P2P lending was born out of unsecured lending between individuals. The ticket size was usually a few thousand dollars. In a sign of how much the market has evolved, fintech lenders now cover commercial real estate loans with ticket sizes ranging from $1 million to $20 million. This evolution is being led by a host […]
P2P lending was born out of unsecured lending between individuals. The ticket size was usually a few thousand dollars. In a sign of how much the market has evolved, fintech lenders now cover commercial real estate loans with ticket sizes ranging from $1 million to $20 million. This evolution is being led by a host of players with RealtyMogul, Sharestates, Patch of Land, and Money360 dominating their respective niches.
Money360 is an online marketplace for commercial real estate loans and caters to both institutional as well accredited retail investors. They secure the property with a first priority lien against income-producing commercial real estate, and, for the borrower, they focus on bringing convenience, speed, and reasonable commercial terms to the deal. Along with this, they run an investment management company, M360 Advisors, which manages diversified fund vehicles for institutional and accredited retail investors.
Money 360’s Background
Co-founder Evan Gentry started MoneyLine Lending Service, a mortgage lending company that transitioned into a mortgage tech company. The company was sold to Genpact, a spinoff from GE. He then started G8 Capital in 2007, a private real estate investment firm specializing in the acquisition of commercial real estate and non-performing loans. The company made most of the real estate meltdown in 2007-08 and bought non-performing residential as well as commercial loans. From 2007-2014, the company acquired distressed assets (major commercial real estate loans) worth $800 million. As the market has normalized, the company stopped acquiring further loans.
Gentry and his partner Daniel Vetter founded Money360 in 2010. It was a logical step forward considering Gentry had ample experience in mortgage, real estate, and investments, as did Vetter, a veteran of PIMCO and alumnus of Harvard Business School. After closely studying the business models of LendingClub and Prosper, and beta testing it on the real estate market, they zeroed in on commercial real estate bridge loans.
How Money360 works
In the beginning, they would source commercial projects that needed funding and potential investors who wanted to invest in the project; for instance, 10 investors pitched in for a $5 million loan. This model was not scalable and they shifted their focus into selling loans to whole loan buyers. In order to attract accredited retail investors, Money360 needed a more refined and sophisticated product; they needed to be diversified across multiple loans. Inspired by LC Advisors, they launched M360 CRE (a commercial real estate income fund), which was launched last year and is on track to achieve a fund size of $180 million this month.
The company does not crowdfund its loans. They either buy loans through the fund or partner with whole loan buyers like federal credit unions and banks.
Products and performances
Money360 has two primary products:
Bridge Loan – Available for commercial real estate for a maximum of two years. Returns range from 8%-10%, loan-to-value (LTV) is usually 65%-70%, but in some cases can go up to 80%. Loan size is between $1 million to $20 million and, to safeguard its interests, Money360 holds the first lien position. The company did $45 million in loans in April and in the process broke its monthly record. The secret behind its success is a well-executed business model. Though they leverage technology for underwriting and processing, origination and due diligence are still performed using traditional models. Money360 have eight development officers who work with local borrowers and brokers around the country. By the end of the year, the company wants to cross the elusive $100 million per month mark.
Permanent Capital – They also offer competitively-priced 7-10 year loans, which are funded in-house and then syndicated to banks and credit unions.
The Money360 Difference
The team at Money360 is immensely experienced, and that is proving to be a difference maker in the highly competitive commercial loan market. The CTO has over 20 years experience in mortgage technology and, with his expertise, the company has developed technology that allows them to accelerate the underwriting and closing process as well as streamline the entire back-end process. This allows investors and whole loan buyers to track details of every single deal in a detailed manner.
Another difference is the reputation of management. Unlike other players in the industry, the company and its founders have a proven track record of scaling up companies into multi-billion dollar entities. Because of that, it is easier for the company to attract investor interest as compared to competitors.
Compliance & Investors
Accredited retail investors own the real estate loans through a REIT structure, which gives them diversification across all loans in the fund. They use marginal leverage and are able to provide returns of 8%-10%. Money360 have been able to attract influential institutional investors and have one of the largest banks in South Korea as an investor in the fund.
The company expects to become the market leader in the commercial loan segment in terms of origination by the end of the year. After successfully carving its niche in the market, the company is now looking for strategic partnerships to extend its dominance.
Considering commercial real estate is a multi-trillion dollar market, fintech startups represent a very small fraction. Most of its competitors deal in crowdfunding whereas Money360 specializes in being a direct lender. This difference is a major competitive advantage as it shortens the time period for processing and allows for more flexibility to the borrower. Also, competitors mainly focus on fix-and-flip real estate. Having already fixed and flipped 4,000 residential properties in G8, they know it is a cyclical market, which is why they are concentrating on stable and more permanent commercial loans.
Even Realty Mogul, one of the most famous online real estate crowdfunding marketplace, prefers equity over debt funding, or, in some cases, both types of funding are done. This is fine as long as project/asset is performing, but in the case of a non-performing asset/project, a conflict of interest arises between equity and debt holders.
Money360 is headquartered in Ladera Ranch, California and has a team of 30 people. The company has the benefit of a hugely experienced founding team coupled with a razor sharp focus on what it does best. The company’s focus limits its reach, but the niche it has chosen is a trillion dollar market, which it is clearly dominating.
News Comments Today’s main news: SoFi wants to steal banks’ most coveted customers. Biggest online lenders don’t always check key borrower data. Fed issues FOMC statement. RateSetter puts aside George Banco partnership. Alibaba’s first fintech investment in Hong Kong. Investree enters Vietnam. Today’s main analysis: How fintech startups are transforming banking in Indonesia (A MUST-READ). Today’s thought-provoking articles: Real estate […]
SoFi on the way to stealing banks’ most coveted customers. AT: “There’s really nothing new about this. SoFi hasn’t made it a big secret that they want to take on banks. The audacity of CEO Mike Cagney forcing banks to change their business model is still worth noting even after being stated thousands of times. The interesting thing here is that Mad Money host Jim Cramer says if BofA or Citi had the Internet when they started, they’d be doing it like SoFi is doing it now. That’s a serious poke.”
SoFi is drawing flames from activists. AT: “Any disruptor is going to spark some heat. The fact that this is happening in the financial sector–people get antsy when their money is at stake–is the, ahem, cool part. Banks will change, but they may not like it. Pass the queso, please.”
Don’t look now, but the ‘in your face’ fintech firm, SoFi, is moving from offering just student and personal loans to providing wealth management and opening checking accounts. And their target market is one of the most coveted by banking … the educated, affluent, digital-first Millennial.
In an interview with Mike Cagney, “Mad Money” host Jim Cramer said, “If Bank of America or Citi had the Internet when they were forming, this (the SoFi model) is what they would have started.” Cagney responded saying, “Absolutely. I think what’s going to happen is the banks are going to move toward our model over time. And we certainly don’t have the hubris to expect that we’re going to change all of banking, but we are going to drag them into a different kind of service model. One that’s a lot more aligned to the customer.”
The company is also developing financial planning services, which it expects to launch this summer. These include joint financial planning for couples and first-time home buying.
“If you look at SoFi, we run over 65 percent contribution margin across our three lending businesses. We’re the most profitable fintech company in the marketplace. And there’s huge opportunity to expand from that, and it comes down to cost of acquisition. If you build really strong brand, really strong evangelism, really strong what I call ‘cross-buy,’ you can drop that cost of acquisition significantly and that drives margins,” Cagney said.
In its early days, Social Finance made loans only to borrowers who had attended name-brand universities. Graduates of elite colleges were paying relatively high interest rates on federal student loans even though they represented a low risk, and the Silicon Valley startup saw in that mispricing a chance to make money.
SoFi CEO Mike Cagney noted in a 2013 interview that traditional banks were aware of this opportunity but were unwilling to pursue it.
Back in 2012, I borrowed money to purchase a house I planned to fix-and-flip. I contributed 20% of the purchase price as a down payment. For the privilege of borrowing the other 80%, I paid a local “hard money lender” a 3.5% origination fee plus interest only payments at a 13% APR.
I started doing some more research into the market that was originating a majority of these types of fix-and-flip loans, which is called “hard money lending”. There were a few things that became quickly apparent to me.
The market was highly-fragmented. There wasn’t a single lender that controlled any significant amount of the national market.
The use of technology was virtually non-existent. The ability to apply online for a hard money loan didn’t exist. The lender I borrowed from didn’t even have a website.
Capital formation was very analog. This put them in a perpetual cycle of originating new loans to keep their funds working while also raising additional capital to meet the demands of their borrower base.
Hard Money Lenders, generally speaking, had a very negative reputation among the borrower community. This was in part due to the high interest rates. However, upon further digging, the real cause of dissatisfaction among borrowers was the lack of service and transparency.
Much like the early days of peer-to-peer lending, the new online real estate originators won business by providing a better borrower experience. Online applications with instant feedback on pricing and terms provided better transparency to borrowers. Quick funding decisions that are augmented by large data sets, rather than relying 100% on appraisals, allows these new lenders to provide more certainty around closing. Online dashboards where borrowers can order construction draws and make interest payments make the loan servicing experience easier for the borrower. Regardless of the financial innovation that is to follow, these technology platforms have improved the level of service provided to borrowers.
That said, the five largest online originators still only write between 5-8% of the total loan volume in the fix-and-flip market. We are still in the very early days of what is likely to be a massive consolidation of a previously fragmented market.
Prosper Marketplace Inc. doesn’t verify key information like income and employment for around a quarter of the loans it makes, according to documents tied to bonds that Prosper sold last month. LendingClub Corp. said it only verified income about a third of the time for one of the most popular loans it made in 2016, according to company data seen by Bloomberg. If either lender finds mistakes in a borrower’s application, such as overstated income, they may still go ahead with the loan, according to disclosures linked to bond sales from the companies, including documents for securities that LendingClub is offering now.
Online loans usually don’t have collateral, so when they go bad, investors can lose out. Traditional consumer finance companies and banks tend to check incomes and employment on closer to 100 percent of new customers before making these kinds of loans, according to industry executives. Online lending competitor Social Finance Inc. checks income on 100 percent of its borrowers, according to a report from Kroll Bond Rating Agency.
Investors in LendingClub loans earn average annual returns of around 4.3 percent, about three percentage points higher than the yield for two-year U.S. Treasuries. Those kinds of returns helped nonbank startups arrange more than $36 billion of loans in 2015, mainly for consumers, according to a report from KPMG.
LendingClub verified income on 35.6 percent of one of its most popular types of loans in 2016, according to company data obtained by Bloomberg. That figure has bounced around over time: it was 16 percent in 2008, and 47 percent in 2013.
LendingClub has had to write off a growing percentage of its loans — 8.5 percent, annualized, in the first three months, compared with 5 percent the same quarter a year ago.
Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have moderated but have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending has picked up in recent months, and business fixed investment has continued to expand. On a 12-month basis, inflation has declined recently and, like the measure excluding food and energy prices, is running somewhat below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.
In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1 to 1-1/4 percent.
The SEC says many financial advice firms are falling short when it comes to cybersecurity, with investment advice firms being less prepared than broker-dealers, Reuters writes.
As part of its second stage of cybersecurity exams initiated in 2014, the SEC analyzed 75 firms and found that 26% of the companies don’t conduct risk assessments on a continuous basis and 57% of the firms fail to carry out vulnerability and penetration tests with simulated attacks on critical systems, according to the newswire.
The SEC has concluded that investment advice firms have had more issues with cybersecurity than broker-dealers, according to the newswire. On the other hand, the SEC learned that almost all investment advisors practiced regular system maintenance as part of their cybersecurity process, namely by consistently installing security patches, Reuters writes.
Only 4% of the companies examined were missing essential patches or updates, according to the newswire.
On June 2, 2017, representatives of the Company provided us with a computer-generated unsecured consumer loan data file containing data, as represented to us by the Company, as of May 24, 2017, with respect to 29,806 unsecured consumer loans (the “Statistical Loan File”). At your instruction, we randomly selected 125 unsecured consumer loans (the “Initial Sample Loans”) from the Initial Statistical Loan File using the following criteria provided to us by the Company:
3 unsecured consumer loans with a seller identified as “Seller #1” on the Initial Statistical Loan File;
21 unsecured consumer loans with a seller identified as “Seller #2” on the Initial Statistical Loan File;
1 unsecured consumer loan with a seller identified “Seller #3” on the Initial Statistical Loan File;
23 unsecured consumer loans with a seller identified as “Seller #4” on the Initial Statistical Loan File;
15 unsecured consumer loans with a seller identified as “Seller #5” on the Initial Statistical Loan File;
62 unsecured consumer loans with a seller identified as “Seller #6” on the Initial Statistical Loan File;
In addition, on June 13, 2017, representatives of the Company provided us with a computer-generated unsecured consumer loan data file containing data, as represented to us by the Company, as of May 24, 2017, with respect to an additional 4,203 unsecured consumer loans (the “Subsequent Statistical Loan File”). At your instruction, we randomly selected 8 unsecured consumer loans from the Subsequent Statistical Loan File with an origination date (as set forth on the Subsequent Statistical Loan File) on or before March 31, 2015 (the “Subsequent Sample Loans”). The Initial Sample Loans and the Subsequent Sample Loans are collectively and hereinafter referred to as the “Sample Loans”
Ingo provides risk-management services to financial institutions, such as banks and payment networks. Investors include Baltimore-based Camden Partners, Philadelphia-based MissionOG, and Bethesda, Md-based CNF Investments.
Notice of Class Action Settlement (Google AdWords Email), Rated: A
In Re Google AdWords Litigation, No. 5:08-cv-03369-EJD
U.S. District Court Northern District of California
A $22,500,000 class action settlement has been preliminarily approved by the U.S. District Court for the Northern District of California, in the case In Re Google AdWords Litigation, No. 5:08-cv-03369-EJD. Your rights may be affected and you may be entitled to a portion of this settlement if you are an eligible Class Member.
Who Is Included in the Settlement?
You may be a Class Member if during the period of July 11, 2004 and March 31, 2008, you: 1) were a U.S. resident; 2) had a Google AdWords Account; and, 3) were charged for clicks on advertisements appearing on parked domains or error pages.
What Is This Case About?
This case alleges that Google failed to disclose to its AdWords customers that it placed ads on websites known as parked domains and error pages. The lawsuit alleges this conduct violates California laws against unfair competition and false advertising. Google denies these claims.
The Court will hold a Final Fairness Hearing on July 27, 2017 at 9:00 am PST at the following location: U.S. District Court for the Northern District of California, San Jose Courthouse, Courtroom 4 – 5th Floor, 280 South 1st Street, San Jose, CA 95113. At this hearing, the Court will consider whether: 1) the settlement is fair, reasonable, and adequate; 2) to approve the service awards to the class representatives; and 3) to approve the award of attorneys’ fees and expenses to the attorneys for the class.
Under newly confirmed Chairman Jay Clayton, the SEC is setting its sights on expanded protections for retail investors, planning a series of RIA sweep exams exploring areas like robo advisers and money market funds.
Slated to launch this year is an exam sweep looking at how firms are deploying robo advisers, or using automated services to augment the provision of investment advice.
Levine said that the sweep will likely run along the lines of the guidance on digital advice platforms that the SEC issued in February, when it affirmed that robo advisory services still have a fiduciary duty, and warned of potential issues around disclosure and client communications.
Also this year, the SEC is planning to launch a sweep looking at how firms that traffic in money market funds are incorporating the rules the SEC adopted to shore up that sector following the destabilizing run in 2008.
As part of a broader focus on retail investors saving for retirement, the commission is also planning to launch a sweep exam looking at how firms are adhering to the schedules laid out in the disclosures of target-date funds, and another probing the controls advisers have in place on fixed-income cross trading relating to retirement accounts.
Today, we’re excited to announce that the Chan Zuckerberg Initiative (CZI), has invested $5,000,000 to create a Landed down payment support fund that will make it easier for educators in the Redwood City, Ravenswood City, and Sequoia Union High School districts in California — districts which face some of the highest housing costs in the country — to buy homes.
Eligibility: Any district or public school employee within the boundaries of Sequoia Union High School District, Redwood City School District and Ravenswood City School District.
Support: Up to half of a down payment (max $120,000), for the purchase of a primary residence.
Terms: Participants share up to 25% of the appreciation (or loss) in the price of the home upon sale, or after 30 years, whichever is sooner. There are no monthly payments.
Other: Participants can choose to end their relationship with Landed at any time. Financial coaching support will also be made available to participants.
AutoGravity, a FinTech pioneer on a mission to transform car shopping and financing, has announced the launch of real-time inventory on the Fletcher Jones Drive (FJ Drive) smartphone app powered by AutoGravity. Car shoppers now have access to the largest selection of Mercedes-Benz inventory in the nation, a seamless auto financing application and Mercedes-Benz Financial Services offer presentment – all in the palm of their hand through the AutoGravity powered FJ Drive app for iOS and Android.
AutoGravity joined forces with the Fletcher Jones Auto Group to launch FJ Drive, the nation’s first and only mobile app that allows customers to secure financing for any new Mercedes-Benz right on their smartphone. Real time inventory extends the partnership by empowering users to shop for specific vehicles sitting on the dealership lot. Guests can choose any Mercedes-Benz model and browse all available cars for their store of choice. Easy to use filters, including model year, body type and color, make finding cars simple and intuitive. Guests apply for financing and review their lease or loan offer in the app before picking up their car at the Fletcher Jones showroom.
Centana is hoping to differentiate itself from other venture capital firms by pursuing “workhorses” — essentially, companies that will help incumbent companies improve on existing business models, Cukier said.
Wealth Migrate, an online real estate investment marketplace, announces the global opening of its #LikeAMillionaire luxury condo give-a-way. The competition, which is open to all new users who sign up on the WealthMigrate.com platform, is another example of how Wealth Migrate is putting quality real estate within reach of middle class investors throughout the globe, who typically do not have access to these types of deals.
The Zero-2-One Tower, standing 42 stories tall, is set to be the tallest building in Cape Town upon completion in 2020.
The FinTech and InsurTech company IATAI Enterprises (IATAI), which specializes in making mobile transactions, communications and other interactions quicker and easier across platforms, has joined forces with the payment solutions enabler BPP to develop Handy U, a universal and customizable payment, rewards and insurance solution for consumers, businesses and merchants.
Handy U is a reloadable Visa virtual/digital account that enables IATAI’s travel and insurance clients to instantly make and receive payments, access benefits and redeem rewards generated by their loyalty programs. Handy U is hosted on IATAI’s digital wallet, onepocket, which lets users combine several payment methods in a single transaction, both online and in-store.
This Financial Poise webinar series explores the purchase of ownership shares in private companies via crowdfunding websites.
Episodes in the series address
the modes of angel investing in a company during its early stages,
the opportunities and perils of crowdfunding real estate investments,
the money-raising entity’s perspective and
a close look at crowdfunding options under federal and state law.
The 3rd episode of the “Equity Crowfunding” series is available now on demand! “Investing in Real Estate through Equity Crowdfunding Websites” (Register Here) features Moderator Chris Cahill of Lowis & Gellen. Chris is joined by Jordan Fishfeld of CFX Markets, Marty Coyne of Connected Investors Inc. and Lynda Davey of Avalon Net Worth.
FinMason, a Boston-based fintech and investment analytics firm, announced on Thursday the launch of its new fintech accelerating program, FinSpring, which is described as an initiative that will provide free access to FinRiver, a set of flexible and lightning-fast investment analytics APIs.
Last month, RateSetter announced it was entering a partnership with George Banco and acquiring an equity stake in the personal loan provider company. Unfortunately, RateSetter revealed earlier this month that it has decided to pull out of the partnership after all.
“We have subsequently decided not to go ahead with this new arrangement with George Banco. After further examination of the infrastructure required to do this, we concluded there were better uses of our development resources which may be deployed more effectively to source other borrowers. Therefore, we will not facilitate lending directly to George Banco’s customers, and accordingly we have updated our Principles of Lending document which sets out our lending criteria. The existing wholesale loans to George Banco will continue to be repaid in accordance with the schedule of the existing loan contracts. The total of these existing loans currently stands at £31.5 million.”
To see the updated Principles of Lending document, click here.
The top ten buy-to-let postcodes in England and Wales are evenly split between locations that voted for the Conservatives or Labour.
Luton has been identified as the best buy-to-let investment location across England and Wales, with an average yield of 4.54% and rental price growth of 7.37%.
According to LendInvest, which analyses data from Zoopla and the Land Registry to compile its Buy-to-Let Index, Stevenage is the best performing buy-to-let postcode out of areas that voted Conservative last week.
The Hertfordshire town has recorded capital gains of 11.64% and rental price growth of 7.5% over the last quarter.
Luton is the top performing Labour-voting postcode.
Assure Hedge, a provider of foreign exchange technology to protect businesses from currency fluctuations, has received a boost from the UK Financial Conduct Authority under a programme aimed at drawing financial technology (fintech) under its regulatory oversight.
Aiming to fix cash flow issues for companies operating in Hong Kong, Andy Chan along with his partner Winston Wong, set out on a mission to craft Hong Kong’s first invoice trading platform, Qupital.
Since its inception less than a year ago, the company has started to gain attention from companies including Chinese e-commerce giant Alibaba.
In terms of generating revenue, Chan shares that when an invoice is purchased, Qupital would take between 25-75 basis points of the total invoice value. Moreover, the company would take 20% of net gains made by funders.
With fresh capital from high-profile backers, Chan has his sights on deepening his business in Hong Kong with an eye on expansion to other markets in 2018 such as Thailand and Vietnam.
Baidu Inc. is among China’s tech giants looking to get a leg up in the competitive financial-services market. Credit-rating companies aren’t so sure it’s a good idea.
Fitch recently placed Baidu on negative watch, citing “significantly higher” business risks as it moves into making unsecured consumer loans and selling uninsured investments known as wealth-management products, which Fitch said are “part of the shadow banking system in China.”
Moody’s decided last month to place Baidu’s bond ratings on review for a downgrade, citing concerns over the firm’s short history in the financial-services business.
Baidu’s financial services, which also include its mobile payment platform, now account for about 12% of its assets, or 25 billion yuan ($3.7 billion)—representing rapid growth for a firm that formed its financial-services group only about a year ago. That has significantly changed Baidu’s credit profile, said Moody’s vice president and senior credit officer Lina Choi.
HSBC has its own tech teams designing new platforms and products, and they are absolutely brilliant. But we need to be humble and recognise that we don’t have all the answers. We invest in and work with fintech start-ups where we think they can help.
Our partnership with Tradeshift is making it easier for business customers to manage their accounts and their relationships with suppliers online, saving time and cutting down paperwork.
Retail customers in the UK can now download an HSBC SmartSave app, developed in partnership with a start-up called Pariti. It helps them save money without even having to think about it.
We have invested in a start-up which is developing technology that can sift through large amounts of financial transactions to pinpoint suspicious patterns. This will help us tackle financial crime more effectively, and, ultimately, keep our customers safer.
ASX-listed fintech zipMoney has put the finishing touches on its A$260 million debt warehouse with big four bank NAB and could become one of the few all-Australian fintechs to make a profit.
The money raised will go to the “immediate refinance of $70 million of existing receivables”, ZipMoney told the ASX, resulting in lower interest rates across the board. It will also allow the company to increase volumes and hire more staff.
ZipMoney provides a ‘buy now, pay later’ service, offering shoppers loans between $1000 and $10,000 for up to eight months.
An ASIC investigation found that between January 2011 and November 2012 Mr Hutchison dishonestly:
banked cheques he received from his clients for advice fees directly into his personal bank account, when he knew he was obliged to remit or report them to RI Advice. Mr Hutchison then deducted additional fees from his clients’ investment platform or financial product for payment to RI Advice; and
banked cheques he received from his clients for advice fees directly into his personal bank account and failed to record the receipt of the cheques on RI Advice’s payment system.
Mr Hutchison misled or deceived his clients by failing to disclose to them that they had been double charged advice fees and failed to comply with the proper process for remitting and reporting the fees. He also misled or deceived RI Advice by failing to disclose that he had deposited the advice fees into his own account and did not comply with RI Advice’s relevant fees policies and procedures.
SMC Capital and EPC developer REPL group have come together to launch a Rs 1,000-crore real estate fund, SMC IM Capital. The fund has already got commitments from global investors based in the US and Middle East and will look at a first close by end of this month.
The fund will invest between Rs 50 crore and Rs 80 crore in the middle segment affordable housing projects in tier I and II cities.
In India, real estate is the second largest employer after agriculture, and is slated to grow at 30% over the next decade. The real estate sector comprises four sub sectors — housing, retail, hospitality, and commercial.
Indonesian peer-to-peer (P2P) lending startup Investree announced on Thursday that it is set to begin expansion to Vietnam in 2018, DailySocialreported.
The Jakarta-based startup said it is currently undergoing the process of setting up a joint venture with an undisclosed local financial institution.
Investree also announced that it is going to launch a sharia-based lending service in July; the startup is currently on the process of applying for certification from the National Sharia Board (DSN).
Gunadi cited strong demand from both borrowers and lenders to set up a lending practice based on the Islamic law, and by far three small businesses from Jakarta and Surabaya have agreed to join in the pilot project.
India, November 2016. PM Modi launched a demonetisation drive to eradicate black money, fostering a new wave of digitisation in India. Consequently, there was a tremendous rise in the adoption of e-wallets, launch of new fintech startups, and the average Indian became familiar with a new financial entity, bitcoin.
From local grocery shops to petrol pumps to movie theatres, digital wallets have captured each and every day-to-day business which requires payments. Not only this, digital wallets have even seen a massive adoption for payment chores like booking air tickets or buying movie tickets or paying bills (DTH, Water, Electricity).
Be it digital payments, online lending, or remote banking, Indonesia has seen a surge of startups that have developed products to solve the current needs of the population.
At the same time, the country remains a challenging market for fintech industry to grow with only 40% of adults in the country having access to banks. 49 Mn SMEs unit are still not bankable, because of low credit score and little or no financial history.
It is estimated that only 40% of Indonesia’s 250 Mn populationcurrently have access to services provided by banks.
Thirdly, due to Indonesia’s peculiar geography, its traditional banking system suffers. The number of bank branches, which is estimated at 10 banks (branches) per 1,000 square kilometersis far too low to serve Indonesia’s vast geography.
The major areas that startups are capturing and disrupting are payments, insurance, stock markets, investments, PoS, comparison, and online lending. Major startups in the payments sector include Mandiri, T-Cash, PayPro, IPayMu, Xenditi among others.
Digital payments have become so big in the archipelago that the total transaction value in the “Digital Payments” segment amounts to $18 Mn in 2017. Additionally, the total transaction value is expected to show an annual growth rate (CAGR 2017-2021) of 18.4 %, resulting in the total amount of $36 Mn in 2021. Popular fintech categories in Indonesia are lending platforms, capturing 17% and marketplaces for financial products that have occupied 13%.
Deposits, Lending, And Capital Raising
The online lending space is dominated by players included Modalku, Taralite, and Investree. The online lending segment has a huge market demand in the country, owing to the fact that a major population of the country has a low credit score and SMEs can benefit from these alternative services.
Taralite: Launched in 2016, the startup sanctions financial loans with relatively low interest, starting from 1%, for education, marriage, childbirth, house renovation, vehicle purchase, property & housing. It also provides loans without collateral. It recently secured $6.3 Mn from Japanese financial services provider, SBI Group.
MODALKU: Founded in 2016, it is an online lending platform, that provides loans up to IDR. 2 Bn, with relatively affordable interest. Its focus areas are SMEs looking for working capital, with minimum one year of operations.
Cekaja.com: Launched in 2013, the platform allows users to compare various financial products at one place.
Investment & Risk Management
JOJONOMIC: JOJONOMIC digitises the entire employee reimbursement process for an employee.
RajaPremi: Founded in 2014, RajaPremi is an online insurance marketplace.
Bareksa: Founded in 2016, it is an online and integrated marketplace for mutual funds.
Kudo: Launched in 2014, the startup has a website and a mobile application that enables anyone to be an online entrepreneur without having to personally stock the items.
DOKU: A 2007 founded startup, Doku is the biggest player in the Indonesian payments scene. Functioning as an online and offline payment gateway for businesses and individuals, DOKU is an e-wallet equipped with links to credit card and electronic money.
t-cash: Founded in 2011, it is an electronic money service provided by Telkomsel (a telecom giant). Users are required to install the T-Wallet app on their mobiles and equip their mobiles with the t-cash stickers.
Ayopop: Launched in 2016, Ayopop is an app that specialises in bill payments.
POS (Point-Of-Sales Startups)
Pawoon: Launched in 2013, Pawoon is a cloud-based Point of Sales (POS) application for SMEs.
DealPOS: DealPOS is a cloud-based point-of-sale ( POS ), inventory and accounting software for business which was also launched in 2013.
Wondering in the halls of an incredible conference in Shanghai a few days later at LendIt Conference China, I was consumed with anxiety. Every platform I saw in China easily had 30 million plus active users. Whether it was credit, payment, insurance or investments, the conference in China was filled with eager entrepreneurs, seasoned executives and hunger investors.
Out of necessity, with a series of coincidences and a ton of luck I founded a company called MaxDecisions, Inc. with an old colleague and friend Henry Wang. We didn’t think too much of it and we didn’t really know where we will end up with it.
In the same month, I founded another company called Kuber Financial, LLC. and later Kuber Inc. with two other co-founders. Both of them left in the middle of the project, one early on and one late later year.
Fluid App came to me because I wanted to build something that’s truly different from all other platforms. A fun, mobile only, credit building product that could truly change lives of millions of young Americans. A FinTech, AdTech mesh up, that a lot of people are now starting to understand and appreciate my vision for this product.
With our 10th employee coming onboard at www.maxdecision.com next week, we’ve officially broke our first million dollars in sales.
June 14, Shenzhen Internet Finance Association, THE FINLAB PTE LTD and the Hong Kong Internet Professional Association in the World Youth Entrepreneurship Forum officially signed a tripartite cooperation memorandum, at the same time announced at the forum, Shenzhen – Singapore – Hong Kong Financial Technology Alliance was formally established.
Payments and remittances startups account for the majority of Africa’s over 300 fintech startups, though blockchain companies are the more likely to secure funding.
Payments and remittances is the most populated of nine sub-sectors addressed in the report, with 125 startups across the continent focused on making the process of sending and receiving money easier. Lending and financing – with 65 startups – is the next most popular category; indeed, over 60 per cent of all Africa’s fintech startups are focused on these two crucial spaces.
African blockchain startups are the most successful in percentage terms, with almost 40 per cent of the blockchain-focused startups on the continent securing funding.
The continent’s fintech startups have secured over US$92.5 million in investment since 2015, the report finds, while the data shows fintech startups are spread across the African continent. Southern Africa and West Africa are fintech leaders – with 34.2 per cent and 34 per cent respectively based in those regions respectively. South Africa has the most fintech startups (94), followed by Nigeria (74) and Kenya (56).