onto Monzo’s own current accounts.
As of February 2018, the company has a waitlist for new current account registrations, which means it’s missing out on roughly 180K potential new customers (at the peak growth rate of 60K per month) as it focuses on transitioning its existing customers off of the prepaid cards.
Fast-lane approach: Revolut challenged the conventional go-to market strategy by applying for an easier-to-acquire e-money license and targeting currency exchange rather than current accounts. Revolut initially focused on frequent travelers, a niche they believed was underserved. It built a digital currency exchange app, which allowed people to exchange money more frequently across countries without establishing multiple bank accounts.
Award-winning Swiss fintech firm Loanboox is planning further expansion into Europe having obtained a foothold in Germany. The digital portal for matching institutions with investors plans a move into France and is also looking at other European markets.
Since its inception, Loanboox has now played a part in connecting around 1,000 clients and facilitating requests of some CHF9 billion ($9.5 billion) in public sector loan deals.
Millennial investors stand to inherit $30T of potential assets from baby boomers. To attract and retain this next-generation of investors, advisors need to offer sustainability, clean energy, and social impact investing strategies.
There are massive demographic shifts underway in wealth management. Millennials are now the largest generation in the workforce and 2x more likely than the average investor to make a sustainable investment.
Social issues like climate change and gun-control are top of mind for the next-generation, and 75% of millennial investors believe their investments can influence change, according to one survey conducted by Morgan Stanley.
Further, impact investing is a growing part of the wealth management market. In 2016, it’s estimated that sustainable investment assets grew to $22.89T globally, up 25% from 2014 according to the Global Sustainable Investment Alliance (GSIA).
The Australian Treasurer, the Hon Scott Morrison MP, and UK Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, signed an agreement in London on 22 March, 2018 to establish a FinTech bridge.
The UK-Australia FinTech Bridge will deepen collaboration between governments, regulators, and industry bodies in the two countries. It will also support improved access for Australian FinTech firms to the UK market.
The FinTech Bridge includes collaboration between Australian and UK governments to identify emerging FinTech trends and policy issues, enabling better policy positions.
While the citizens of Norway, Finland, and Denmark all have at least one bank account, there are developing countries like the Central African Republic, Niger, and Madagascar, where the percentage of the unbanked population rises well above 85%. The poverty rates in such places are quite high, and is part of a vicious circle, since the inability to get a loan or to make deposits keeps people living day to day. The only available financial resource is social borrowing from friends and family. Yet, rapid technological advancements could turn this situation around.
Micro-financial institutions (MFIs) have developed a particular product, the microcredit, as a way to grant individuals the necessary money to expand a small business or to cover some surging costs, like healthcare.
Yet, the current model for these products is far from efficient, with high operational fees which translate to interest rates around 35-40%. It has even been said that micro-loans promote poverty.
The entire process is digitized to reduce the cost of operations and to bring speed and scale in the lending process”, said Rajiv Raj, Co-founder and director, CreditVidya.“CreditVidya is able to provide alternate data using technology we have not developed so far. We can use this data to further refine our existing credit scoring model,” said RBL Bank’s Toor.
Both Experian and CreditVidya said that alternate data is most beneficial for assesement of new – to-credit customers for whom centralized or structured data is not available.
Cerberus Capital Management, L.P. and its affiliates (“Cerberus”), a global leader in alternative investing, announced today that Roberto Nicastro has become a Senior Advisor to the firm. In this role, Mr. Nicastro will consult with Cerberus as it continues its focus on investment opportunities and strategic partnerships in the European financial services sector.
The battle between taxis and ride-sharing services might be old news already, but today, peer-to-peer lending platforms and other emerging tech-driven financial products are continuing to ruffle the feathers of our stalwart financial institutions.
Mumbai-based blockchain startup Nuo Bank has raised $250,000 (Rs 1.6 crore) from payment gateway firm PayU India’s chief executive officer Amrish Rau and managing director Jitendra Gupta, a top executive has told VCCircle.
Savings are stored on the blockchain and instead of interest on savings, customers gets a virtual share in the revenue of the bank. Nuo Bank will offer around 20% of its 1 billion tokens – Nuo Coins – to customers.
These contracts will stipulate that up to 25% of the bank’s revenue should be reserved for these tokens.
Even as mobile wallets companies are struggling to ensure that the customers comply with KYC norms in order to load money to their wallets, customers are able to circumvent the process with the use of digital gift cards.
For instance, customers can add money to their Amazon Pay wallet by purchasing gift cards of Amazon. The gift card offers a code that once added to the wallet loads the money.
Users of prepaid payment instruments (PPI) such as mobile wallets were asked to complete the KYC requirements by February 28 by the Reserve Bank of India (RBI). The regulation bars customers from loading money into their wallets if they haven’t complied with the KYC norms. It also restricts them from carrying out remittance-based transactions. They will also not be allowed to transfer the cash in the wallet to their bank accounts.
SmartOwner, India’s first and largest online marketplace for real estate investors, aims to make the process of investing in real estate a seamless and streamlined process. It was founded by Silicon Valley entrepreneurs having a considerable amount of experience in the technology and real-estate sectors. In fact, SmartOwner wants to make property investing as simple as investing in Mutual Funds and the Stock Market.
Long Blockchain Corp. (Nasdaq: LBCC) (the “Company” or “Long Blockchain”) today announced that it has closed on a strategic investment in TSLC Pte Ltd. (“TSLC”). TSLC is the parent company of CASHe, a provider of digital money and short-term financial products to young millennials across India.
In Brazil, the antitrust watchdog, Cade, is looking into the credit card industry, with an eye on possible anticompetitive practices.
The investigation comes, Reuters reports, after a complaint by Nubank, a Goldman Sachs-funded FinTech. The company offers credit cards and checking accounts to 3 million people in Brazil. Nubank also has approval in place to become a bank. Earlier this month, the company raised $150 million in a financing round that was led by DST Global Investment Partners. Last year, the company was granted a credit line of 455 million reais, or about $137.71 million.
News Comments Today’s main news: Varo Money applies for a bank charter. This news could blight SoFi for a time. MPOWER Financing launches $100M debt funding round. Zopa updates on IT glitch, disappearing money. JD Finance opens VC fund for early-stage projects.SoftBank invests in Flipkart.Money Forward to IPO in Tokyo. Today’s main analysis: PeerIQ on PayPal, LendingClub, and OnDeck. Today’s […]
Varo Money applies for a bank charter. AT: “This is just the beginning of a new wave of bank charters on the horizon. Varo Money follows SoFi into charted waters, but Varo Money is looking to be chartered through the Office of the Comptrolle of the Currency and take deposits from the FDIC. I can’t wait to see who takes this path next.”
SoFi faces sexual harassment claims. AT: “If these allegations prove to be true, SoFi could see a dip in its reputation and stock following, but companies generally recover fairly quickly from these mars.”
ICOs have raised $1.2B surpassing early stage VC. GP:”ICOs allow to talk directly with individuals who invest based on different criteria than VCs. I think it is a great alternative and both methods will live happily ever after in paralle as just another way to pre-sale and or raise capital.”AT: “Is this now where investors want to put their money? I think a large part of the appeal with ICOs has been its unregulated status. Now that the SEC plans to regulate it like a security, I wonder if investors will go back to VC funding. Will there be a directional change in where the money is going? I think maybe a little.”
Varo Money Inc., a digital banking startup backed by private-equity firm Warburg Pincus LLC, last week formally applied for a national banking charter and deposit insurance, the company said. The filings aren’t public yet.
Taking those steps could put Varo—which now partners with banks to provide services for its mobile banking application—on the path to becoming a full-fledged, regulated bank. That means it would take deposits, pay interest, make loans in any state, and issue cards, all through smartphone apps.
Social Finance Inc., known as SoFi, is seeking to become a Utah industrial bank. A group of Silicon Valley venture-capital firms recently bought stakes in a New Jersey bank, CRB Group Inc., that partners with fintech software firms.
Varo is going a step further, seeking a national banking charter from the Office of the Comptroller of the Currency, as well as the ability to take deposits from the Federal Deposit Insurance Corp.
Social Finance, a hot financial start-up, is the latest prominent Silicon Valley company to face accusations that it turned a blind eye to sexual harassment.
The former employee who filed the suit, Brandon Charles, worked at SoFi for only a few months this year. But the lawyer handling the case, Robert Ottinger, said that he expected to file another lawsuit next week claiming broader mistreatment of other SoFi employees and seek class-action status.
A spokesman for SoFi, Jim Prosser, said that the claims by Mr. Charles were “investigated in depth by the company and found to have no merit. We will vigorously defend ourselves against any claims otherwise.”
PayPal acquired Swift Capital, a provider of working capital to small business owners. PayPal cited Swift’s talent and capabilities as rationale for the transaction, as well as a desire to strengthen PayPal’s overall merchant value proposition. We note that PayPal invested in LendUp just a few weeks ago. The payment processor appears keen on bulking up its lending footprint to compete with rivals Square, Affirm, and Amazon Lending.
After a rough 2016, Lending Club has regained investor confidence with net revenue and originations at their highest levels since Q1 2016. As of Friday’s close, Lending Club’s share price was at $5.90, up 20% from its recent low of $4.92. A key success in Lending Club exceeding expectations was the CLUB securitization which netted $3.7 Mn–a key driver of Lending Club’s $4.5 Mn in Adjusted EBITDA this past quarter.
New revenue stream: Lending Club plans to continue with one securitization per quarter, with expectations of a prime deal in Q3. They plan to contribute approximately $100 Mn in prime loans off the balance sheet for Q3’s deal.
The CLUB securitization netted $3.7 Mn and was highly oversubscribed: Through sponsoring the security, Lending Club earned ~$600k, via a combination of selling servicing rights, pricing above book value, and netting out costs. The other $3.1 Mn came from $4.6 Mn in interest income earned while accumulating near-prime loans, less $1.4 Mn in write downs as principal was paid off.
Increased bank participation: Lending Club saw 44% participation from banks in Q2 which decreases its “effective funding cost” and shows confidence in their loans.
OnDeck moved to a positive adjusted Net Income ($1.5 Mn) and generated gross revenue of $86.7 Mn (up 25% year-over-year). OnDeck has focused on tightening credit underwriting and cost rationalization; consequently, originations were down for the quarter to $464 Mn (from $590 Mn last year). OnDeck has successfully executed its $45 Mn cost rationalization plan and expects operating expenses of ~$40 Mn for each of the next two quarters.
Net Interest Margin and Net Interest Margin after Losses have fallen to their lowest points in recent times. A large contributing factor to this is Net Charge-Offs by quarter which has hit a recent high of 18.5%. We would expect charge-offs to decline in future quarters and NIM to expand due to management actions to tighten credit underwriting and cost rationalization.
MPOWER Financing (www.mpowerfinancing.com), an innovative fintech company and provider of educational loans to high-potential, international students, has launched a $100 million debt financing round to meet its growing pipeline of loan applications.
MPOWER Financing also announced that Mike Davis, the company’s co-founder, has assumed the position of chief investment officer, replacing Alonso Garza, who will become a member of the company’s board of advisors and will serve as consultant for LATAM business and capital development out of Mexico City.
The amount of money raised by cryptocurrency and blockchain start-ups via so-called initial coin offerings (ICOs) has surpassed early stage venture capital (VC) funding for internet companies for the past two months.
The total amount of money raised via ICOs in April was just under $100 million, but by May this had more than doubled to almost $250 million, according to Coinschedule, a website that tracks such data. In June, ICO funding had hit over $550 million and it was the first month ever that it surpassed angel and seed VC funding.
Angel and early VC funding in June was just under $300 million, Goldman noted, according to CB Insights data. In July, ICOs were just over $300 million, while angel and early VC funding was just over $200 million.
Fundrise, an online investment platform for real estate, has filed for a National For Sale House eFund. Fundrise has previously announced targeted eFunds dedicated to specific metro markets. Fundrise will be offering up to $50 million in common shares to the public at $10.00 per share. The minimum investment in our common shares for initial purchases is 100 shares, or $1,000 based on the current per share price. The offering circular has all the information you may want to review and this specific eFund is not yet available on the Fundrise real estate investing platform.
Fundrise National For-Sale Housing eFund, LLC was formed to acquire property for the development of for-sale housing in metro areas other than Los Angeles and Washington, DC – where Fundrise currently has targeted eFunds.
The executive explains that part of the power of the marketplace lending model is the iterative nature of the loan making process. Over time, data generated from lending provides a Kaizen like process of continuous improvement. This allows LendingClub to anticipate and adapt faster on behalf of both borrowers and lenders.
Projected investor returns are also largely unchanged from the first quarter ranging from approximately 4% to 9%.
RealtyMogul has now raised over $290 million online from over 135,000 investors. RealtyMogul has returned more than $65 million to investors with zero principle lost, according to management. RealtyMogul also operates a 1031 exchange that allows current investors in real estate to defer capital gains tax on the sale of a property if they reinvest the proceeds in another qualifying property.
Jilliene Helman: The are currently 11 investments in MogulREIT I, which recently declared its twelfth consecutive month of 8% annualized returns on investment.
Jilliene Helman: With increasing demand for housing across the country, we see a huge opportunity in the multifamily marketplace. As millennials and Gen Z enter the workforce, they are of prime age and income for renting, and their preference to maintain a flexible lifestyle supports renting instead of buying a home.
Opportunities exist in many geographies around the country, and while the underwriting process is very complicated, some factors we look for are favorable business climates, an upward trending influx of young people and strong job growth in key industries. Markets that meet these criteria include Atlanta, Dallas, Nashville, Raleigh and Salt Lake City.
LexisNexis® Risk Solutions, a part of RELX Group, and BioCatch, the behavioral biometrics industry leader, announced today that they are working together to help companies in all industries bolster efforts to stymie fraud scenarios, like application fraud, a rapidly-growing issue. According to the LexisNexis Risk Solutions card issuer fraud study, application and account takeover fraud represents 40 percent of total fraud losses.
As a result of this new relationship, companies will receive additional risk scores through the LexisNexis® Risk Defense Platform that expand on the data typically provided by the customer (which can be compromised) by analyzing how the user behaves (which is innate). During the application process, this solution monitors behavior and is able to discern between a real user and an impostor. This approach is achieved by recognizing normal user behavior and fraudster behavior, which includes Application Fluency, how well a user knows the site; Navigational Fluency, how well a user knows various computer functions, and Data Familiarity, how well a user knows the information they are entering.
Integrating behavioral biometrics to detect criminal behavior has proven to be very successful and has already prevented major financial losses. For example, BioCatch was able to save a major Latin American e-commerce retailer more than $200,000 a month against new account fraud, with nearly $2 million saved in the last Black Friday weekend alone.
In a move announced Thursday, San Francisco-based financial-tech company Earnest will expand into Utah, with plans to spend $5.6 million on a new office and hire 500 employees over the next five years.
The fact that OnDeck and Lending Club posted upbeat Q2 earnings this past week is a constructive step. But in the wake of Goldman’s growing Marcus juggernaut, Affirm’s point-of-sale traction, Softbank’s $250-million infusion into Kabbage and ongoing rescue financings courtesy of Asian conglomerates and US credit hedge funds, it’s premature to suggest that the good times are back for the publicly traded former wunderkinds. And for that, we blame the 2014-15 fintech hype machine, which led the consumer and small business marketplace lending sector to achieve skyscraper technology multiples in the first place. Cleaning up after a wild party is never fun, and given the former frenzy of online lending start-ups, it’ll take more than a decent quarter to make things right.
The rapid pace of upheaval in banking and payments today is leading to many innovative non-banking customer experience ecosystems, with banks largely serving a utility function.
The payments process is increasingly a minor, hidden step in the chain. With ongoing digital innovations, nonbanks could take over more of the payments space, too, as well as other financial services. But more importantly, banks stand to lose the all-important customer engagement layer entirely unless they reinsert themselves into the customer experience.
Not only can banks easily orchestrate and field transactions across various industries that the customer interacts with, but banks are best-positioned to provide insights that help customers move closer to their overall goal of financial wellness. For example, in addition to offering card-linked retail promotions, banks can help customers control or channel their spending in the context of their financial status and goals.
Customer experiences pertaining to payments, retail and financial health still operate to a large degree independently of each other. Each interaction in these ecosystems builds on a distinct silo from the customer’s overall financial profile. A fragmented customer experience means that our financial goals are fragmented, our shopping wish lists are fragmented and our planning is fragmented. As a result, customers have unmet needs in terms of maximizing their financial well-being, and must regularly look for reinforcement from external sources to validate the personal finance recommendations of walled-off ecosystems.
Laughlin served as General Manager at Union Square Ventures, an early stage venture capital firm with $1B+ under management. Some portfolio companies include Etsy, Twitter, SoundCloud, Tumblr, Lending Club, and Kickstarter.
VatorNews: What is your investment philosophy or methodology?
Brittany Laughlin: So my perspective, even before staring Lattice, which was over a year ago, was just on how companies can successfully scale and grow.
The philosophy at Lattice is making sure that the early stage entrepreneurs get the support, the connections, the talent, and the long-term perspective that they need to be successful over a long period of time.
VN: What do you look for in companies that you put money in? What are the most important qualities?
BL: In terms of the entrepreneurs, we look for people who have some attachment to the problem. We look for a kind of obsession with the problem because it’s going to be a long road ahead and if they don’t have that passion early on for what they’re solving then it’s really hard to keep them motivated as times get harder as they grow.
We look for entrepreneurs that are able to build a team, because that’s such a key component: no business grows without a team. If the entrepreneur doesn’t have a certain skill, they can show that there are people around the table that do. We want them to be smart, hardworking, passionate, things that are required in any entrepreneur, but those are things we specifically hone in on and make sure they have.
VN: These days a seed round is yesterday’s Series A, meaning today a company raises a $3M seed and no one blinks. But 10 years ago, $3M was a Series A. So what are the attributes of a seed round vs a Series A round?
BL: That’s a question we’ve been asking ourselves too. As seed investors, we’re speaking to our companies about what they need to raise the next round.
If you’re a SaaS-based business, they’re going to compare your revenue multiples to try to come up with a valuation that way. The rumored metrics for SaaS business, it used to be $100,000 MRR and now that’s creeping to $200,000. I think the reason you’re seeing the larger A rounds is that the businesses have a lot more traction than they did a few years ago so the bar is higher to meet those traction goals, and that’s why the funding reflects that.
I think sometimes taking on too much money too early creates an artificial hurdle for that company where, if they don’t need it, they’re in a worse place than if they took less money, proved some traction, and then returned to market. They can always raise more if they had good growth versus trying to get a big lump sum at the beginning and then, only when they’re out of runway, really looking hard at where their numbers are or where they’re going. They can sometimes get stuck in between.
The question is whether LC could become a buying opportunity for investors anytime soon.
As a result, P2P lenders are able to provide their services more cheaply than banks and other traditional financial institutions. P2P lenders therefore have the ability to achieve higher returns compared to what might be offered by banks. Borrowers can borrow at reduced interest rates even when a P2P lending company’s fee is included.
However, P2P lending is not without its risks. There is a greater risk that the borrower defaults on his loan, since the lower interest rates of P2P lending appeal greatly to those who have low credit scores.
Today, Fitzgerald doesn’t get shown the door so abruptly by investors or major insurance incumbents, now that PolicyGenius has become a significant force in introducing life and other types of insurance to consumers eager to comparison shop. However, the “Kayak for insurance” metaphor that is sometimes attributed to PolicyGenius isn’t welcomed by Fitzgerald. That’s because shopping for insurance can be a complicated process with no hard and fast rules.
Alternative investing platforms now use VIA Folio’s fully integrated, online offering and brokerage platform to improve investor engagement and access to alternative assets, such as Reg A+ IPOs, Reg D private debt and equity and unlisted REITs.
The alternative investing platforms working with VIA Folio include:
ALTZInvestment Strategies – enables access to alternative equity and debt investments, with offerings for Reg D-accredited investors that include real estate, renewable energy, private equity, Reg A+ IPOs and liquid alternative investment opportunities.
BANQ® – an electronic investment banking platform for small cap IPOs, public offerings and Reg A+ offerings and placements. It gives advisors exposure to rapidly growing sectors and new technologies, and provides investors with liquidity through dividends or the public markets.
Boustead Securities, LLC – an investment banking firm that executes and advises on IPOs, mergers and acquisitions, capital raises and restructuring assignments in a wide array of industries, geographies and transactions, for a broad client base.
Cambria Capital – a technology-driven investment bank that uses its institutional investor relationships, and high-net-worth and retail investor accounts, to raise capital for growth-stage companies throughReg A+ and other types of public and private offerings.
A decentralized peer-to-peer lending application built on top of the Ethereum Network is preparing for its initial coin offering.
ETHLend uses blockchain technology to provide secure and transparent lending for people across the world, with the goal of eliminating interest rate differences by injecting liquidity into local markets by using blockchain technology to enable secure and transparent lending.
According to Bloomberg, more than $8 Billion has been raised in Fintech so far in 2017. Also, 5 companies have already joined the “Unicorn” status with values over $1 Billion. We have compiled a list of best Fintech reports for 2017, from some of the leading names in the industry.
LED’s Peer to Peer Roundtable is a 10-month series of roundtable sessions where 15-18 small business owners meet to share their experiences and learn from one another in a supportive environment. Each roundtable is a problem-solving session that addresses the issues impacting your business right now.
Applications are currently open for small businesses and we invite your business to apply today.
In addition to building an investment strategy based upon investment and risk preferences, the next generation of automated financial advisor would need to fully understand customers’ goals and how they prioritise some over others; an emotional dislike of being in debt may see the client seek to pay off cheaper debt and eschew potentially higher yielding investment opportunities, just to get it off their back.
We at 11:FS and Fintech Insider have launched Fintech Insider News – a dedicated news and commentary platform for our people to come together and discuss what’s new and interesting in the financial services industry.
Several months ago Ellie Mae started tracking loans made by millennials. When they started, 36% of millennials chose an FHA loan. That has dipped to 32% in the latest survey. Conventional loans are now at 63% for that age group. When one considers the skimpy loan limits in many areas and the cost of FHA insurance vs. PMI when you have a high score, this is not surprising.
One of the ways investors can access their money early is by selling active loans to other investors on the secondary market. When investors sell their loans we work out their value, and compare them to new loans. If the loans being sold are worth less than new loans, the seller compensates the buyer for the difference, which is reflected in the loan’s price. This happens as part of the loan sale process, which we manage for you.
Due to a technical issue, some investors may have paid too much when buying or selling loans.
Landbay, the specialist buy to let mortgage lender, is today announcing a new partnership with Positive Lending, the latest specialist distributor to join its panel of distribution partners.
Landbay will help Positive Lending service its professional buy-to-let landlord clients with bespoke mortgage offers, including products for HMOs, Multi Unit Freehold Blocks and expat borrowers.
The partnership will also give Positive Lending access to Landbay’s online intermediary portal. This includes features such as case tracking and a property portfolio key, which will allow brokers to enter detailed analysis of a landlord’s full portfolio in advance of September’s PRA portfolio landlord changes. Once brokers have completed the online application process, Landbay issues an Offer in Principle within 48 hours and typically completes loans within 21 days.
At inception, the mandatory bank referral scheme was terribly exciting. The plan was simple enough. Big banks would direct small business loan applicants which they had rejected to neutral finance platforms, which would then find a more suitable funding solution for the applicant, using matchmaking technology. Those solutions were to come from a whole host of potential providers: from peer-to-peer lenders, to building societies, to challenger banks.
The scheme took a long time to put together. Announced by government in August 2014, it wasn’t until November last year that the scheme finally went live. Initially there were three designated finance platforms: Funding Options, Funding Xchange and Bizfitech.
The big story for the UK’s alternative-finance sector is how many platforms are beginning to look less than “alternative”: Zopa is getting a banking licence, while Funding Circle’s deal with fast-food titan JustEat – to supply lending capital to takeaway food businesses – feels very much like the commercial banking relationships of old. But what has most caught my eye is peer-to-peer (P2P)property-lender Landbay: more than £30m of its buy-to-let mortgages have been included in a large securitisation of loans with an AAA rating.
Oakam, a digital micro-lender for the UK’s unbanked and underbanked consumers, has appointed Julie Haugen to Chief Product & Marketing Officer. Most recently, she was Oakam’s Head of Digital Strategy & Customer Experience, playing an instrumental role in the digital transformation of the business. In her new position, Julie will drive customer-led digital product innovation through closer alignment of Oakam’s marketing and product teams.
Julie has played a central role in Oakam’s digital growth over the past two years, including the launch of its award-winning mobile app in 2015, and the subsequent rollout of Oakam Grow in 2017.
International law firm Simmons & Simmons has advised LendInvest Limited on the establishment of a £500m Euro Medium Term Note Programme for its subsidiary LendInvest Secured Income plc, and on the issuance of £50 million 5.25 per cent Notes due 2022.
On the Thousand Tree Capital, Jingdong Financial said, Thousand-tree capital investment target for the angel turn round A start-up company, the core idea is the data for the investment decision-making engine to the public ecological and financial technology for the post-support, through investment A small proportion of the shares, not too much in the strategic and operational restrictions and interference with the investment enterprises, and ultimately to be invested with enterprises to grow together to share the long-term growth in China’s consumption of the purpose of the dividend.
Recently, there have been a number of online lenders having long-term restrictions on withdrawals in the name of wed site upgrades and the bank depository connection. Many industry insiders said that it is abnormal , and investors need to be vigilant.
Industry insiders also warned that the centralized release of compliance pressure lead the industry to the “detonation” risk period. If the period of delay in payment is over one week, you should be extremely vigilant about the risk of running.
The new 51 billion credit card industry investment fund, will continue to focus on the Internet financial industry chain data, assets, traffic and other high-quality companies (51 credit card industry investment funds), will continue to focus on the Internet financial industry chain data, assets, traffic and other high-quality companies Expand the layout of ecological investment. As early as the beginning of 2016, 51 credit card has been in the Internet financial industry upstream and downstream layout of a number of projects. As of the press conference, has accumulated 15 investment projects, of which three in the investment projects have been recognized by other capital, access to follow-up financing.
The People’s Bank of China is set to make digital payment firms such as Ant Financial and Tencent use a new central clearing house, a move which will see companies forced to share transaction data with rivals.
China has become the world’s mobile payments leader, with non-bank providers handling nearly $15 trillion in transactions last year, according to a central bank unit.
The People’s Bank of China, the country’s central bank, has required all banks and third-party payment institutions to connect to a unified platform by June 30 of 2018 to ensure effective regulation and transaction security.
The new platform, dubbed Nets Union Clearing Corp., is aimed at enhancing supervision of the country’s expanding online payment market. The platform was set up by 45 companies, including the PBOC which own a 12% stake in the platform.
Deposit Solutions GmbH, a Hamburg-based company that enables consumers to move their savings around a network of 15 European banks to find the best interest rate, today acquired Savedo GmbH, a Berlin startup in the same field. The terms of the deal, which Deposit Solutions announced in a statement, were not disclosed.
Lenders and other corporations participated in almost a third of the funding rounds for European financial technology startups in the second quarter, a 31 percent jump from the same period in 2016, according to CB Insights, a New York-based research firm.
In an April report produced by PricewaterhouseCoopers, half the banks surveyed worldwide said they’re planning outright acquisitions of fintech firms. That same month, BNP Paribas SA purchased Compte Nickel, a digital bank in France, for 200 million euros ($236 million).
The European Banking Authority (EBA) has called for fintech regulation to be harmonised across Europe. A report published on its website from an analysis exercise carried out on 282 fintech operators in 24 member states in spring found 31% of companies reviewed were not subject to any regulatory regime.
In 2015, fintech hit $19 billion in total, and by mid-August 2016 global fintech funding had already reached $15 billion. Later, by September 2016, there were over 1,000 fintech firms worldwide and their value made $867 billion. PaymentGenes predicts that already by 2019, 5 billion people will be making digital payments. Moreover, 72% of the consumers of the financial services already use digital channels to open checking accounts, so banking technology in this case plays a major role. The article on Business Insider outlines that major fintech startups on modern market appear in such areas as investment and financial management, banking payments, currency and exchange, insurance, financing and lending.
According to PaymentGenes, at the moment the most popular and in-demand fintech sectors are the following:
Smart finance management
At the same time, Efinancial Careers outlines seven most demanded skills fintech developers should have:
SoftBank Vision Fund will invest about $2.5 billion in Flipkart Group, swelling the Indian e-commerce players’ cash hoard as it vies with Amazon.com Inc., people familiar familiar with the matter said.
The investment includes approximately $1.5 billion directly into Flipkart and $1 billion for part of Tiger Global Management’s stake, the people said, asking not to be identified discussing the details. The deal will make the fund created by SoftBank Group Corp. Chairman Masayoshi Son the biggest shareholder of Flipkart, the people said.
Digital transaction facilitator Payworld is now focusing on insurance and small ticket loan disbursal as next phase of growth story and has tied-up with a few insurers and NBFCs to tap potential customers, a company official said.
Payworld, a nine-year old fintech firm, provides digital transaction services like mobile recharge, e-payment, railway reservation and remittances facilities.
It aims to bring about 10 lakh lives under insurance cover in next one year through this tie-up.
Whether it is the portfolio management process or offering individual financial advice, digital disruption has impacted across every part of the industry. For example, a digital financial services company can now provide investment recommendations while leveraging machine learning to conduct on-going portfolio performance updates sent to customers via a smartphone. The impact of this will be felt increasingly as millennials gives way to even more tech-savvy generations in future for which digital will become the norm.
Many banks will attempt to remodel themselves as technology companies, ȧ la Goldman Sachs, in an attempt to conduct “capital lite” activities that are more reliant on a technological or intellectual competitive advantage and less impacted by regulatory capital and size of balance sheet. For example, UBS Prime Brokerage claims to have a return on assets twice as a high as some of its competitors by using technology to reduce its costs to serve hedge fund clients.
As a consequence of FinTech’s impact we will see the emergence of commercially viable digital businesses that have a sustainable economic advantage. They will not need to extract economic rents due to their privileged position as market intermediaries, providers of capital or holders of an asymmetric informational advantage.
Fintech startup Money Forward could go public on the Tokyo Stock Exchange’s Mothers market by September.
The funds raised from the initial public offering will be spent on boosting sales offices and expanding operations and the company’s market capitalization is expected to be between 10 billion yen to 20 billion yen.
Philippine Bank of Communications (PBCOM) will make available its consumer lending business including home, auto and personal loan products on the Lendr platform following the bank’s signing the agreement with FINTQ in late July 2017.
By offering these products via a seamless, telco-agnostic digital platform like Lendr, PBCOM is extending the reach of its financial products and offering potential borrowers the convenience of applying for a loan, submitting their requirements, and getting notified about the status of their application all at the tap of their smartphones.
PBCOM’s 2016 earnings grew on the back of a 28% expansion of its loan book to P44.3 billion, with focus on secured consumer loans as well as bankable large and middle market corporate accounts. It also provided credit worth P9.6 billion to clients in the same period, resulting in an 11.61% increase in net interest income.
On 7 August, Abu Dhabi Global Market (ADGM), the International Financial Centre (IFC) in Abu Dhabi, and the Responsible Finance & Investment Foundation (RFI), a think tank for responsible finance, announced their entry into a partnership to help the growth and sustainability of the FinTech ecosystem through financial inclusion and ethical and responsible finance practices.
They will highlight emerging FinTech trends and support the development of innovative Shari’ah-compliant FinTech companies seeking to participate in the Middle East and African markets.
Bahrain plans to set up a Fintech Centre next year to provide accelerators and co-working spaces for fintech companies, Simon Galpin, Managing Director, Bahrain Economic Development Board (EDB) has said.
The Fintech Centre, which is likely to be opened in February or March 2018, would also provide networking opportunities for both startups and big banks interested in the fintech area, Galpin told BusinessLine.