Thursday May 30 2019, Weekly News Digest

financial hub

News Comments Today’s main news: SoFi has raised $500M. Morningstar accelerates acquisition of DBRS. PayPal hits $10B in small business loans milestone. Lendy goes into administration. Klarna launches installment loan app for all retailers. New York overtakes London as financial hub of the world. Today’s main analysis: LendingClub’s advance shareholder meeting presentation (A MUST-READ). Today’s […]

The post Thursday May 30 2019, Weekly News Digest appeared first on Lending Times.

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United States

United Kingdom

European Union

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News Summary

United States

Online lender SoFi has quietly raised $ 500 million in funding, led by Qatar (TechCrunch), Rated: AAA

Online lending startup Social Finance, better known as SoFi, took another tack this morning, quietly announcing in a press release that it has closed half a billion dollars in a single funding round led by Qatar Investment Authority, a Doha, Qatar-based private equity and sovereign wealth fund.

SoFi Raises $ 500M, Valuation Remains $ 4.3B (PYMNTS), Rated: A

The company said it will use the capital to invest in growth and add some muscle to its $2.3 billion balance sheet. The company’s valuation will stay about the same as with the last funding round two years ago, which was led by Silver Lake.

SoFi Is Close to a Deal Putting Its Name on L.A. Football Stadium (Bloomberg), Rated: A

Social Finance Inc., a financial technology startup, is close to signing a deal that would put its name on a new NFL stadium under construction in Inglewood, California, according to two people familiar with the matter.

The deal for the stadium, which would be home to the Los Angeles Rams and Chargers, hasn’t been signed so figures could change. But currently the agreement would have SoFi pay $20 million a year for 20 years, these people added.

Morningstar to Accelerate Credit Ratings Business with DBRS Acquisition (Morningstar), Rated: AAA

Morningstar, Inc. today announced it has entered into a definitive agreement to acquire DBRS, the world’s fourth-largest credit ratings agency, for a purchase price of $669 million. The combination of DBRS with Morningstar Credit Ratings’ U.S. business will expand global asset class coverage and provide an enhanced platform for providing investors with leading fixed-income analysis and research.

PayPal’s Latest Milestone: $ 10 Billion In Small Business Loans (Forbes), Rated: AAA

The small business lending market is booming and it’s not the traditional banks that are benefiting. Fintechs are leading the way. Case in point: PayPal.  It hit a milestone, announcing it has provided more than $10 billion in loans to more than 225,000 small businesses around the globe.

The $10 billion mark comes a little more than five years after PayPal made its first loan. Today it has issued more than 650,000 loans through financing programs in the U.S., UK, Australia, Germany, and Mexico.

PayPal Crosses $ 10 Billion In Small Business Loans (Lend Academy), Rated: AAA

Now they are hitting some impressive quarterly milestones, originating $1 billion per quarter, so their next $10 billion is surely to happen even quicker.

deBanked recently highlighted the leading small business originators which showed that PayPal is solidly the leader when it comes to originations in the US. OnDeck which is second to PayPal reported originations of $636 million in Q1 2019. According to data provided by Funding Circle on their website, which includes their lending globally, they have originated $9.5 billion in loans.

Source: deBanked.com

LendingClub Posts Presentation in Advance of Shareholder Meeting (Crowdfund Insider), Rated: AAA

Borrowers can save over $ 2,000 by shopping for lenders who offer low mortgage fees (LendingTree), Rated: AAA

Key findings

  • Mortgage fees in the first quarter had a median of $2,059 for purchase loans and $1,807 for refinancing.
  • The more offers a borrower receives, the greater the potential for savings. For people receiving five offers, the median spread between the highest and lowest fees offered was $2,045.
  • 7% of new purchase borrowers and 8% of refinance borrowers were offered $0 in fees.
  • 15% of new purchase borrowers and 19% of refinance borrowers paid less than $500 in fees.
  • 28% of purchase borrowers paid less than $1,000 in mortgage fees, with 35% of refinance borrowers also paying less than $1,000 in fees.
  • At the high end, 13% of purchase borrowers were hit with fees over $5,000, 3% over $10,000 and 0.21% over $20,000.
  • For refinance loans, 12% were offered upfront fees over $5,000, 1% over $10,000 and 0.02% over $20,000.

Home Loan Provider Earns Top 5-Star Rating from TopConsumerReviews.com (PRWeb), Rated: A

TopConsumerReviews.com recently gave their highest rating to LendingTree, an industry leader among providers of Home Loans, for another consecutive year.

Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA

First, a quick summary of headlines. The Fed agreed to keep interest rates on hold for longer according to the minutes of the April meeting. The decision is expected to help inflation pick up towards the Fed’s 2% target. The Fed’s latest ‘dot plot’, shown below, indicates Fed governors on the margin expect lower rates in the 2019 to 2021 timeframe suggesting lower growth expectations.

Source: PeerIQ, US Federal Reserve, Bloomberg

“…what we see is right now the fundamentals of the economy in the U.S. on a global basis and the fundamentals of consumers and unemployment being low as you mentioned, means that credit is in good shape and we just don’t see that changing a lot.”

Brian Moynihan, CEO of Bank of America

Kroll also released a report on the Evolution of the Consumer Loan Marketplace Sector to lay out how the sector has matured over time. The report comes on the heels of a Fitch report that said that declining credit enhancements in MPL deals is unwarranted.

Prevent attrition and win new relationships with loan options (Bankless Times), Rated: AAA

Small business clients are increasingly looking to alternative lenders for financing. There are numerous draws for SMB clients: a fast and easy application process, quick funding, and a higher chance of being approved for a loan.

According to the Federal Reserve’s Small Business Credit Survey, the main reason clients applied for funding from an online lender was the speed of decision / funding (63 percent) followed by a better chance of being funded (61 percent).

The number of small business owners who turn to alternative lenders for funding has increased steadily since 2016.

Source: Bankless Times

RedWeek Teams Up with Affirm to Help Travelers Vacation Now and Pay Later (Yahoo! Finance), Rated: A

RedWeek.com, the largest online community for timeshare rentals and resales, announced a new partnership with Affirm that will give travelers the flexibility to pay for their vacation rentals in simple, monthly installments.

Travelers can check eligibility for a loan online before booking their next trip and, after entering five simple pieces of information, receive a real-time decision without impacting their credit scores.

3 Alternative Lending Options to Help Build Your Business Credit (Nav.com), Rated: A

1. Online Business Loans

Once upon a time, if you wanted to borrow money for your business you had to make a trip down to your local bank branch or credit union to see if you could qualify for funding. However, a new generation of business lenders has since emerged to offer business owners an alternative way to secure capital.

2. Invoice Financing

Is your business structured in a way so that it gets paid after delivering services or goods to customers? If so, invoice financing is an alternative lending option that might work for you.

3. Microloans

Microloans are issued through non-profit organizations aptly named microlenders. Although the maximum loan size is generally $50,000, the average microloan issued to a small business or startup is a much smaller $6,000.

CoreLogic Teletrack launches a new platform for lenders and credit issuers (Automotive News), Rated: A

CoreLogic today launched the new CoreLogic Teletrack platform, offering lenders and credit issuers superior access and greater insight into alternative credit data through one of the industry’s largest alternative credit databases. The new platform and solution combine upgraded services, data, products and an analytics engine to help users discover new market segments, make smarter risk decisions and grow their business throughout the credit lifecycle.

What Intuit knows about you (AXIOS), Rated: A

Intuit said Tuesday it had agreed to buy analytics company Origami Logic, effectively doubling down on the use of customer data to enhance its marketing.

The company can cross-sell its own products as well as products and services from third parties — like a Capital One Platinum Credit Card or a loan from Lending Club — based on what it knows about you.

Kabbage And Azlo Collaborate To Make Small Business Lending Easier (eSellerCafe), Rated: A

US online banking platform Azlo and online small business lender announced the launch of Mission Street Capital, a new program that provides small businesses banking with Azlo access to loans through Kabbage up to $250,000.

BitX Funding Strikes Equipment Finance Alliance (PYMNTS), Rated: A

Small business lending marketplace BitX Funding has struck an alliance with transportation equipment finance company Pelagic Capital, the companies said in a press release Tuesday (May 28).

On the Dark Web, your social security number is only worth (CB Insights Email), Rated: A

5 Home Loan Apps To Test-Drive (Spokes-Recorder), Rated: B

Not many know this discount bulk retail giant also provides a loan marketplace to shop for the best mortgage rate. While open to all, Costco members can access discounts on lending services. Loan options include home equity, fixed and adjustable rate, FHA, VA, USDA, and jumbo. Note, this lender’s services are strictly digital so you will not be able to meet up with someone face-to-face.

Top 5 ways to start Investing With Little Money!! (EconoTimes), Rated: B

Though P2P lendings are not low investment choices; with Fast invest, it is possible. You can start investing here with just 1 pound to accelerate cash flow. The website allows investors to deposit amounts and based on that suggests loans. After you choose the loan pack as an investor, the site assigns borrowers. Once the borrower takes the loan from you, the site starts increasing your invested amount with the applied interest rate of up to 14% till the payback period. It also comes with buyback guarantee if the borrower fails to return your loan in the payback period.

Real estate crowdfunding sites provide you the opportunity to invest in third-party properties. Fundrise is the best crowdfunding platform to go for that lets you start investing with only $500. With a year’s saving, you can start investing in this crowdfunding site and gain 8.7 to 12.4% annual returns based on your deposited amount.

BFS Capital Appoints Fred Kauber as Chief Technology Officer and Chief Product Officer (Yahoo! Finance), Rated: B

BFS Capital today announced the appointment of Fred Kauber as Chief Technology Officer and Chief Product Officer. As a member of the management team reporting to CEO Mark Ruddock, Kauber will be responsible for leading a customer-focused product and technology organization whose mission is to help BFS re-imagine financial services for small businesses.

United Kingdom

Peer-to-peer lending provider Lendy enters administration (Credit Strategy), Rated: AAA

Damian Webb, Phillip Sykes and Mark Wilson of RSM Restructuring Advisory have been appointed as joint administrators of three companies within the Lendy Group: Lendy Limited, Saving Stream Security Holdings Limited and Lendy Provision Reserve Limited.

Does Lendy Collapse Hint the Failure of P2P Loans Industry? (LearnBonds), Rated: A

Before administration, over £90 million of loans defaulted out of £160 million of outstanding loans. The collapse of Lendy means investors had lost millions of pounds.

BondMason Reportedly Is Shutting Down P2P Business (Crowdfund Insider), Rated: A

BondMason, an online savings and investments platform that sources investments from across the peer-to-peer (P2P) market for its clients, has reportedly announced it is officially shutting down its P2P lending business.

Combating The Payday Loan With On-Demand Wages (PYMNTS), Rated: A

Peter Briffett, CEO of U.K. FinTech Wagestream, told PYMNTS in a recent interview that the cash flow constraints of having to wait for a single day to receive wages every month can be dangerous to the financial wellness of professionals. A single, expensive incident can force these professionals into debt via bank overdrafts or credit cards — or worse, Briffett said, into the payday loan cycle.

The company recently announced a $51 million funding round for its solution — led by Balderton Capital and Northzone, which provided equity, and Shawbrook, which provided debt.

Microfinance Trends and Size of the Market (Cryptopolitan), Rated: A

And that is where microfinance is moving – to an era where individuals and businesses can get financial services from other individuals and business entities. Technology is providing tools for matching borrowers and lenders. And even more important – the tools for creating contracts that execute accordingly.

European Union

Klarna Launches a Direct-to-Consumer App With Installment Payments Built in (Digital Transactions), Rated: AAA

Announced Tuesday, the Klarna app presents the retailer’s site with a footer containing a Pay with Klarna button. When selecting that option, the shopper can pay for purchases in four equal installments with no interest or fees. The app is open to any merchant, not just those already affiliated with Klarna, the company says. These could include retailers without an alternative-payment option or that use a competitor’s program.

10 more big retail tech plays in 2019 (Retail Innovation Hub), Rated: A

PayTech venture Klarna is launching its first UK “all-immersive store” in London’s Covent Garden, with a private VIP party on 4th June.

Becoming a mortgage lender (IPE), Rated: A

Stabelo’s model is to pool capital from institutional investors in exchange for fixed-income securities and uses the money raised to lend mortgages directly to homebuyers. The firm offers mortgages in conjunction with Avanza Bank, which is the biggest online lender in Sweden, and owns just under 20% of Stabelo.

International

London toppled by New York as world’s financial hub (Tech HQ), Rated: AAA

A survey by consultancy and advisory firm Duff & Phelps, involving 180 executives in asset management, private equity, hedge funds, banking and brokerage, found that confidence in the UK capital has plummetted in the last year.

Just 36 percent ranked London as the foremost global financial hub— a year-on-year drop of 17 percent. With New York rising 10 percent, ranked by more than half (52 percent) as the world’s new financial powerhouse, the two cities have “switched places”.

Source: Duff & Phelps

Crypto Lending Platform Cred to Migrate Tokens to Binance Mainnet in New Partnership (CoinTelegraph), Rated: A

Major crypto exchange Binance has partnered with decentralized crypto lending platform Cred to bring its services to the Binance ecosystem, according to a press release publishedon May 29.

As part of the agreement, Cred will migrate some of its ERC-20 LBA tokens to Binance’s mainnet, Binance Chain, and become the official lending and borrowing platform for the decentralized financial ecosystem.

Crypto Lending Startup BlockFi Launches Gemini Dollar Accounts (CoinTelegraph), Rated: A

Cryptocurrency asset management company BlockFi announced that its interest-bearing accounts now support the gemini dollar (GUSD) in a post published on May 29.

Per the announcement, GUSD deposits will see a yearly yield of 6.2%, paid in the stablecoinin question. BlockFi notes that it also offers GUSD as a U.S. dollar funding option and as collateral from institutional cryptocurrency borrowers.

Top 5 emerging fintech hubs (World Finance), Rated: A

São Paulo
Brazil has more fintech start-ups than any other Latin American country, and most of them are consolidated in the country’s financial centre, São Paulo.

Lithuania
One country poised to see an explosion of opportunities after Brexit is Lithuania. In February of this year, the country saw around 100 British financial companies apply for a licence in the country.

Estonia
Estonia has one of the highest rates of start-ups per capita in Europe. According to Startup Genome, 29 percent of all jobs created by these start-ups are within the country’s fintech industry.

Frankfurt
Home to the European Central Bank and more than 200 banks – most of which are foreign – Frankfurt plays an important role in the EU’s financial system.

Bengaluru
Bengaluru (previously Bangalore) is anticipated to become one of the next big tech hubs. One of Asia’s fastest growing start-up ecosystems, the city is home to 438 fintech start-ups and has been dubbed the ‘Silicon Valley of India’.

Nexo Releases Crypto Lending Update Clarifying Misconceptions and Future Outlook (Bitcoin Exchange Guide), Rated: B

Nexo claims their key business model “is unchanged” but that the company is:

“actively exploring new avenues to maximize token utility and investor value.” The company also claims their ultimate goal is to become “a multi-billion dollar financial institution.”

These are the world’s 100 most influential people in gender policy this year (CNBC), Rated: B

Apolitical, a peer-to-peer lending platform for governments, unveiled its list of the world’s 100 most influential individuals on gender equality on Wednesday. It recognized politicians, activists and academics, among others, who were shaping gender policy in 2019.

Australia/New Zealand

Advice beyond mortgages: “the opportunity is huge” (NZ Adviser Online), Rated: AAA

According to Adrienne Church, General Manager at small business lender Prospa, venturing into an unfamiliar type of lending may be worrying – but it is also necessary as the lending market expands, and the property market remains as unpredictable as it inevitably always is.

Asia

TaniGroup Secures US$ 10 Million in Series A Funding to Re-Imagine Agriculture in Indonesia (Global Banking and Finance), Rated: AAA

Agritech startup TaniGroup, which operates agriculture e-commerce TaniHub and peer-to-peer lending provider TaniFund, today announced it raised a US$10 million Series A round of financing led by Openspace Ventures with participation from Intudo Ventures, Golden Gate Ventures, and The DFS Lab.

Peer-To-Peer Lending In Indonesia: A Regulatory Update (Mondaq), Rated: A

In February of this year, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan  or “OJK”) issued an updated checklist for peer-to-peer lending (“P2P lending”) platform providers (“Checklist”) registering with the OJK or applying to the body for a business license or change of ownership. The new Checklist introduces several changes to the previous checklist issued in October 2018. We highlight the key material changes and new requirements introduced by the Checklist.

MENA

Qatar Investment Authority invests more than $ 500M in SoFi (Mobile Payments Today), Rated: AAA

Qatar Investment Authority has led an investment of more than $500 million in SoFi, a mobile-first personal finance firm. The investment values the company at $4.3 billion on a pre-money basis, according to a release from the fund.

East Africa

Kenya Is Also Setting The Standard For Mobile Lending (Forbes), Rated: AAA

We all know that Kenya revolutionized mobile payments for the developing world and brands like M-Pesa continue to lead the market, but what about mobile lending? According to Creditinfo Kenya, 93 percent of all mobile loans originate from regulated financial institutions, and there are around five million borrowers and each has an average of 5.89 loans.

Canada

This Alternative Lending Company Offers Investors a Huge Margin of Safety (The Motley Fool), Rated: AAA

Home Capital is a specialty finance company that primarily deals in mortgages. The company typically deals with borrowers who don’t meet normal bank requirements. It offers traditional mortgages and consumer lending as well as securitizing insured mortgages and offering home equity lines of credit.

Authors:

George Popescu
Allen Taylor

The post Thursday May 30 2019, Weekly News Digest appeared first on Lending Times.

Friday March 10 2017, Daily News Digest

delinquency rates in u.s.

News Comments Today’s main news: China’s tech giants are pouring billions into U.S. startups. Zopa puts investors on waiting list. RateSetter investors embrace provision fund rules. Latvia breaks RE dev crowdfunding record. Ping An Bank to provide third-party depository service to P2P lenders. Carilend to open first P2P lending platform in Caribbean. Today’s main analysis: Marketplace Lending 2.0. How Brexit could […]

delinquency rates in u.s.

News Comments

United States

United Kingdom

  • Zopa introduces investor waiting list. GP:” Perhaps another way of doing this would be to have a waiting dollar list, not a waiting investor list: each investor can invest $x per month, depending on platform needs. This way you don’t lose clients who see no activity for some time and you take a token of their participation to have them commit and stay committed. ” AT: “Regulated growth is the best kind of growth.”
  • RateSetter investors embrace new provision fund rules. GP:” A very interesting change. We should evaluate these changes in depth.”

European Union

  • How Brexit could help Berlin take London’s fintech crown. AT: “I have to say, though I’m a firm believer that it will take a lot of mojo to overtake the UK as the world’s leader in P2P lending and fintech, there is a compelling argument that Berlin’s growth could be fueld by U.S. and Asian companies choosing Germany over the UK to gain access to European markets post-Brexit. Howevr, they’ll still need a presence in the UK if they want access to the UK market. Whether business interests lean toward Berlin over London in the aggregate and over the long haul, however, remain to be seen.”
  • Latvia’s largest crowdfunded RE dev project.
  • Fellow Finance P2P lending review.

China

Asia

Caribbean

  • Bid to change loan services. AT: “Barbados need no longer be known only for good music and sunny beaches. Fintech has reached so many new shores.”

News Summary

 

United States

China’s tech giants are pouring billions into US start-ups (CNBC), Rated: AAA

Joe Chen, CEO of Chinese social networking service Renren, first met SoFi CEO Mike Cagney in Palo Alto in 2011 and, over coffee, decided to invest in the fast-growth, disruptive online finance start-up. That initial $4 million investment helped SoFi get its start and led to two more financings within three years, with Renren contributing a major chunk of some $230 million raised.

Similarly to Renren, China’s tech titans Baidu, Alibaba and Tencent are leading a surge of Chinese investment in cutting-edge U.S. technology start-ups with bold ambitions to expand their footprint, attract top talent and gain an edge in innovation.

Collectively known as the BAT, China’s giant technology companies that dominate search, e-commerce and mobile messaging in their home market are going global. The United States is their primary shopping place to diversify and build out their brands.

China’s four largest internet companies — the BAT plus e-commerce company JD.com — have invested $5.6 billion in 48 U.S. tech deals over the past two years, according to CBI Insights data.

Last year Chinese investors put a record $45.6 billion in U.S. companies, triple the amount for 2015, according to research group Rhodium Group in New York City.

Besides its groundbreaking investment in SoFi, Renren has invested in a series of U.S. fintech start-ups, leading a $31 million lead investment in crowdfunding real estate site Fundrise in 2014 and leading a $40 million investment in U.S.-based stock-trading outfit Motif in 2015.

For the founders of U.S. tech start-ups, getting cozy with Chinese acquirers and investors can make good business sense. With a Chinese investor, their business gains a competitive edge in the exceedingly difficult-to-penetrate China market. Getting funds from China’s leading tech companies can help U.S. companies gain an entry point to China, an immediate on-the-ground presence and strategic insights such as how to best customize products for the local Chinese market.

Why ‘challenger banks’ haven’t taken off in the US (Tradestreaming), Rated: AAA

Digital banks, big in the U.K., have a trust problem in the States.

That model hasn’t really caught on in the U.S., though, where startups are mostly building technology-based solutions for payments, investing and lending – anything that doesn’t require opening a bank account with an unknown entity. Building that type of business profitably is hard: the cost of customer acquisition is high and complying with complex financial regulations can be a big undertaking.

BankMobile, a rare U.S. success story, offers a compelling case study. With about 2 million accounts since its 2015 launch, it has grown so quickly Customers is selling it to Flagship Community Bank in Clearwater, Florida. (The Durbin Amendment of the Dodd-Frank Act requires companies with more than $10 billion in assets cap their interchange fees at 44 cents, and Customers’ asset size is just below that. BankMobile’s revenue comes mostly from interchange fees on debit cards.) The $175 million deal is expected to close before the end of the third quarter.

Luvleen Sidhu, president and chief strategy officer, said one of the main reasons BankMobile has been so successful is it is acquiring new customers at a low cost – about $10 per account, she specified, compared to the roughly $300 she said it generally costs to acquire a customer returns come out to “maybe $85 a year” in revenue.

U.S. startups are joining banks, not challenging them.

However, it will take more than a better customer experience enabled by technology to motivate customers to open an account or switch from their current bank, despite their general dissatisfaction with the current financial system, Khan said. These new experiences need to focus more on customer behavior – something banks get but startups need to work on more. What will ultimately make a digital bank stand out from legacy banks that are improving digitally is the way it handles data.

That’s why it’s important to remember a tech giant like Facebook or Amazon could get into banking services before a digital bank even takes off, Khan said. If it’s a competition for customer trust, the tech company could beat out all the banks.

Marketplace Lending 2.0 (Deloitte), Rated: AAA

But 12 months later, we see a picture that is much bigger in scope than just MPL-bank convergence. Marketplace lending is an integral piece of a larger fintech puzzle that is transforming the financial services industry.  We expect that asset classes such as small business, student, and unsecured consumer will move almost completely to digital platforms in the medium term, while other asset classes, such as residential mortgages and auto lending will get there more slowly.

Further out, we see a technology platform-enabled lending environment moving from a predictive to a prescriptive analytics stage.

Download the report here.

Six ways Goldman Sachs’ online lender, Marcus, strives for an edge (American Banker), Rated: AAA

  1. It’s tackling a pain point for consumers: credit card debt.
  2. It’s kicking it old school with direct mail.
  3. It’s borrowing culture and office design strategies from startups.
  4. It’s light on fees.
  5. It’s turned off automated voice response.
  6. It lets people defer payments. This isn’t for everyone necessarily, but those who make 12 consecutive payments on time earn a pass. They can contact the bank to defer one payment with no fees or extra interest, so a 32 -month loan becomes a 33-month loan.

What Crowdfunding and ‘Democratizing Capital’ Could Mean for Minority Entrepreneurs (Equities.com), Rated: A

The digital crowdfunding trend in America started in 2003 when ArtistShare launched as the world’s first donation crowdfunding platform for creative artists. Crowdfunding has surely stimulated the national and global economy over the years, but equity crowdfunding is a federally regulated tool with the ability to shift power from large, robust institutions to the individual entrepreneur and investor.

Equity crowdfunding acts as a catalyst for individuals to collectively combat institutional discrimination along with the very real wealth and unemployment disparity between races in the country. While organizing a crowdfunding campaign strategy is complex in nature, leaders across the country are working hard to make this crowdfunding easier and more accessible to everyone.

Below are a few leaders making a difference in the minority community:

  • Dar’shun Kendrick at Minority Access to Capital– Securities lawyer with a focus on helping minorities access capital the legal way.
  • Maureen L. Murat, Crowdie Advisors– Future lawyer with a passion for immigration and securities law helping entrepreneurs raise capital via equity crowdfunding.
  • Kendrick Nguyen and Paul Menchov at Republic– Equity crowdfunding platform highlighting minority, female, and impact investing offerings.
  • Devin Thorpe, Champion of Social Good– Journalist, author, and avid speaker on a mission to solve some of the world’s biggest problems before 2045 by championing the work of change agents who will do it.
  • Lynn Da, Buy The Block– Advocate for minority investment education and access to real estate crowdfunding investments. Platform set to launch April, 2017.
  • StartingFive Partners and General Catalyst Partners, FundLatinos – These two groups came together to develop this donation crowdfunding platform to bring together with the vision to build the tools, technology and partnerships needed to foster a trusted environment for Latinos to raise money for personal and community causes that matter.
  • Charlie Jackson, CEO at Texas Diversity Fund– Equity crowdfunding platform with a focus on encouraging diversity in entrepreneurship.

Backed Secures First Institutional Debt Capital (PR Newswire), Rated: A

Backed, the online lending platform that has digitized co-signing of personal loans, today announced it has finalized its debt financing deal with Israel’s largest financial institution, Harel Insurance and Finance. Harel has also participated in Backed’s extended seed round, and has become a lead equity investor. Backed and Harel are setting up an independent special purpose funding vehicle for financing its growing loan portfolio.

Backed was founded with the mission of helping individuals with thin or no credit history gain access to fair loans. Its unique co-signing mechanism is fully digitized, and allows the Backer (co-signer) to keep track of the loan progress and to step in to cover missing payments if necessary. Backing is designed to help borrowers and Backers avoid defaults, rather than impose added risk on the co-signers. Simultaneously, the co-signing model allows Backed to offer competitive returns to its investors, with reduced risk due to its co-signing mechanism.

LendingHome Launches One-Stop Online Mortgage for Digital Natives, by Digital Natives (VentureBeat), Rated: A

LendingHome’s online mortgage is the first to prioritize the customer experience by putting control over the process into the hands of the homebuyer. While the first wave of digital lenders brought the old-school paper mortgage application online, retrofitting it to be accessed via the Internet, much of the process is still controlled by the lender offline and is opaque and confusing for the homebuyer. In contrast, LendingHome has created the next-generation digital mortgage that gives homebuyers confidence and control over the process with a dynamic, interactive online experience. It also offers a faster, simpler, and more transparent mortgage process than the outdated paper-laden methods still used by many lenders.

It gives homebuyers confidence and control over the process with a range of loan options, innovative features, and trustworthy resources to choose from. It includes the ability to:

  • Select the right loan for your needs anywhere, anytime: Borrowers can select from a range of loan products at competitive rates. Using LendingHome’s Trade Points tool, they can configure the loan that’s best for their needs without wasting time going back and forth with a loan officer.
  • Lock your rate with the click of a button: Online rate lock allows borrowers to capture available rates in real time without the worry of missing out because the market moved.
  • Get guidance right when you need it: An educational hub offers advice on complex topics like debt-to-income and loan types. Extensive in-product tips and education are available exactly at the time they’re needed to help throughout the application process. While it’s easy to complete the mortgage process online, LendingHome has personalized loan specialists available to talk to borrowers via phone or chat when needed.
  • Know what to expect and do at every step: A personalized dashboard lets borrowers know exactly what documentation they’ll need to provide, without the headache of fielding last-minute piecemeal requests via email and phone. A Milestone Tracker lets them know exactly where they stand in the mortgage process and what comes next.
  • Stay on the same page with your real estate agent: A Loan Tracker tool enables borrowers to seamlessly share the progress of their loan with their real estate agent or partner.

LendingHome’s home financing solution is available at www.lendinghome.com/home-loans to homebuyers in Arizona, California, Colorado, Florida, Georgia, Nevada, Oregon, Texas, and Washington, with more states to be added in the coming months.

There are 15.8 million homebuyers — many of whom are tech savvy — expected to enter the market from 2015 to 2025, according to research from the book. Today, forty-seven percent of homebuyers are first-time buyers, and half (50 percent) are under the age of 36. They have a median age of 33 and nearly six in 10 are Millennials (56 percent) per a recent survey by Zillow Group. Per the same survey, the majority of homebuyers, 87 percent, use online resources to search, shop and purchase their home.

Fueled by Rocket Mortgage, Detroit-Based Quicken Loans Achieves Record-Breaking Year (PR Newswire), Rated: A

One year after Quicken Loans’ Rocket Mortgage Super Bowl ad ignited a nationwide conversation about the power of the American homebuyer, the largest FinTech lender funded $7 billion of its record $96 billion in total closed loan volume in 2016 through Rocket Mortgage. In just 11 months Rocket Mortgage’s closed volume alone would already rank as a top-30 national mortgage lender, among the nearly 50,000 banks, credit unions, brokers and mortgage companies in the United States.

Monroe Capital Corporation BDC Announces Fourth Quarter Financial Results (NASDAQ), Rated: A

Monroe Capital Corporation (Nasdaq:MRCC) (“Monroe”) today announced its financial results for the fourth quarter and full year ended December 31, 2016.  The Board of Directors of Monroe also declared its first quarter dividend of $0.35 per share, payable on March 31, 2017 to stockholders of record on March 17, 2017.

Fourth Quarter 2016 Financial Highlights

  • Net investment income of $5.4 million, or $0.32 per share
  • Adjusted Net Investment Income (a non-GAAP measure described below) of $5.8 million, or $0.35 per share
  • Net increase in net assets resulting from operations of $7.5 million, or $0.45 per share
  • Net asset value (“NAV”) of $240.9 million, or $14.52 per share
  • Paid quarterly dividend of $0.35 per share on December 31, 2016

5 female founders shaping the future of fintech (Built in NYC), Rated: A

Alexa Van Tobel launched LearnVest in 2009 with the mission of making financial planning affordable and accessible.

Sallie Krawcheck, a former titan of finance at companies like Citigroup and Bank of America, launched Ellevest in 2016 with the mission of closing the gender investment gap. The robo-advisor works to help women secure their financial futures by taking women’s unique life attributes — such as longer lifespans, different salary curves and more frequent career breaks — into consideration.

A former McKinsey consultant, Jennifer Fitzgerald cofounded PolicyGenius to fill a  gap in the insurance industry.

Vicki Zhou, who previously held roles at Citigroup, SFC Associates and Archipelago Capital Management, launched the company in 2013 with Herbert Moore. WiseBanyan’s platform provides users with tailor-made financial plans by recommending and managing an assortment of bonds and stocks, which users can then track, add to or withdraw from.

Orchard Platform is a marketplace lending platform that helps institutional investors, investment managers and loan originators connect and transact. Angela Ceresnie co-founded the company in 2013 with Matt Burton, David Snitkof, Jonathan Kelfer and Phill Rosen.

Want to start a mortgage company? loanDepot CEO updates thoughts on barriers to entry (Housingwire), Rated: B

Hsieh said last year that regulation was a barrier to entry into the business. People are eye-balling entering the mortgage industry because of $9 billion of untapped potential market share, Hsieh said at the time.

Now a year later, Hsieh added to it, stating technology is now a new barrier to entry — no longer just capital and regulatory obstacles.

And there’s data to back his claim. The Mortgage Bankers Association forecasts$1.63 trillion in total mortgage originations in 2017. So it’s true that more people want in, but greater investment in technology is becoming an ever-increasing necessity.

Citi names Piazza permanent head of fintech unit (American Banker), Rated: B

Citigroup on Thursday announced that Yolande Piazza will serve as the permanent head of its fintech unit.

Piazza had been serving in that role on an interim basis since August, when the previous chief executive of Citi FinTech, Heather Cox, left for a role with USAA.

Kabbage, Arcadia price pair of MPL deals (Global Capital), Rated: B

Sole lead Guggenheim increased the deal size of the Kabbage offering from $500m to $525m before pricing on Wednesday.

The $388.8m ‘A’ notes were priced at 275bp over swaps, while the $83.3m ‘B’ notes were priced at 400bp over swaps. The $27.7m ‘C’ notes and the $25m ‘D’ …

East Bay real estate investor crowdfunds purchase of San Jose tech park (Biz Journals), Rated: B

The Hellyer Oaks Technology Park in San Jose has been acquired by Walnut Creek-based Vertical Ventures, but the sale was funded partially by a real estate crowdfunding tool called CrowdStreet.

United Kingdom

UK’s biggest peer-to-peer lender introduces investor waiting list (AltFi), Rated: AAA

Zopa, the oldest and largest peer-to-peer lending platform in the UK, has introduced a waiting list for new investors on the platform. The new setup applies to both institutional and individual investors, and follows on from the “platform limit” which was introduced in December.

The newly introduced waiting list is an attempt to place a greater weight of emphasis on existing investors, by moderating the on-boarding of new customers. Zopa doesn’t yet know how long the waiting list will be, but says that it will try to manage it such that it’s never too long.

Of course, this wouldn’t be an issue at all if originations were outstripping investments. It would appear that Zopa is overweight investment at the moment.

RateSetter’s investors embrace new provision fund rules (P2P Finance News), Rated: AAA

RATESETTER’S investors have widely endorsed changes introduced to the provision fund, as hardly any of them have used the one-month window to withdraw their funds without an exit fee.

The peer-to-peer finance firm updated its lender terms in early February, one month ahead of changes to its provision fund to address concerns that it was “too binary”.

The average amount invested has now ticked up to over £22,000 – a 0.6 per cent month-on-month increase that also confirms investors feel comfortable with the platform’s strategy.

European Union

How Brexit could help Berlin take London’s fintech crown (MarkeWatch), Rated: AAA

When it comes to Brexit’s winners and losers, Berlin looks set to snag a few victories — especially the city’s growing financial-technology sector.

A rolling billboard (“Keep calm and move to Berlin”) is one of the stunts that have ruffled British feathers.

But Berlin’s gains might not come from a Brexit-driven exodus — that is, from U.K.-based technology companies abandoning their homeland. Instead, its fintech scene will benefit from U.S. and Asian businesses actively choosing Berlin, and not London, as their EU base.

That at least is the prediction from Stefan Franzke, CEO at Berlin Partner, a business development agency. He estimates that Berlin is home to roughly 80 to 100 fintechs and expects that number to double by late 2018.

To be sure, Londoners have played down the Brexit threat to the U.K. capital’s fintech crown.

At the same time, Germany is already catching up, by some measures. Funding inflows for the country’s fintech sector totaled $421 million in last year’s first three quarters, topping the U.K.’s $375 million, as shown in the chart above from accounting giant EY.

But London’s fintech scene is going to be hard to overtake, given advantages like the U.K. capital being a top financial hub and the English language serving as the business world’s lingua franca nowadays.

Latvia’s largest crowdfunded RE dev project – 950,000 euros fully funded in less than 24 hours. (Crowdestate Email), Rated: AAA

A residential real estate project located at Saules Aleja 2A in Riga, Latvia was fully funded on Crowdestate.eu crowdfunding platform. This was the single largest crowdfunding campaign in Latvia for a real estate development. The project is managed by Crowdestate and advised by a leading Estonian residential developer Hepsor OÜ.

The development project will include the purchase of a land plot and the construction of a residential building next to a park and a beautiful pond in the highly sought after Agenskalns neighborhood. In less than 24 hours, 769 investors from 23 countries all over the world participated in funding this project, reaching the record breaking amount of 950 000 euros.

The investment opportunity offers an IRR of 20.46% per annum.

On crowdestate.eu platform anyone can be an investor, with the minimum investment starting from 100 euros. The largest amount invested into the Saules Aleja 2A project was 30 000 euros and the average investment per investor was 1 297 euros.

Fellow Finance P2P Lending – My Portfolio and Strategy (P2P-Banking), Rated: AAA

Fellow Finance is a p2p lending marketplace in Finland. It started 2013 with loans to Finnish consumers, and later added Polish consumer loans and loans to Finnish SME’s. Since launch more than 100 million EUR in loans were funded.

I currently invest only in Finnish consumer loans and concentrate on 3 and 4 star loans for which the market rates are currently 13% and 15%. The Finnish consumer loans are covered by a buyback guarantee of 70%, meaning in case they are 90 days overdue, they will be sold for 70% of outstanding principal to a collection agency.

The market rates do fluctate sometimes at +/- 1%, and I felt it necessary to tweak the rate of my allocator then to keep it bidding (at the best possible rate). Fellow Finance is one of the very few platforms, where investors can configure the autoinvest to buy on the secondary market, but I have not used that.

Overall the website – which is available in english language – is good, only sometimes a tad slow to respond.

 

China

WeiyangX Fintech Review (Crowdfund Insider), Rated: AAA

Last week, the National People’s Congress (NPC)and Chinese People’s Political Consultative Conference (CPPCC), the country’s top legislative and political advisory body, opened the 2017 sessions in Beijing.

And this year, “Fintech” was once again named as the top keywords of “Two Sessions”:

(15 Top Keywords of 2017: artificial intelligence, virtual reality, Internet+, sharing economy, blockchain, Fintech, content industry, Internet healthcare, automatic drive, platform era, innovation, institutional improvement for internet, information safety, digital economy and smart city)

Ping An Bank is planning to provide third party depository service for P2P online lending platforms.

Here are some main points of the measures:

  • Actual controllers of P2P online lending platforms must be government, large state-owned enterprises, main-board listed companies, small and medium enterprise board listed companies, or financial institutions with licenses from China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission or Ministry of Human Resources and Social Security;
  • Platforms must be in operation for more than a year without any negative press reports, and monthly turnover should exceed 100 million yuan;
  • Platforms should market their depository cooperation with Ping An Bank truly and objectively;

On March 2nd, Wanda Group and China UnionPay officially announced a strategic co-operation. The two sides will develop cutting-edge financial technology to promote the application of intelligent transaction and smart service in commercial scenarios.

On March 2nd, Fintech platform Xiaoying Financial secured 1 billion yuan in Series B funding. The new investors include Suzhou Goldmantis Group, the Industrial Fund of Jinke Entertainment, Shanghai Urban Real Estate Holdings Company, Bo Nian Kang Health Management Group and more.

On March 2nd, prepaid card company Jiangsu Ruixiang announced it had ceased cooperation with more than 50 Lotte Mart stores in Jiangsu provinces.

Asia

Dubai Regulator Signs FinTech Pact with Singapore’s Central Bank (Cryptocoins News), Rated: A

The Monetary Authority of Singapore (MAS) and the Abu Dhabi Global Market (ADGM) have signed a cooperation agreement to develop and nurture Fintech innovations and entrepreneurs in both countries.
Dubai is certain to benefit from the agreement with Singapore, the latter arguably established as Asia’s and one of the world’s leading Fintech hubs.
Notably, the two authorities will also collaborate on projects that explore the possibility of technologies such as blockchain and distributed ledger technology (DLT), digital and mobile payments, big data and more.

P2P lending changes the finance game (Manila Bulletin), Rated: B

First to be introduced and gained traction in the United States and Europe, this method called peer-to-peer or ‘person-to-person’ (P2P) lending paves the way to democratize the lending while keeping it credible and very secure.

There are less requirements needed compared to the traditional money-lending process. What attracts the borrowers are the low interest rates and the minimal requirements, while the convenience and safety attracts the lenders.

Caribbean

Bid to change loan services (Nation News), Rated: AAA

Carilend Ltd officially launched its peer-to-peer (P2P) lending website last week, introducing a process that matches lenders (who can lend from $2 500 up in $25 increments) directly with borrowers (who can borrow from $2 500 to $50 000 in $25 increments, subject to credit referencing and scoring).

Carilend officials said theirs was the first P2P lending site in the Caribbean “aiming to bring together borrowers and lenders to give a better deal and a better experience to both”.

Authors:

George Popescu
Allen Taylor

P2P vs Marketplace Lending: take away from London event

P2P vs Marketplace Lending: take away from London event

On Wednesday, December 7th Lending Times in partnership with Zopa organized a panel on the differences and similarities of the industry in the two geographies. I believe two things stood out in particular which I would like to report here. P2P vs Marketplace One of the first questions to the panel was why is the […]

P2P vs Marketplace Lending: take away from London event

On Wednesday, December 7th Lending Times in partnership with Zopa organized a panel on the differences and similarities of the industry in the two geographies.
I believe two things stood out in particular which I would like to report here.

P2P vs Marketplace

One of the first questions to the panel was why is the US more focused on the marketplace with institutional capital while the UK more focused on p2p. And the answer was very surprising: it is mostly due to historical choices, which had as indirect consequences these sources of capital.

Apparently when Zopa started they were focused on super prime borrowers with a 6-7% interest, 1% default and a net yield of 5%. Despite their efforts, institutions will not lend for such a low yield unless they saw a 7 or 8 years track record. So they had no choice but to focus on retail capital. And please see below about how they acquire p2p lenders, as it is certainly un-expected.

On the other side of the Atlantic, Prosper, when it started, was mostly focused on APRs of 30 to 40% for sub prime borrowers. So despite the high default,  the high resulting yields, at least on paper, were attractive enough for them to attract institutional capital quite easily.

And this is why the business models in the US and the UK are so different. Zopa at this time relies on about 1/3 of institutional capital. And Prosper and Lending Club closer to about 2/3 institutional capital.

The question now becomes can a company be profitable in a pure p2p lending model ? The panel has explained that Zopa was profitable in 2011 and 2012, mostly because it had no choice and starting November 2016 it is once again profitable despite a large overhead and thanks to a much larger origination volume.

But how can a p2p lender be profitable given the apparent cost of lender acquisition in a p2p model ?

$0 cost of lender acquisition

A simple calculation will show that if one lender needs $1bil in lending capital in the p2p model , with an average of $10,000 per lender, the company needs 100,000 lenders. And what would the cost of lender acquisition be per lender ?

The panel present at the event pointed out that Zopa is not spending a single GBP on acquiring retail lenders on the platform.  In other words, their cost of lender acquisition is $0. The panel explained that at first Zopa had tried a lot of different ways to acquire lenders but none of them turned out to be cost effective. And they are now, 12 years later, only relying on word of mouth recommendations.

The other side of the coin, and given their experience that marketing to lenders doesn’t work, is that in the panel’s eyes companies who spend money on acquiring p2p lenders will waste a lot of money and will not acquire any.

But there is one small trick that aspiring p2p lenders have to keep in mind: the retail lender, will first want to test the waters with a very small amount. An amount that is not threatening at all. And it has been strongly suggested that the amount should be around $100 or 100GBP. So if you have a p2p lender program, please keep that in mind.

George Popescu

Your comprehensive guide to the all new ‘Upstairs Downstairs’ London property market

Three months down the line, enough time has passed to properly assess the impact of Brexit on the London property market.

Continue reading: Your comprehensive guide to the all new ‘Upstairs Downstairs’ London property market

Three months down the line, enough time has passed to properly assess the impact of Brexit on the London property market.

Continue reading: Your comprehensive guide to the all new ‘Upstairs Downstairs’ London property market