Analysis Featured

eOriginal – automatic due diligence for online lenders’ documents and data

There is a need to store and securely verify electronic asset documentation in a legally compliant manner which can be used, among other things, for securitization and to build investor credibility.

There are many companies like DocuSign and Adobe who have entered the digital signatures market and have been able to garner a respectable market share.  eOriginal Inc, founded in 1996 is the electronic original company®, it provides powerful electronic signatures and advanced electronic transaction solutions that help businesses protect the value and integrity of their contracts throughout their entire lifecycle using a proven rating agency-accepted compliant process.

eOriginal founded by an attorney

The company was founded by attorney Stephen Bisbee and private equity financier Gary Wood. It is headquartered in Baltimore, Maryland and has a team of 60 professionals. The firm has raised $6.5 mil in venture capital in 1999 and a further $2.35 mil in 2010. The first round was raised from GE Capital, Hat Creek Partners and Intel. The company has been doubling in revenue and employee count year-on-year for the last many years.

Full electronic mortgage transaction

eOriginal Inc was originally launched to create a full electronic mortgage transaction. The company specialized in electronic asset management after the documents had been electronically signed. The company originated the first e-mortgage in July 2000. But the slow regulatory speed in mortgage market forced them to pivot to other segments like lease finance and automotive finance. The first and foremost concept in digital transaction management is that of originality. It is imperative that the original can be reasonably distinguished from the copies. The SEC mandates that there should be a certified administrator who is taking control or possession of these original assets on behalf of the parties. Now in a physical world, control is very easy to define.

Who holds the electronic originals ?

Possession of the original signed document provides ownership/control to the holder of the document. In a digital world, eOriginal’s technology plays a crucial role in the post-execution management of financial asset documentation. When the final signature is applied to a document in the cloud, the company takes the version borrower is signing and pulls it out of the cloud and deposits into a server site closed system. This system is commonly referred to as an electronic vault or e-vault. The cloud gets a replacement copy of the original.  It also uses a watermarking technology to identify the copies. So if the originator of a loan wants to sell the asset to an investor; e-Originals vault will manage the chain of custody and control of the asset to streamline the transfer. The investor can also review the asset and perform due diligence. Once he agrees to buy the asset, the original copy would leave the control of the originator and go to the control of the investor. This entire transaction would create an audit trail which will help identify the who, when, where, why and how.

90% market share

eOriginals controls 90% of electronic document transactions in the automotive finance industry and has aggressively tapped the marketplace lending industry for managing its securitization assets. It has over a dozen of originators as clients and marquee players like FundingCircle, UpStart, Earnest and SoFi form its clientele. It has a SaaS revenue model i.e. it charges per transaction. The company has been able to onboard DocuSign and Adobe as resellers. Its dominance is underscored by the fact that 90% of electronic signature players resell its technology. It is E-Signature agnostic, its ethos being extremely flexible to the requirements of the originator so that they can enhance the user experience. The company is augmenting its software by an authentication function which will help in KYC especially for marketplace lenders. The organisation derives majority of its business from America but is looking to spread its wings to Asia Pacific and the United Kingdom.

 

eOriginals was launched 20 years ago to execute a complete e-mortgage and finally the digital infrastructure is in place via an E-Mortgage Registry System (EMRS). EMRS is used by Freddie and Fannie to approve E-mortgages and it has been complicated due to the requirements of titling, notarization etc all at one place. The SaaS player has recently launched an electronic mortgage solution to simplify the above process and is approved by Fannie to execute the same. The organisation is focusing on educating the potential clients to the benefits of the technology. Marketplace lending is the first port of call as it is already driven exclusively by online technology. The software is extremely adjustable and thus, it can be configured to rule-based compliance arising from different loan regulations passed by different states. As and when the client needs to comply, a system can build upon the existing software to help in accommodating the particular state’s law.

Head start

Due to its history, the company has a huge head start compared to its competitors. It has a huge data set of prior transactions and will be the industry leader in any attempt to standardize the system. This gives it a unique ability to attract clients and especially lending start-ups who want to make the process of onboarding a borrower/lender as seamless as possible. One standard platform will ensure that the process is not restricted to hedge funds but can be applied to non-accredited investors as well. The company has recently signed deals with both Accenture-owned Mortgage Cadence and the alternate lending start-up Payoff. The company’s proprietary technology will be a good fit for many tech players looking to find feet in the p2p industry. eOriginals should be a prime candidate for acquisition by a SaaS major interested in the fintech market.

Author:

George Popescu
George Popescu

About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( www.currencymountain.com ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

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