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Editorial: Why funds will drive marketplace lending forward

This week the industry has returned to its normal rhythm, as expected.

LendingTree’s published a customer rating of the top lenders which is dominated by p2p and marketplace lenders. Top customer experience is the #1 metric that will make or break a company. It is more important than profitability or revenue growth because it drives profitability when customers are willing to pay a premium for a better experience. And it drives revenue growth, as well, through referrals and return-business while keeping costs of customer acquisition low.

Separately, Shanda Group accumulating shares in Lending Club, Kabbage breaking $2 bil in lines of credit and AutoFi raising a $17mil round A is the normal course of business as well.

Also as expected, Prosper has hired bankers to raise more capital and raised interest rates. This enabled Blue Elephant to resume buying whole loans from Prosper, a great stamp of approval from one of the most credible funds in the industry.

Which brings us to the Deloitte report and the Money Banking article. Both are thoughtful industry analysis which lead to arguable conclusions. They have to be taken seriously and disproven in an organized way using real data.

What drove me to the industry, as probably many of you, has been the capacity to get a 7% return on my cash by lending it out. I am not aware of any other investment with similar risk to reward ratio and timescale. I believe the main limitation is liquidity,an issue which is solved by investing into funds. Therefore, even Deloitte acknowledges that while it is still arguable if originators can displace banks, funds investing in alt-lending offers an uncontested value no bank can match.

The experiences Prosper, OnDeck and Lending Club recently had with their institutional capital sources will open even more opportunities for alt-lending funds. Funds will provide steady capital, will be sophisticated and focused only on marketplace lending.

I look forward to funds driving the marketplace lending industry to new highs.
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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