- Today’s main news: China Rapid Finance goes public at $350M valuation, down from C round valuation of $1bil. VPC Specialty Lending Investments annual results continues to disappoint
- Morty launches fully-automated mortgage marketplace. Barclay’s opens Europe’s largest fintech site in London. Airwallex wins $17M funding. India to see fintech regulations soon.
- Today’s main analysis: National survey shows instant financing will drive business to online retailers
- Today’s thought-provoking articles: Lending IPOs find cautious investors amid consumer credit fears.SoFi’s first PR campaign tells millennials how to ask for a raise
- Elevate announces expanded elastic funding capacity. GP:”Elevate Credit will apprently have access to $250mil up from $150m from Victory Park Capital via a separate vehicle called Elastic. “
- SoFi’s first PR campaign tells millennials how to ask for a raise. GP:”A very interesting marketing approach, in line with SoFi’s interests of their borrowers increasing their repayment capability.” AT: “This is why SoFi is now the industry leader.”
- PayPal partners with WooCommerce, Xero for ‘Business in a Box’. GP:”A very interesting approach. Square is built on making taking credit card payment easily. PayPal is falling behind on innovation.” AT: I would argue that PayPal was the world’s first digital bank. Many online entrepreneurs, including myself, have been using it as a bank account for years even if the service hasn’t acted like a traditional bank. Now, it looks like PayPal is trying to become an actual bank as well as a small business tool box. Think Quicken + CRB.”
- National survey shows instant financing will drive business to online retailers. AT: “This is good news for Klarna. I suspect we’ll see other e-commerce financing solutions begin to hit the market soon. There is certainly a demand for it.”
- Morty launches fully-automated mortgage marketplace. GP:”The interesting part here is not comparing mortgage prices, Lending Tree does that. It is instead if you can close via the website as well. I am curious to see traction and volume numbers here. I think it is all about customer experience. “
- RealtyeVest is a one-stop real estate investing platform.
- Lending IPOs find cautious investors amid consumer credit fears. GP:”An article about China Rapid Finance’s IPO.”
- This startup wants to be the Amazon of real estate. GP:”Cadre is an e-commerce site for investing in real estate. Cadre seems to be just a high net worth crowdfunding real estate company.”
- NCAP impacts credit data of all credit bureaus due to public record standards. GP:”National Consumer Assistance Plan(NCAP), a set of initiatives designed to improve the accuracy of credit report information, as well as to provide consumers with a better experience interacting with the nationwide Credit Reporting Agencies (CRAs). During the week of July 10, 2017, the CRAs will remove from their databases previously collected public record data that does not meet the enhanced PII standards.”
- Robo advice: Better than no advice?
- Helping clients determine risks in alternative investments. AT: “A great illustration.”
- Lantern Credit appoints Ricardo Gomez-Acebo to board.
- Incumbent financial services’ millennial strategy. AT: “A little laugh never hurt anyone.”
- Attorney Jonathan Frutkin to speak at crowdfunding conference.
- RateSetter upgraded to top-tier in transparency. GP:”4th Way rating of RateSetter has improved. “
- Sharing the voice of British small businesses.
- UK SMEs to back Tory leadership.
- Flender is granted P2P credit license. GP:”Congratulations!”
- RateSetter partners with George Banco. GP:”RateSetter has acquired specialist motor finance providers Vehicle Stocking Limited and Vehicle Credit Limited out of their parent company’s administration”
- Growth Street celebrates marketplace rate drop.
- Funding Circle review. GP:”Funding Circle is the only peer-to-peer lending platform of scale which operates across multiple geographies. “
- VPC Specialty Lending Investments annual results continues to disappoint. GP:”NAV return of 0.85%”
- Going round in circles.
- United States
- Elevate Announces Expanded Elastic Funding Capacity (BusinessWire), Rated: AAA
- SoFi’s first PR campaign answers the question, ‘How do I ask for a raise?’ (PRWeek), Rated: AAA
- PayPal launches a small biz toolset, ‘Business in a Box,’ with WooCommerce & Xero (TechCrunch), Rated: AAA
- National Survey Shows Instant Financing Will Drive Business to Online Retailers (PR Newswire), Rated: AAA
- Morty launches fully-automated mortgage marketplace (PRNewswire), Rated: A
- RealtyeVest Is the One-Stop Platform for Real Estate Investing and Project Financing (PR Newswire), Rated: A
- Lending IPOs Find Cautious Investors Amid Consumer Credit Fears (Bloomberg), Rated: A
- This Startup Wants to Be the Amazon of Real Estate (Inc), Rated: A
- NCAP Notice to Clients regarding Public Record Standards (Experian Email), Rated: A
- Robo Advice: Better Than No Advice? (Forbes), Rated: A
- Helping Clients Determine Risks in Alternative Investments (Wealth Management), Rated: A
- FLEETCOR to Acquire “Cambridge Global Payments,” a B2B International Payments Provider (BusinessWire), Rated: A
- Lantern Credit Appoints Ricardo Gomez-Acebo to Board of Managers (BusinessWire), Rated: B
- Incumbent financial services’ millennial strategy (The New Yorker via CB Insights Email), Rated: B
- Attorney Jonathan Frutkin Featured Speaker at Washington D.C Crowdfunding Conference (Benzinga), Rated: B
- United Kingdom
- RateSetter upgraded transparency to “top-tier” level, says 4th Way (P2P Finance News), Rated: AAA
- Sharing the voice of British small businesses (Funding Circle), Rated: AAA
- UK SMEs set to back Tory leadership (P2P Finance News), Rated: A
- Flender is granted its P2P credit license (AltFi), Rated: A
- RateSetter Partners with George Banco, Acquires Two Motor Finance Businesses (Crowdfund Insider), Rated: A
- UK P2P Lender Growth Street Celebrates Marketplace Rate Drop, Signals Increased Momentum (Crowdfund Insider), Rated: A
- FUNDING CIRCLE REVIEW (Orca Money), Rated: A
- VPC Specialty Lending Investments Annual Results Continues to Disappoint (Crowdfund Insider), Rated: A
- Going round in circles (Bridging&Commercial), Rated: B
- Former Unicorn China Rapid Finance Goes Public at a $ 350M Valuation (Lend Academy), Rated: AAA
- P2P Industry News (Xing Ping She Email), Rated: A
- China Rapid Finance a consumer lending force in China (Bankless Times), Rated: A
- International P2P Lending Volumes April 2017 (P2P-Banking), Rated: AAA
- European Union
- Barclays Opens Europe’s Largest FinTech Site in London (Yahoo! Finance), Rated: AAA
- Melbourne fintech Airwallex just won $ 17 million funding from Mastercard, Sequoia and Tencent (Business Insider), Rated: AAA
- FinTech Australia Reflects on First Year (Crowdfund Insider), Rated: A
- India to see regulations for fintech space soon: KPMG report (Outlook), Rated: AAA
- SoftBank Said in Talks to Invest $ 1.4 Billion in India’s Paytm (Bloomberg), Rated: AAA
- 3 Alternative Lending Trends That Have Made Fintech Startups Popular (Inc42), Rated: A
Elevate Announces Expanded Elastic Funding Capacity (BusinessWire), Rated: AAA
Elevate Credit, Inc. (“Elevate”) announced today that Elastic SPV, which purchases loan participations in the Elastic line of credit product originated by Republic Bank & Trust Company (“Republic Bank”), increased its debt facility with Victory Park Capital from $150 million to $250 million. This is the first step in a two-step process to further increase and diversify the funding capacity for the Elastic line of credit product.
During the second quarter of 2017, an additional SPV will be created as another funding source for the Elastic line of credit product. This additional SPV for Elastic would provide additional funding, diversified funding sources and further lower the cost of funds.
SoFi’s first PR campaign answers the question, ‘How do I ask for a raise?’ (PRWeek), Rated: AAA
Starting May 15, SoFi staffers will participate in an online series that will offer users tips on communicating their value in the workplace and tell inspirational stories. The company will hold workshops in eight U.S. cities including New York, Chicago, Seattle, San Francisco, and Washington, DC, on negotiating pay raises, non-monetary benefits, and other topics. Career expert Nicole Lapin will appear at the New York event.
The average SoFi student loan customer is about 33 years old and has a student loan balance of about $75,000, more than twice the national average. A SoFi survey also found 50% of young, college-educated professionals had not negotiated their own salaries, and 54% said they don’t know their “market value.”
PayPal launches a small biz toolset, ‘Business in a Box,’ with WooCommerce & Xero (TechCrunch), Rated: AAA
PayPal today launched a new service, called Business in Box, aimed at bringing more U.S. small business owners to its payments platform. The service, which was developed in partnership with WooCommerce and Xero, offers merchants a suite of tools for running their online businesses, including an online storefront, accounting tools, the ability to apply for working capital from PayPal and, of course, support for taking payments either online or offline, via PayPal.
Business in a Box is largely aimed at first-time business owners who already know what they want to sell and have a roadmap in mind, as well as at established offline businesses that want to make the move online.
Often, these business owners would otherwise turn to an e-commerce platform, like Shopify, Magento, BigCommerce or WooCommerce, to establish their online presence and take advantage of other add-ons that can help them with other aspects of their business, like running promotions, marketing, order management, shipping, social media and more.
The company also noted today that PayPal Working Capital has now helped more than 115,000 businesses worldwide access more than $3 billion in loans and cash advances since the service launched in 2013.
National Survey Shows Instant Financing Will Drive Business to Online Retailers (PR Newswire), Rated: AAA
American consumers appear to be warming up to instant financing options when purchasing goods and services online. According to a new national survey, three quarters (75 percent) of consumers indicate they would be likely to select an online retailer that offered instant financing compared to another that did not; 28 percent would be very likely to change merchants in order to use instant financing.
Instant financing is an easy-to-use, revolving line of credit that consumers apply for within a merchant’s online checkout. It allows consumers to spread purchases over time with low APR financing offers, and provides an alternative to credit and debit cards when paying for an online purchase.
The online study was fielded between April 10 and 13, 2017 by Researchscape International on behalf of Klarna North America (www.klarna.com). The survey of 2,024 consumers, ages 18 and older, was designed to better understand the behaviors and attitudes of consumers towards instant financing. Consumers were quota-sampled using 32 different cells (gender by age by region) to closely match the overall national population.
In terms of how instant financing might impact their spending while shopping online, 39 percent of consumers indicated they would spend more money on a purchase if they had the option of instant financing compared to 42 percent who would not and 19 percent who did not know if they would spend more money.
Smartphone owners, 88 percent of consumers who responded, were asked about the ease and willingness to enter certain types of personal information when applying for instant financing. Among the information seen to be “too much trouble” to enter were Social Security number and bank account numbers (51 percent each), and credit card numbers (40 percent). On the other hand, just over a tenth of consumers found it to be too much trouble to enter an email address (11 percent), birthday (12 percent) or spouse’s name (12 percent).
Other key findings of the survey include:
- Nearly half of respondents (47 percent) would like to be presented with an instant financing option while shopping online
- Just over a quarter of consumers surveyed (28 percent) have used instant financing while 68 percent have not and 4 percent were not sure if they had
Beyond probing consumers’ thoughts regarding availability, the survey also asked about the convenience and ease-of-use factors of instant financing. For instance, a majority of consumers (52 percent) expect to wait three or more minutes to be approved for instant financing. Twenty-eight percent would expect to wait two minutes and just 20 percent would expect to wait under a minute. Klarna’s approval process typically provides an approval in under a minute with only simple, top-of-mind information required.
Morty launches fully-automated mortgage marketplace (PRNewswire), Rated: A
Focused on empowering homeowners to make smarter decisions about their mortgages, today Morty (www.himorty.com) launches its fully-automated mortgage marketplace, where homebuyers can shop, compare — and close — any loan option from among its network of lenders. Morty is initially rolling out with 10 major lenders across 10 markets in the United States, with plans to expand nationally by the end of 2017.
Leveraging the founding team’s diverse experience and learning first-hand from homebuyers during its initial pilot, Morty was able to identify pain points from start to finish and prove the benefits of a marketplace model. In the over one thousand real-life loan scenarios it has run for homebuyers, Morty has observed rate and fee variances across lenders that can add up to tens of thousands of dollars in fees and monthly payments.
Morty is creating an entirely new model: access to any lender or mortgage product within a single, unified mortgage process from first click to closing day.
Here’s how it works:
- Homebuyers create a simple financial profile by linking their income, assets, employment, and property information and describing their homeownership goals.
- Morty’s pricing engine algorithmically matches the homebuyer’s profile with each lender’s eligibility and pricing guidelines to show accurate, customized quotes, inclusive of all lender fees and closing costs.
- Borrowers see their loan options in full transparency and compare across lenders and products.
- Never once leaving the Morty platform, the homebuyer chooses a loan and Morty automates the process all the way to the closing table.
In addition to its launch, Morty also announces that it has raised $3 million in funding led by Thrive Capital with participation from SV Angel, FJ Labs, Corigin Ventures, MetaProp, Techstars and several angel investors.
RealtyeVest Is the One-Stop Platform for Real Estate Investing and Project Financing (PR Newswire), Rated: A
RealtyeVest, Formerly IHT Realty Group, officially unveiled their new brand and optimized website. Destined to become one of the largest real estate crowdfunding platforms in the US, the new RealtyeVest website (https://realtyevest.com) provides a simple, secure and transparent platform for accredited investors, real estate developers and owner-operators.
“Our decision to rebrand from IHT Realty Group to RealtyeVest was a result of listening to feedback from our strategic partners and observing best practices in the industry,” said Daniel Summers, CEO. “We believe our new name better represents the essence of our business, and we are excited about the innovative technology that powers our new online marketplace. We spared no expense in the new build, providing a win-win to our investors and Sponsors.”
RealtyeVest is an online marketplace that connects investors and Sponsors (real estate owner-operators) to crowdfund exclusive real estate investments. Their platform allows its members to browse, research and make informed investment decisions on these exclusive properties.
Lending IPOs Find Cautious Investors Amid Consumer Credit Fears (Bloomberg), Rated: A
China Rapid Finance Ltd. on Friday became just the second consumer lender this year to list in the U.S., following Elevate Credit Inc. earlier in April. Although they do business on opposite sides of the world, the duo has much in common: Both face investor questions about the reliability of their borrowers, both begin trading amid a particularly iffy time in the credit cycle and — perhaps consequently — both slashed their IPO price days before going public.
When LendingClub Corp. went public in 2014, some hailed the event as the dawn of a new era for finance. Shares have since fallen 60 percent from the IPO price.
“China Rapid Finance is coming to the market during a turbulent time in the China peer-to-peer industry as regulators roll out more controls to clean up what has so far been chaotic growth in the past few years,” MCM Partners analyst Ryan Roberts wrote in a note on the stock’s first initiation, a buy rating. “The company reduced the pricing range by about 40 percent, which we suspect reflected tepid demand from backers,” the note said.
Both recent IPOs are now trading up from their reduced offering prices by nearly 25 percent. MCM says the IPO valued China Rapid Finance at 4.7 times its book ratio. William Blair on Monday said that Elevate Credit is trading at 7.5 times its 2018 estimated earnings per share.
This Startup Wants to Be the Amazon of Real Estate (Inc), Rated: A
Even so, the 29-year-old Williams is a force, as is his company. Since launching, Cadre has generated nearly $1 billion worth of deals, raising close to $70 million in funding from high-profile investors such as Peter Thiel, Goldman Sachs, and Jack Ma.
So Williams set up a website where he could analyze these homes using a tax parcel ID–which tracks the value of a property over time–and measured this against what they were selling for. Using the data, and bolstered by the cash of wealthy Harvard alums including the Kushners, he started buying dozens of properties and flipping them for three times their original price. “By the time I graduated, I was at a crossroads: Do I scale this business nationally, or do I do tech banking at Goldman Sachs?” he recalls thinking.
Williams decided to do both. He pulled 18-hour days as an investment banker–and then would quietly work on his startup from the comfort of a supply-closet-size room by night. Real estate, he figured, was a valuable asset that ought to be made available to more (and more average) investors.
Cadre is an e-commerce site for investing in real estate. It connects customers–primarily wealthy individuals, referred to as “qualified purchasers”–to property deals across the U.S. (Cadre requires a minimum investment of a few hundred thousand dollars; that’s somewhat less than what a traditional fund requires, but likely more than what you’d pay to buy into a real estate investment trust, or REIT, which trades like common stock.) Williams declined to comment on what exactly the company charges its investors–it asks for an upfront fee and a recurring subscription rate–though notes that it’s in the range of a “couple hundred basis points.” A fund, by contrast, will typically take 2 percent of the investment, and then 20 percent of profits over time.
Although Cadre faces competition mainly from the traditional brokers, a growing number of startups have emerged in the real estate leasing space, such as 42Floors, a San Francisco website that lists commercial real estate and office rentals, and Rofo, an online marketplace for property listings and potential tenants that can facilitate lease deals without broker intervention.
NCAP Notice to Clients regarding Public Record Standards (Experian Email), Rated: A
In 2015, Equifax, Experian, and TransUnion announced the National Consumer Assistance Plan (NCAP), a set of initiatives designed to improve the accuracy of credit report information, as well as to provide consumers with a better experience interacting with the nationwide Credit Reporting Agencies (CRAs).
In June 2016, the CRAs announced enhanced public record data standards for the collection and timely updating of public record data reported on consumer credit reports. The enhanced standards require: (i) minimum consumer identifying information (name, address, social security number and/or date of birth) (“PII”) and (ii) minimum collection frequency for public records (at least every 90 days). These enhanced standards will apply to new and existing public record data on the CRAs’ respective consumer credit reporting databases. As previously announced, these enhanced standards are effective July 1, 2017.
Based on information provided by our public record vendor about the data available from courts and recorders’ offices, we expect bankruptcy public record data will continue to meet the enhanced collection and reporting standards. However, civil judgments and approximately half of tax lien data are not expected to meet the enhanced standards.
During the week of July 10, 2017, the CRAs will remove from their databases previously collected public record data that does not meet the enhanced PII standards. This includes the removal of all judgment public records and the portion of tax liens not meeting the enhanced standard. Public record data will also be monitored for adherence to the enhanced PII and collection frequency standards after July 1, 2017.
Despite the anticipated loss of significant volume of public record data from credit files, impact analysis conducted by the CRAs, as well as leading scoring model companies using CRA data, show a modest risk scoring impact and minimal loss in predictive performance as a result of these changes.
Please contact any member of your Account teams with questions you may have or forward questions to:
- Equifax: firstname.lastname@example.org
- Experian: DataReporting@experian.com
- TransUnion: TUDAS@transunion.com
Lantern Credit Appoints Ricardo Gomez-Acebo to Board of Managers (BusinessWire), Rated: B
Lantern Credit, a financial technology company working to solve systematic inefficiencies in the consumer credit industry, adds Ricardo Gomez-Acebo to its Board of Managers. He joins Chairman John Mack, Vice Chairman John Sculley, James Held, Seth Johnson, Kevin Knight and Chad Swensen on the Lantern Board.
Gomez-Acebo has more than 30 years of experience in the Spanish and International Retail Banking sector, holding various executive roles at Spanish banks Banesto and Banco Santander including General Manager of Europe for Banesto. Gomez-Acebo led business development with strategic financial partners at Banco Santander and most recently is heading risk management for the bank.
Incumbent financial services’ millennial strategy (The New Yorker via CB Insights Email), Rated: B
Attorney Jonathan Frutkin Featured Speaker at Washington D.C Crowdfunding Conference (Benzinga), Rated: B
Radix Law’s principal attorney, Jonathan Frutkin, will be a featured speaker at the “Fourth Annual Conference and Workshop for Crowdfunding USA” scheduled for May 4 to 5 at the National Press Club in Washington D.C. Frutkin is the author of the book Equity Crowdfunding: Transforming Customers into Loyal Owners.
RateSetter upgraded transparency to “top-tier” level, says 4th Way (P2P Finance News), Rated: AAA
RATESETTER’S upgraded data disclosure on its loan book and expected losses has brought its transparency to a top-tier level, according to peer-to-peer lending research firm 4th Way.
Based on the amended methodology, expected cumulative losses now stand at £18.06m, which paired with the current £22.44m provision fund buffer result in a 124 per cent coverage ratio – six per cent higher than last reported.
RateSetter’s data table now provides a clear estimate of the losses expected over the lifetime of its loan book, spelling out the losses that have already materialised and future expected losses for each year of origination, as well as a detailed breakdown of different types of arrears, provision fund adequacy levels, and investors’ expected returns.
Sharing the voice of British small businesses (Funding Circle), Rated: AAA
What we discovered is that small businesses are going for growth, unfazed by the uncertainty caused by last year’s referendum result and the snap election. Nearly 70% of UK small businesses expect their turnover to increase within the next 12 months – half of whom expect a steady increase of between 6 and 20%, and only 6% expect turnover to decrease.
Small businesses, who already account for 60% of private sector employment, will continue to drive much needed job creation this year. More than half of the businesses we spoke to are planning to hire at least one new full-time member of staff over the next year. With more than 5 million small businesses across the country – this could mean the creation of millions of new jobs in the next 12 months!
When asked what their one policy priority is in the run up to the election, tax was by far the most important issue. With business rates mentioned specifically nearly 300 times, 40% said that they want the new Government to focus on this area after the election. The second most important policy area, according to a quarter of businesses, was of course Brexit.
To date investors have lent £2.2 billion to more than 23,000 UK small businesses.
UK SMEs set to back Tory leadership (P2P Finance News), Rated: A
A vast majority of the 2,300 firms interviewed by the country’s third largest small- and medium-sized enterprises (SME) lender are poised to throw their weight behind Theresa May’s party as the best positioned to deliver Brexit, despite half of them opposing the separation from the 28-nation bloc in the referendum last year.
The research also confirmed that UK SMEs have quickly shrugged off Brexit-induced economic worries, as seven in 10 firms expect to deliver stronger profits in the next 12 months and only six per cent forecast a drop in turnover over the same period.
Flender is granted its P2P credit license (AltFi), Rated: A
Peer-to-peer friends and family lender, Flender announced it has now received its full authorisation from the FCA and has also launched operations in Ireland.
The platform says it has funded loans of over €900,000 since its soft-launch, without any marketing or advertising. It has seen demand from companies in a wide range of industry sectors including construction, F&B, energy companies, retailers and more. It reports that it has attracted over 750 registered users, 138 campaigns submitted with 11 currently live on the platform.
RateSetter Partners with George Banco, Acquires Two Motor Finance Businesses (Crowdfund Insider), Rated: A
RateSetter previously provided financing to George Banco. RateSetter will now lend directly to George Banco’s growing customer base with George Banco generating the leads.der George Banco. RateSetter has also acquired an equity stake in the George Banco company.
Additionally, RateSetter has acquired specialist motor finance providers Vehicle Stocking Limited and Vehicle Credit Limited out of their parent company’s administration. RateSetter will rebrand both businesses and invest in them to build on its current motor finance capabilities. RateSetter previously provided wholesale finance to these businesses.
UK P2P Lender Growth Street Celebrates Marketplace Rate Drop, Signals Increased Momentum (Crowdfund Insider), Rated: A
Growth Street’s marketplace rate dropped on Monday from 6.5% AER to 6.4% AER, rewarding borrowers with a 10bps drop in their costs of funds. The UK P2P lender attributes the drop to the momentum it has built on its platform, welcoming over 700 investors to date since the launch of its investment offering in November.
FUNDING CIRCLE REVIEW (Orca Money), Rated: A
Loans are split into a minimum of £20 chunks or loan parts allowing investors to achieve a high level of diversification when investing relatively low amounts. Funding Circle suggests lending to a minimum of 100 businesses to achieve a 1% exposure to any one business. When investing a minimum of £2,000, Funding Circle’s auto-bid function will achieve this level of diversification automatically.
Borrowers across Funding Circle are all small to medium sized businesses (SMEs), borrowing between £5,000- £1million for loan terms of 6 months to 5 years.
Funding Circle is the only peer-to-peer lending platform of scale which operates across multiple geographies. The P2P platform has expanded from the UK to the USA, Germany and Spain. 74% of Funding Circle’s group (Funding Circle Holding Limited) revenue in the period ending the 31st December 2015 came from its UK business (Funding Circle UK Limited).
VPC Specialty Lending Investments Annual Results Continues to Disappoint (Crowdfund Insider), Rated: A
VPC Specialty Lending Investments PLC (LSE:VSL.L) released 2016 annual results last week and according to Chairman Andrew Adcock, results continue to disappoint. Shares in the fund that invests in various online lending assets continue to trade at a significant discount to the net asset value per share. As of December 31, 2016, VPC had deployed 87% of its NAV (with its cash holding of 13% temporarily elevated due to the recent sale of the Funding Circle U.K. portfolio). During 2016, VPC generated an NAV return of 0.85% for the Ordinary Shares and distributed dividends of 6.00 pence per Ordinary Share relating to the income earned during the year.
Going round in circles (Bridging&Commercial), Rated: B
The recent news that peer-to-peer lending platform Funding Circle plans to stop all property development lending by mid-2018 came as something of a surprise.
Risk is always a factor in construction, but it is how that risk is managed that is important. Funding Circle’s withdrawal could allow other lenders to enter this space, and increased competition will be no bad thing in giving developers greater choice.
While we appreciate that there are always certain areas of the market that give cause for concern, many of our clients have a clear appetite for further growth. While demand is strong, and developers continue to be starved of funds by traditional lenders, the market for alternative finance – and peer-to-peer lending particularly – will come to the fore.
Former Unicorn China Rapid Finance Goes Public at a $ 350M Valuation (Lend Academy), Rated: AAA
The IPO price was set at $6.00 and the company raised $60 million which was adjusted down from their anticipated raise of $105 million. Back in 2015, it was reported that the company had a pre-money valuation of $1 billion after closing a $35 million Series C. The company is now valued at $350 million.
At time of writing shares were trading around $7.10 per share.
The fact that China Rapid Finance and Yirendai before them chose to go public in the US is significant. In a recent Lend Academy podcast with Yirendai CEO Yihan Fang, she stated that they felt the US was more educated on marketplace lending. This coupled with the fact that Ning Tang (Founder of parent company CreditEase) and other management members had experience in the US and were more comfortable with the US capital markets led to their decision to list in the US.
Another company that could seek a US IPO is Ppdai.com who last year said it could go public in the first half of 2017.
P2P Industry News (Xing Ping She Email), Rated: A
Today, FuMi Tech, MI’s related eco-chain company, announced it has finished A round of financing and raised 100 million RMB. This round of financing led by Buddhism Capital, with MoBai Capital and the previous investor ShunWei Capital participated. The fund will be continuously used to improve users’ experience.
WeBull, one of the products of FuMi Tech, providing trading services of US and HK stocks, and supporting real-time quotes of global stock, foreign exchange, funds and derivatives markets of over 20 countries. In fact, FuMi Tech has previously raised a joint investment of 50 million RMB from MI and ShunWei Capital.
Recently, China Construction Bank(Guangdong Branch) has launched its P2P funding depository product “Dragon depository”, and currently the bank has reached agreements with several P2P lending platforms.
According to an insider of CCB, the two critical measurements for their P2P cooperators are: bad debts and overall strength of the platform.The participation of CCB will promote the compliance process and bring a sustainable development of P2P lending industry.
The first Asia Credit Rating Agencies CEO Fair & Systemic Risk International Seminar was held in Beijing recently. Hongwan Chen, the deputy director of the financial department of National Development and Reform Commission, said that the regional cooperation across Asia is important for it could accelerate the Construction of Credit System in the area. He also advise to build credit record for local companies incorporated overseas and foreign investors, and set up a “blacklist” about those seriously illegal enterprises.
China Rapid Finance a consumer lending force in China (Bankless Times), Rated: A
Dr. Wang completed his Ph.D in statistics at the University of Chicago in 1995 before moving on to Sears Credit where as head of analytics he developed models employing credit bureau data while also overseeing the creation of a credit data warehouse. He returned to China, where in 2001 he founded China Rapid Finance which began by developing credit scoring and decisioning models that helped companies issue more than 100 million credit cards.
In 2010 they made the move into marketplace lending, where they teamed up with more than 100 Chinese internet companies to analyze and score data that allowed them to preselect customers.
Seven years later China Rapid Finance has become China’s leading online consumer credit marketplace after facilitating 15 million loans to two million borrowers, beginning with small amounts for short durations and growing into longer-term loans for larger amounts.
EMMAs total 500 million and have been underserved by traditional credit providers, who focus on the 300 million super prime people who work for government or large institutions, Dr. Wang explained. He estimates China’s consumer credit coverage at roughly one-fourth that of the United States. While roughly 60 per cent of Americans have credit coverage, that rate is 16 per cent in China.
EMMAs are prime and near-prime consumers who are educated and have stable employment in the services and with startups and SMEs, but they have little credit history and cannot obtain bank credit. They also largely stayed away from the notorious shadow banks, a large (no one knows precisely how large) opaque industry which helped fuel both real estate and small consumer loans.
International P2P Lending Volumes April 2017 (P2P-Banking), Rated: AAA
Funding Circle leads ahead of Zopa and Lendinvest. The total volume for the reported marketplaces adds up to 445 million Euro.
Milestones reached this month are:
- Younited Credit crossed 500 million Euro loan volume since launch
Barclays Opens Europe’s Largest FinTech Site in London (Yahoo! Finance), Rated: AAA
Barclays has today opened its flagship open innovation site, Rise London, in Shoreditch. It is Europe’s largest co-working space dedicated to financial technologies (FinTech).
Rise, created by Barclays, brings together from across the world a carefully curated community of FinTech startups, along with our corporate clients and other experts, to work on Barclays’ customer and business opportunities and together help to create the future of financial services.
Rise London will house more than 40 FinTech companies, along with Banking and Technology teams from Barclays, and will serve as a gathering place for leaders in the FinTech and venture capital communities. Rise London will play host to more than 200 hours of learning, workshops, hackathons and networking on a monthly basis.
Melbourne fintech Airwallex just won $ 17 million funding from Mastercard, Sequoia and Tencent (Business Insider), Rated: AAA
Australian cross-border payment startup Airwallex has secured US$13 million ($17.4 million) in a funding round to continue its expansion overseas.
For Sequoia — the 45-year-old firm famous for investing in famous tech brands such as Apple, Google and AirBnB – the deal represents its Chinese arm’s first investment in an Australian startup.
Airwallex founder and chief executive Jack Zhang told Business Insider that the company, which already can make payments to 100 countries, will use the cash injection to expand its physical presence in locations such as London, Shanghai, Hong Kong, Indonesia, Malaysia and Taiwan.
FinTech Australia Reflects on First Year (Crowdfund Insider), Rated: A
India to see regulations for fintech space soon: KPMG report (Outlook), Rated: AAA
The government is expected to come out with regulations for fintech (financial technology) space as the industry is likely to witness increased payments and lending activities, a study said today.
Over the next quarter, insurtech may come into its own in India, according to the report.
Citing Paytm attracting Asia’s largest funding round of USD 200 million in March quarter, it said AI and blockchain may be big bets for investors apart from payments, open data and data analytics.
Over the quarter, investment into Asia’s fintech space hit USD 492 million across 33 deals, as per the report.
SoftBank Said in Talks to Invest $ 1.4 Billion in India’s Paytm (Bloomberg), Rated: AAA
SoftBank Group Corp. is in talks to invest about $1.4 billion in India’s One97 Communications Ltd. in a deal that would value the owner of the country’s largest digital-payments provider at about $7 billion, according to people familiar with the matter.
The deal is not yet finalized and the terms may yet change, said the people, asking not to be identified because the matter is private. One97 Communications, whose Paytm unit has seen business surge as India took most of its paper bills from circulation, has also had discussions with two other investors, one of the people said. The company was last valued at $4.2 billion, according to research firm CB Insights.
3 Alternative Lending Trends That Have Made Fintech Startups Popular (Inc42), Rated: A
Traditional banks have left quite a few gaping holes when it comes to unsecured loans, especially for salaried people who are not employed in companies that they classify as A/A+ category.
Quick Personal Loans
Customers, it appears, are warming up to online alternative lending portals, and it is predominantly due to the speed with which the loan application is processed, verified and approved. Tedious documentation, in addition to ambiguous rules and non-transparency in the whole process that a customer faces with banks, has made entrepreneurs reinvent lending for salaried employees. The ease and convenience of digital (and painless) transactions are considered priceless. There are lenders such as Qbera, which disburses personal loans up to INR 5 Lakhs in 24 hours.
Alternative Fixed Income Products Become More Popular
2016 saw RBI releasing a set of directives regarding P2P loans in India. The paper recommends NBFCs status for P2P lenders, which is almost consistent with what the P2P sector has been demanding. This liberal approach helps to protect the interest of all stakeholders without choking innovative ideas. P2P lenders are hoping for these recommendations to become regulations after the budget announcement, which will give the arena a facelift.
Short-Term Payday Loans
You don’t get instant cash from banks and online payday loan providers often save the day. As they are offered for shorter tenures compared to online personal loans, it gets repaid more quickly, which is a definite plus. You can even opt for monthly, fortnightly, weekly or daily loans.