- Today’s main news: CreditEase Wealth Management announces new investments in US MPLs. Elevate heading toward IPO. Lendable secures 100M GBP investment. Relendex receives FCA authorization. Perpule raises $650K in India.
- Today’s main analysis: The state of fintech funding in five charts.
- Today’s thought-provoking articles: 41 people locked up for Baiyin Wealth P2P fraud in China. Bitbond, BitPesa partner in Africa.
- CreditEase Wealth Management invests in US MPL platforms. GP:” 2 new investments in OnDeck and LendingHome after Avant and Prosper last year. The $30min amount as equity is non negligeable. And with these 2 new investments CreditEase also diversifies the target audience from unsecured person to business and real estate. Most Chinese companies in my experience invest in brands and image so I am not surprised they picked the most famous companies in each market.” AT: “One of China’s biggest institutional investors is moving in on US turf. This is huge.”
- The state of fintech funding. GP:” The real story hear for me is that investments continue.” AT: “As the industry matures, investors will get better at identifying the winners. Only those companies with the most promise will see top funding.”
- Elevate is headed for an IPO. GP:” Elevate has 2 close companies to compare to : Yirenday and Lending Club. Their numbers are closer to Yirendai so I expect they will do well.” AT: “This is a second start in that direction. Let’s hope they pull the trigger this time.”
- Online retailers armed with free fraud prevention resource to combat data breaches. AT: “A great freemium offer.”
- Global Debt Registry to use TransUnion data to expand eValidationSM with online lending.
- ID Finance joins Mintos.
- A community banker’s ‘aha’ moment. AT: “I’d like to see more community banks take advantage of the technology now at their disposal.”
- Invest efficiently with an LC or Prosper IRA.
- Is Kabbage buying out rival OnDeck? GP:” A lot of speculation. Without knowing Kabbage’s multiples I do expect that purchasing OnDeck would however add value for them. ” AT: “So far, much ado about nothing.”
- Potential applications of blockchain for real estate.
- Relendex receives full FCA authorization. AT: “Another one rises, but still no Big 3.”
- LendInvest, Pepper UK announce industry-first partnership.
- Lendable secures 100M GBP investment. GP:” This is a HUGE investment. I am very impressed. Especially at a time when the market is not growing as fast as a few years ago. I wonder what convinced the investor to invest this much this fast.”
- HMRC applies to shut down more businesses.
- Humaniq announces alpha release of mobile app. AT: “I like this, but so far, there hasn’t been a blockchain startup make a real breakout.”
- 41 people locked up for fraud case in China. AT: “This is both a good time and a bad time to be in P2P lending in China. Good if you’re ethical, bad if you’re not. I suspect we’ll see a lot more arrests this year.”
- Bitbond, BitPesa partner to improve SME financing. AT: “I’m seeing a lot more activity in Africa these days.”
- United States
- CreditEase Wealth Management Announces New Investments in the US Marketplace Lending Platforms (PR Newswire), Rated: AAA
- The state of fintech funding, in five charts (Tearsheet), Rated: AAA
- Online lender Elevate is heading for an IPO (Business Insider), Rated: AAA
- Online retailers now armed with free fraud prevention resource to combat data breaches (XOR Data Exchange Email), Rated: AAA
- Global Debt Registry to Utilize TransUnion Data to Expand eValidationSM Services within Online Lending (Global Debt Registry Email), Rated: A
- ID Finance Joins Mintos Marketplace, Places Unsecured Loans in Spain Under MoneyMan Brand (Crowdfund Insider), Rated: A
- A community banker’s fintech ‘aha’ moment (American Banker), Rated: A
- Invest Efficiently with a Lending Club or Prosper IRA (Lend Academy), Rated: A
- Is Kabbage Buying Out Rival OnDeck? (Crowdfund Insider), Rated: B
- Potential Applications of Blockchain For Real Estate (Lend Academy), Rated: B
- United Kingdom
- P2P Real Estate Lending Marketplace Relendex Reaches Milestone with Full FCA Authorisation (MarketWatch), Rated: AAA
- LendInvest and Pepper UK announce industry-first partnership (LendInvest), Rated: AAA
- Lendable secures £100 million investment to grow its consumer loan marketplace (Lendable Email), Rated: A
- HMRC applies to shut down more businesses as it pursues unpaid tax (SmallBusiness.co.uk), Rated: A
- European Union
- Blockchain startup Humaniq announces alpha release of mobile app (EconoTimes), Rated: AAA
- 41 Peopled Locked Up for Baiyin Wealth Co. P2P Fraud in China (Crowdfund Insider), Rated: AAA
- Fintech startup Perpule raises $ 650k from Kstart Capital (India Times), Rated: AAA
- Banks should team up with FinTech startups, says Rana Kapoor (India Times), Rated: A
- Bitbond & BitPesa Announces New Partnership: Seeks to Improve Financing of SMEs in Africa (Crowdfund Insider), Rated: AAA
- Middle East
- Fintech startups compete in the growing Middle East market (ImpactAlpha), Rated: A
CreditEase Wealth Management Announces New Investments in the US Marketplace Lending Platforms (PR Newswire), Rated: AAA
CreditEase Wealth Management announces today that its Offshore Private Credit Fund (“OPCF”) has invested a total of US$30 million in two transactions with OnDeck and LendingHome, after making its first investment in Avant and Prosper last year. OPCF raised US$80 million from its Chinese clients in late 2015 which will be fully deployed by end March 2017.
OPCF is the first Chinese offshore fund to invest in loans issued by western platforms. OPCF provides Chinese high net worth and mass affluent investors the opportunity to spread risks across different geographies with exposure to Western private credit. It is also a natural fit for CreditEase Wealth Management clients, given that they are already familiar with the P2P asset class having exposure to it in China.
Marketplace lending has emerged as a new asset class with attractive returns compared to other fixed-income products and low correlation to equities. Against a backdrop of bank deleveraging and de-risking, the global marketplace lending market is expected grow to US$150-490 billion by 2020, according to a recent report published by Morgan Stanley.
The state of fintech funding, in five charts (Tearsheet), Rated: AAA
Total global funding to fintech companies fell to 47.2 percent to $24.7 billion in 2016 from $46.7 billion the year before, according to KPMG’s quarterly fintech funding report, The Pulse of Fintech, which came out in February 23. Deal activity dropped to 1,076 from 1,255 the year before.
VC deal volume is down, but dollar value keeps growing
The number of venture capital deals fell to 1,436 last year from 1,617 in 2015. However, those deals continued to increase in value, rising to $17.35 billion globally in VC investment from $15.64 billion the year before.
Early stage deals are down, late stage deals are up
Online lender Elevate is heading for an IPO (Business Insider), Rated: AAA
The company is offering 7.7 million shares at $12 to $14 each, it said in an updated filing on Monday. It has also put aside 1.15 million shares that the underwriters have the option to purchase. At the top of the range it would raise about $124 million.
The company plans to list its shares on the New York Stock Exchange with a ticker of ELVT. UBS is leading the deal with Credit Suisse and Jefferies.
Online retailers now armed with free fraud prevention resource to combat data breaches (XOR Data Exchange Email), Rated: AAA
Austin-based data and analytics startup XOR Data Exchange is introducing a free resource for online retailers to identify and prevent account takeover attempts caused by the increasing frequency of data breaches that include account login credentials.
XOR’s Compromised Identity Exchange Basic platform allows e-retailers insight into the level of identity theft risk associated with a specific customer based on the number and types of data breaches the individual has been impacted by, whether or not those breaches are producing fraud, and if the individual’s stolen information is available for sale on the Dark Web. Participating retailers will also receive details about recent data breach activity and format of any compromised account passwords in order to implement authentication measures as needed to ensure a purchase is being made by the rightful person.
Following the implementation of EMV chip technologies in U.S. payment cards, retailers and card issuers have reported an increase in card not present (CNP) and online fraud, with some studies reflecting a 3-to-1 surge in growth. Combined with increasing frequency of data breaches that include login credentials, consumers carry increasing risk of experiencing identity theft in the form of account takeover across multiple online platforms.
By implementing this free version of XOR’s Compromised Identity Exchange, which was initially introduced in May 2016, retailers that process online transactions for customers are able to determine the level of identity theft and account takeover risk associated with approving a specific transaction or fulfilling an order. For many of these retailers, customer payment and shipping information is automatically saved for convenience, putting these individuals at risk of identity theft.
Global Debt Registry to Utilize TransUnion Data to Expand eValidationSM Services within Online Lending (Global Debt Registry Email), Rated: A
Global Debt Registry (GDR), the asset certainty company known for its loan validation expertise, today announced it will be utilizing data from leading credit information provider, TransUnion, to extend the range of GDR’s eValidationSM services for investors and issuing creditors in the online lending industry.
By combining GDR’s expertise in real validation of underlying loan data with trusted third-party information providers such as TransUnion, investors obtain greater insight and confidence in their online lending portfolios than achieved in traditional verification programs.
With TransUnion data, investors can obtain in-depth validation of their online lending portfolios while minimizing the exposure of risks associated with managing and protecting confidential consumer data. Additionally, originating creditors are able to leverage an independent third-party service made possible by GDR’s use of TransUnion data to validate certain account data on loans provided to them by online lending platforms. Similarly, warehouse lenders have greater and much needed transparency into these pledged assets and can do so within the current FCRA/GLBA regulatory framework.
ID Finance Joins Mintos Marketplace, Places Unsecured Loans in Spain Under MoneyMan Brand (Crowdfund Insider), Rated: A
ID Finance, a data science and digital finance company, announced on Monday it has officially joined peer-to-peer lender Mintos and has already begun placing personal unsecured loans issued in Spain under its MoneyMan brand on the lending platform’s marketplace.
ID Finance claims it is now the largest online lender in Russia and it currently operates Kazakhstan, Georgia, Poland, Spain, and Brazil.
A community banker’s fintech ‘aha’ moment (American Banker), Rated: A
While watching the game on television, the president and chief executive of Reading Cooperative Bank saw a commercial for the online lender Social Finance. She decided to try out its loan process for herself right then and, before the game came back on screen, her application was approved. She had an $89,000 personal loan.
“If they can deliver that quickly and that seamlessly, they are going to take all of the best customers with the best credit scores,” Thurlow said. “We are going to be left with the lower credit scores.”
The incident prompted her $513 million-asset bank in Reading, Mass., to accelerate its mobile efforts. It is testing some new functions now — like account opening on its mobile app — and Thurlow said she is happy with the results so far.
Invest Efficiently with a Lending Club or Prosper IRA (Lend Academy), Rated: A
The losses or charge offs from loans are capital losses. Investors are able to deduct $3,000 a year of capital losses (Federal). Any losses over $3,000 are carried over to future years. There also may be a limit in capital losses you can claim each year at the state level.
IRAs are available with Lending Club’s preferred custodian, Self Directed IRA Services, Inc. (SDIRA). There is an annual account fee of $100, but this is covered by Lending Club if your initial investment exceeds $5,000. Lending Club will continue to cover this fee in subsequent years if your investment in Lending Club notes exceeds $10,000 or more.
Prosper, like Lending Club offers IRA transfers, rollovers and annual contributions. Prosper will also cover your first year IRA account fee to the custodian with a $5,000 contribution. If you have at least $10,000 invested on your one year anniversary, they will continue to pay the account fee. Prosper’s preferred IRA custodians are Millennium Trust and Equity Institutional.
Is Kabbage Buying Out Rival OnDeck? (Crowdfund Insider), Rated: B
Kabbage is growing while OnDeck seems to be on a downward trend, and given last years negative analysis of the online lending marketplace, it makes some sense that Kabbage will soon make an offer to buyout OnDeck.
So will Kabbage attempt to buy out OnDeck? Maybe, but the more important question is whether OnDeck will agree to it and at what terms.
Bloomberg columnist Gillian Tan thinks that OnDeck most likely won’t agree to a standard buyout based on the fact that OnDeck’s earliest investors still own 45% of the company.
OnDeck did see a slight uptick in its shares last week when speculation of a buyout was first reported on and the recent hiring of former Morgan Stanley COO Jim Rosenthal to its board of directors might be a sign that things will improve.
Potential Applications of Blockchain For Real Estate (Lend Academy), Rated: B
What’s most interesting to me is how companies are applying technology to real estate and one of the big opportunities is bringing blockchain technology to real estate.
One of the keys to the adoption of blockchain for real estate is to demonstrate the cost savings and reduction of risk. As larger companies start to adopt the technology Ragnar believes the rest will follow. Chicago’s Cook County is currently running a pilot program with velox.RE for transferring and tracking property titles as well as filing liens.
For boutique real estate investors or even homeowners there is also an opportunity on a smaller scale to increase the efficiency and lessen the cost of the home buying process. For instance, closing costs can be reduced by reducing the friction that is currently involved in real estate transactions.
Panelists also highlighted the opportunity of the technology being applied to crowdfunding. There are three perceived benefits:
- Accepting bitcoin for payment will allow for investments from across the world, big and small
- Payments can be automated to investors in the property
- The blockchain can provide proof of real estate ownership
P2P Real Estate Lending Marketplace Relendex Reaches Milestone with Full FCA Authorisation (MarketWatch), Rated: AAA
Relendex, a peer-to-peer (P2P) commercial real estate lending marketplace that directly connects creditworthy borrowers to investors, has reached a significant milestone with full authorisation from the Financial Conduct Authority (FCA). The regulation demonstrates the rigour and governance of the platform and will allow Relendex to launch its new Innovative Finance ISA giving retail investors unparalleled tax efficient lending to the U.K. commercial property market.
Relendex, an early mover in security-backed commercial property lending for investors, specialises in innovative finance through its nimble P2P marketplace lending platform technology and ultimately improves accessibility of established and secure asset classes into the direct retail and institutional investor market. Their commercial approach and automated secondary market provides much needed liquidity to lenders. Relendex has sustained zero defaults on its loan book to date (http://www.relendex.com).
Reaching this important milestone in Relendex’s real estate lending development with full FCA approval is testament to its commitment to support U.K. economic growth with fast and flexible financing options for Britain’s commercial property businesses. Whilst providing creditworthy borrowers with access to much needed credit and at the same time providing investors attractive and secured returns that are delivered through Relendex’s leading technology.
Obtaining ISA manager status on the back of this full FCA approval is the next step for Relendex allowing them to be one of the first movers in offering the Innovative Finance ISA to retail investors – the tax free wrapper and P2P investments that is forecast to propel the industry into the mainstream.
LendInvest and Pepper UK announce industry-first partnership (LendInvest), Rated: AAA
LendInvest, the online mortgage lender, and Pepper UK, one of the country’s leading specialist loan servicing companies, have agreed to form what is believed to be the industry’s first partnership between a UK online property finance marketplace and an outsourced loan servicing business.
Under the terms of the partnership, Pepper UK will take responsibility for servicing all new loans originated by the LendInvest team. The LendInvest team will service existing loans until the autumn at which point these loans will be migrated to the Pepper team for continuity of service. All loans that require special servicing (e.g. arrears or expiries) will continue to be handled by the LendInvest team.
Lendable secures £100 million investment to grow its consumer loan marketplace (Lendable Email), Rated: A
Lendable announced today a £100 million investment by Waterfall Asset Management, a global credit investor.
Based in London, Lendable has developed proprietary, automated underwriting technology to offer instant decisions, transparent rates and competitive pricing on small consumer loans. The platform has generated market-leading returns to investors, and will continue to add further private and institutional investors in the coming months.
HMRC applies to shut down more businesses as it pursues unpaid tax (SmallBusiness.co.uk), Rated: A
HMRC applications to wind up businesses in order to recover unpaid tax rose 12 per cent last year, up to 3,906 in 2016 from 3,485 in 2015, says Funding Options, the online business finance supermarket.
Funding Options says that if HMRC is successful in obtaining a winding up order from a court, the business concerned will be forced to close, and its assets liquidated to pay outstanding tax bills.
Funding Options has warned that in addition to being wound up, businesses face other debilitating consequences if they cannot afford to pay tax bills on time. HMRC also has the power to seize business assets and levy substantial penalties on businesses that fail to pay their tax arrears.
Blockchain startup Humaniq announces alpha release of mobile app (EconoTimes), Rated: AAA
Blockchain startup Humaniq announced the alpha release of their mobile app that is focused to tackling the global issue of financial exclusion for people across the world, who do not have bank accounts.
The application on iOS and Android will have various unique features, which have not been before with banking apps. The app software will have biometric ID for unlocking the app or verifying the transactions, as well as to replace the entire sign up process. The Humaniq app builds user profiles that are based on facial and voice recognition algorithms.
With the launch of the app initially, the blockchain company will focus on developing the core banking services of the app, such as remittance payments and P2P lending. The app will support various cryptocurrencies including bitcoin and ether, apart from Humaniq’s own tokens known as HMQ.
41 Peopled Locked Up for Baiyin Wealth Co. P2P Fraud in China (Crowdfund Insider), Rated: AAA
In what is being described as Shanghai’s “first and high profile” peer to peer lending fraud case, 41 people associated with Baiyin Wealth Co. have been imprisoned according to China News. The case included the theft of approximately 700 million yuan or about USD $10.2 million. Sentences were said to range from 6 to 8 months with some individuals receiving a reprieve.
Fintech startup Perpule raises $ 650k from Kstart Capital (India Times), Rated: AAA
Fintech startup Perpule has raised $650,000 in a funding round led by Kstart Capital, the sister concern of VC firm Kalaari Capital, reports Shadma Shaikh. The round also saw participation from venture fund Venture Highway and Raghunandan G, cofounder of TaxiForSure. “Our vision is to ensure waiting in queues is a thing of the past.
Banks should team up with FinTech startups, says Rana Kapoor (India Times), Rated: A
Universal banks need to explore partnerships with entities such as payments banks, small finance banks and FinTech startups to achieve a more financially included society, said YES BankBSE 0.49 % Managing Director Rana Kapoor, while he warned banks against strategies of trying out indigenous solutions.
Bitbond & BitPesa Announces New Partnership: Seeks to Improve Financing of SMEs in Africa (Crowdfund Insider), Rated: AAA
BitPesa pays local currency out to the borrower’s preferred payment option within minutes. The integration between the companies is currently live in Kenya, Nigeria, Uganda, and Tanzania.
Fintech startups compete in the growing Middle East market (ImpactAlpha), Rated: A
The small financial technology, or fintech, sector in the Middle East is expected to grow from about 100 startups in 2015 to as many as 250 by 2020, according to a new report.
Half of today’s fintech startups are based in the United Arab Emirates, but the Fincluders Startup Challenge in Amman, Jordan from May 3-4 may help change that.