- Today’s main news: LendUp closes $100M credit facility, surpasses $1B in originations. Canada’s Sensibill raises $17.3M, looks at global expansion.
- Today’s main analysis: TD Bank infographic: New data on SBOs.
- Today’s thought-provoking articles: Investors play waiting game for IFISAs. 3 ways mobile money changes transaction banking. Alipay vs. WeChat Pay. Crowdfunding the skyscraper.
- LendUp closes $100M credit facility, surpasses $1B in originations. GP:” A whole slew of fund raisings lately in the space. $100mil should give them enough for a little bit. The space is getting hot again on investments.”
- New data on SBOs. AT: “Interesting here is that 69% of SBO’s handle their own finances and female business owners are less likely to separate personal from business accounts.”
- Mambu launches Americas operations. GP:” More technology provider competition is great for the space.”
- LendIt announces keynote speakers for LendIt USA 2017. AT: “Featured speakers include government regulators such as OCC’s Thomas Curry and CFPB Director Richard Cordray. This could be the best LendIt yet.”
- Alt lending summit to focus on partnerships between banks, FinTech firms. AT: “This is going to be a big topic this year.”
- Crowdfunding the skyscraper. AT: “Very interesting read.”
- eOriginal joins MLA.
- Urjanet closes $20M Series C. GP:” Why is this interesting ? Perhaps one can use data like Urjanet’s for underwriting / financing electricity usage for large consumers? We have much more data available then ever before and we should explore what can be done with it.”
- Sensibill raises $17.3M, eyes global expansion. AT: “Canada is making some big moves at becoming a major global FinTech player.”
- Bahrain wants to be the next FinTech hub. GP:” Step 1: create a regulatory sand box. Step 2: enable investments. Step 3: find a way to get local companies to have access to a large market, perhaps India ?.”
- United States
- LendUp Closes Another $ 100 Million Credit Facility & Surpasses $ 1 Billion In Loan Originations (Yahoo! Finance), Rated: AAA
- New Data on SBOs (TD Bank Email), Rated: AAA
- Mambu launches Americas operations (Finextra), Rated: A
- Lendit Announces Keynote Speakers (PR Newswire), Rated: AAA
- Small Business Lending Partnerships Pros and Cons Between Banks, Fintech Firms Focus at Bank/Alternative Lending Summit (Military Technologies), Rated: A
- Crowdfunding the skyscraper (Curbed), Rated: A
- eOriginal Joins Marketplace Lending Association to Support Transparency, Responsible Industry Growth (IT Business Net), Rated: A
- Urjanet Closes $ 20M Series C Round to Expand in the Fintech Arena (Hypepotamus), Rated: A
- United Kingdom
- Investors play a waiting game for Innovative Finance Isas (Financial Times), Rated: AAA
- LendInvest responds to the UK Digital Strategy (LendInvest), Rated: A
- European Union
- WIDE Organises Women in Fintech Conference (Chronicle), Rated: A
- The three ways mobile money is changing transaction banking (The Asset), Rated: AAA
- Infographic: Alipay vs WeChat Pay (The Asset), Rated: AAA
- WeiyangX Fintech Review (Crowdfund Insider), Rated: A
- After raising $ 17-million, Toronto fintech firm eyes global expansion (The Globe and Mail), Rated: AAA
- Bahrain wants to be the next fintech hub (ImpactAlpha), Rated: A
LendUp Closes Another $ 100 Million Credit Facility & Surpasses $ 1 Billion In Loan Originations (Yahoo! Finance), Rated: AAA
LendUp, a socially responsible lender for the emerging middle class, today announced it has closed another $100 million credit facility with investment firm Victory Park Capital (VPC) to fund future loan growth. The facility brings LendUp’s total equity and debt financing to $325 million. The firm also announced it originated more than 3.3 million loans and surpassed $1 billion in loan originations since its inception in 2012.
LendUp’s mission is to provide anyone with a path to better financial health. The company offers technology-enabled loans and credit cards supported by embedded financial education and a focus on improving credit. LendUp has saved borrowers more than $55 million in interest and fees in 2016, up from $16 million in 2015, and its free credit education videos have been viewed more than 1.2 million times.
The Corporation for Enterprise Development (CFED) reports that more than 56 percent of Americans are shut out of mainstream banking because of poor credit or income volatility. Leveraging technology built in-house, LendUp offers exceptional products, service and, where available, credit reporting access to help break cycles of debt and ease income volatility. According to LendUp research:
- 70 percent of customers report having monthly income fluctuations, with one third reporting income fluctuations of more than $200 per month; and
- Customers who began 2015 with deep subprime credit scores and had been with LendUp for one year were 20 percent more likely to see a 50-point VantageScore increase that year vs. peers in a control group.
New Data on SBOs (TD Bank Email), Rated: AAA
In a recent survey of 300 U.S. SBOs, TD Bank found that more than a quarter of SBOs are using the same checking account for their personal and business finances. Although it may seem easier to consolidate all finances into one account, it can actually create several problems, including inaccurate cashflow reporting, miscalculated tax write offs and lack of access to credit card processing systems.
Additional data points from the survey include:
- Majority of SBOs (69%) handle their business finances themselves – they do not outsource to an accountant or third party service
- Female business owners are less likely to separate their checking accounts compared to their male counterparts (68% vs. 82%)
- 16.5% of SBOs say that getting a better handle on cash flow is a top priority this year
Mambu launches Americas operations (Finextra), Rated: A
Mambu is kicking off 2017 by opening new Miami offices and appointing a regional Managing Director to meet the growing demand for their platform in North America, Canada, Latin America and the Caribbean.
The office will support Mambu’s current 32 regional clients, including Grameen America which deploys the platform in 23 cities.
Edgardo Torres has been appointed as Managing Director to lead growth, support and operations, bringing a wealth of SaaS and enterprise technology knowledge combined with regional expertise.
Lendit Announces Keynote Speakers (PR Newswire), Rated: AAA
LendIt, the world’s largest lending and FinTech conference, returns to New York City on March 6 – 7, 2017 at the Jacob Javits Convention Center for a gathering of thousands of established and emerging CEO’s. For two days, some of the world’s most prominent FinTech CEO’s will focus on the hot button topics and issues exploring the future of finance, including: digital banking, investing, insurtech, blockchain, wealth management and real estate.
A partial list of keynote speakers include:
- Consumer Financial Protection Bureau (CFPB) – Richard Cordray, Director
- U.S. Department of the Treasury – Thomas Curry, Comptroller of the Currency
- United States Congress – Patrick McHenry, Congressman
- IBM Watson Group – Brian Walter, Global Industry Leader
- Lantern Capital and Former Apple CEO – John Sculley, Vice Chairman
- Grameen American (former CEO of Avon and Board Member of Apple & GE) – Andrea Jung, CEO
- Marcus by Goldman Sachs – Harit Talwar, CEO,
- American Express – Ash Gupta, President, Global Credit Risk & Information Management
- HSBC Bank – Jeremy K. Balkin, Head of Innovation
- Lending Club – Scott Sanborn, President & CEO
- OnDeck – Noah Breslow, CEO
- 10x Future Technologies and Former CEO of Barclays – Anthony Jenkins, Founder & CEO
Now in its fifth year, LendIt has grown to over 5,000 attendees from 40 countries and over 350 speakers.
Small Business Lending Partnerships Pros and Cons Between Banks, Fintech Firms Focus at Bank/Alternative Lending Summit (Military Technologies), Rated: A
Bank/Alternative Lender Strategic Partnership Summit (May 10-11 at the Princeton Club in NYC) will be narrowing the event focus to cover in-depth small business lending partnerships between banks and fintech firms for their 2017 program.
Bringing together a well thought out line-up of industry experts, the Bank/Alternative Lender Strategic Partnership Summit plans to examine the process of partnership from both sides.
Kevin Phillips, Kabbage’s head of corporate development and conference chair, believes that this year will see an uptick in bank/alternative lender partnerships.
In one-and-a-half-days, a diverse panel of senior industry executives from the American Banker’s Association, Cross River Bank, The Private Bank, along with fintech companies such as Fundation, Kabbage, LendKey, OnDeck, Orchard Platform and SmartBiz will be among key experts holding candid discussions on the opportunities, challenges, and the future of the small business lending industry in an interactive setting.
A hard look will be given to topics such as key factors for identifying an ideal partner; how to know when to walk away from a potential partnership; the ways banks and fintech companies are teaming up to improve underwriting and risk management; and, the essential steps for conducting due diligence.
Crowdfunding the skyscraper (Curbed), Rated: A
Now, he’s using the crowdfunding approach to develop real estate in New York City, one of the most valuable markets in the world, where he’s been based for 20 years. Two projects are already open, and three more are under construction. All five have been financed through crowdfunding.
So Ippolito started researching. He learned which crowdfunding sites focused on equity, where investors essentially become shareholders in a property, and which focused on debt, where investors are direct lenders to a property owner or mortgage holder. He compared the minimum investments that each site required and analyzed what kinds of returns they’d likely provide. He looked at what kinds of properties each site was offering, and how many projects they had to offer investors. After a few months, he felt confident enough to start investing. He also saw another business opportunity and launched The Real-Estate Crowdfunding Review, a website that compiles all his research and features rankings, and reviews all of the roughly 150 real estate crowdfunding websites now operating.
The current top ranking platform is PeerStreet, which primarily focuses on investments in existing private real estate loans. (Prodigy Network is ranked 19th.) Ippolito’s reviewhighlights PeerStreet’s $1,000 minimum investment as far more appealing than the field’s $10,000 average. He also notes the site’s transparency, allowing users to review the performances of all its past investments.
But in January, Ippolito reported that PeerStreet had seen the first foreclosure on one of its investments.
To do a project of this size, crowdfunding was the best option. So the developer, BD Promotores, partnered with Prodigy Network to build up a pool of people to fund the project. They fitted out a showroom to lure investors and advertised in magazines and on television. More than 3,000 individuals invested, raising roughly $145 million.
When it opens, the project will feature 457 apartments, 382 hotel rooms, 117 offices, and a three-story shopping center accessible from the street. Rents from these spaces will trickle down to the investors in the form of quarterly dividends.
The relatively low entry point and the comparative stability of physical real estate has made crowdfunding a successful development strategy in Colombia for Prodigy Network. It’s been a good way for more people to benefit financially from commercial real estate, Niño says, but it’s also a viable way for a real estate developer like Niño to get more projects built.
Those famous Financial District assets have helped enable Prodigy Network’s two completed New York projects, buildings featuring furnished apartments for short- and long-term stays that Niño calls “legal Airbnbs.”
For the crowd, the minimum investment for these projects ranges from $10,000 to $50,000; the three projects are expected to cost about $150 million. Roughly 1,200 investors from seven different countries will be co-owners, and the annual rate of return is projected to be between 12 percent and 16 percent.
eOriginal Joins Marketplace Lending Association to Support Transparency, Responsible Industry Growth (IT Business Net), Rated: A
As a member of the MLA, eOriginal will focus on empowering industry-wide discussion on how technology can effectively enhance and enable digital transaction capabilities to more securely manage and transfer loan agreements as financial assets once completed and signed. This commitment is aligned with the company’s belief that to support industry-wide adoption, processes must also support best practices to verify and authenticate with transparency for funders, investors, custodians, rating agencies and the customers.
Urjanet Closes $ 20M Series C Round to Expand in the Fintech Arena (Hypepotamus), Rated: A
Utility data startup Urjanet raised $20 million in a Series C round led by Oak HC/FT, a health IT/FinTech venture fund, this week. The company’s data solutions help multinational companies automate their accounting and utility bill processing, lowering their environmental footprint. Now, Urjanet hopes to expand its global network of providers and launch new data applications in the FinTech area.
Investors play a waiting game for Innovative Finance Isas (Financial Times), Rated: AAA
Peer-to-peer lending was always meant to shake up the traditional banking world. But investors using the UK’s biggest platforms remain frustrated that they still cannot hold their investments within a tax-free Isa wrapper.
Investors willing to lend through one of the four largest websites — Zopa, Funding Circle, RateSetter or MarketInvoice — can expect returns of more than 5 per cent a year, according to figures compiled by Liberum, the investment bank, and data provider AltFi Data. This will vary according to how much you are lending, and for how long — but looks very attractive compared to traditional savings products.
Maturity transformation — the practice of allowing borrowing for longer time periods than money was originally lent for — has also come under fire. RateSetter, one of the three largest UK lenders, ceased doing this last January.
Investors keen to put peer-to-peer loans into their Isa can still do so despite the absence of a product from the big lenders. According to the FCA, 22 smaller lenders have been granted authorisation and have, or will, apply to the tax authorities to launch Isas. However, obtaining FCA authorisation does not make this form of investing risk-free.
One fund manager with a professional interest in the peer-to-peer lending market said it was “kind of bizarre” that smaller companies with a shorter record would be able to launch an Isa before more established companies.
According to those in the industry, one of the issues the watchdog is investigating is whether peer-to-peer lenders are effectively acting like banks but with less regulation.
In the meantime, investors can use the Innovative Finance Isa wrapper to invest in “crowd bonds”, which are asset-backed bonds. Unlike peer-to-peer loans, investors will be backing one business rather multiple consumer or small business borrowers.
LendInvest responds to the UK Digital Strategy (LendInvest), Rated: A
LendInvest welcomes the publication of the UK Digital Strategy this week, a long-awaited prospectus for government support to enhance industry by the use of digital. The announcement of the strategy on 1st March underlines the zealous approach by government to secure the UK’s credentials as the global capital for innovation in tech.
The vision set out by Digital Minister Matt Hancock and Secretary of State for Culture, Media and Sport, Karen Bradley lays the foundations for a long-term strategy for FinTech, encouraging financial services firms using technology to evolve offline industries to improve services and products for everyone.
Putting investment into the UK’s emerging sectors of expertise, like artificial intelligence and cyber-security for example, will help financial services firms to scale-up and thrive.
For us at LendInvest, we are challenging the status quo in the £1.3 trillion mortgage market; exploring how technology can improve the customer experience in acquiring property finance.
WIDE Organises Women in Fintech Conference (Chronicle), Rated: A
Women in Digital Empowerment (WIDE) has organised a Women in Fintech Conference for 24 March 2017 at the RBC Investor and Treasury Services, from 16:00 until 19:00.
The purpose of this first conference, endorsed by ALFI and sponsored by RBC Investor and Treasury Services, is to provide our participants with a clear overview of the Fintech ecosystem in Luxembourg and to raise awareness of the opportunities offered to women in the Fintech Industry.
The three ways mobile money is changing transaction banking (The Asset), Rated: AAA
A record US$33 billion was transacted in Kenya, home of the famous M-Pesa service, in 2016, as revealed by data from the Central Bank of Kenya. According to Reportlinker, the global mobile money market is predicted to grow at a CAGR (compound annual growth rate) of around 38.9% by 2025 and reach around US$405 billion in size. Data released this week from GSMA states that there is around 500 million registered mobile money accounts globally in 2016.
1 – Digitize collections
India-based mobile wallet provider Paytm wallet announced late last year that it would be partnering up with insurance firms in handling some of their digital collections.
2 – Corporate payments
With physical cash payments being a manual and time consuming process, Gojek encouraged it’s over 95,000 drivers to use CIMB’s Rekening Ponsel system that linked Gojek’s cash management system to a mobile-based e-wallet with the driver’s mobile number acting as a bank account number.
3 – Support financing services
Union Bank of the Philippines, for example, partnered with Gcash Mobile Money in creating a cash management solution for TSPI (Tulay Sa Pag Unlad) a microfinance NGO. Under that partnership both companies will provide collection and disbursement services for TSPI via mobile technology allowing borrowers to receive funding remotely.
Infographic: Alipay vs WeChat Pay (The Asset), Rated: AAA
Is it true that everyone talks on WeChat, but makes payments using Alipay?
WeiyangX Fintech Review (Crowdfund Insider), Rated: A
As of January 20, 2017, there were 188 online lending platforms that have signed the funds custody agreement with banks, which occupies 8% of all platforms in China. However, only 99 platforms have actually finished the custody process, which accounted for 4% of the total number of platforms.
P2P online lending platform China Rapid Finance has been reported to hold an IPO in the US later this year with the aim to raise at least $100 million.
On February 25rd, China Blockchain Applied Research Center was officially launched in Shanghai.
After raising $ 17-million, Toronto fintech firm eyes global expansion (The Globe and Mail), Rated: AAA
Sensibill Inc., a Toronto-based startup that offers digital receipt technology for banks, has raised $17.3-million to supercharge its global expansion and dig deeper into artificial intelligence.
It’s one of the largest series A early-stage financing rounds for a Canadian technology startup and signals the growing quality and influence of financial technology (fintech) companies in the market.
The financing is being led by fintech-focused Information Venture Partners of Toronto, which is throwing in more than $5-million, followed by Toronto-based OpenText Enterprise Apps Fund and San Francisco-based Operative Capital, among others. Toronto-based Impression Ventures, which was a key investor when Sensibill raised $2-million in 2015, is also committing more funds to this round.
The financing will also help Sensibill improve its products using artificial intelligence (AI) and so-called “deep learning” technology, which is when algorithms can make decisions about data.
The new financing will also be used to expand Sensibill’s staff from about 50 today, to more than 100 by the end of the year, Mr. Gross says. The bulk of the jobs will continue to be based in Toronto, with sales and marketing positions in other countries where Sensibill is expanding.
Bahrain wants to be the next fintech hub (ImpactAlpha), Rated: A
The small Persian Gulf country is emulating Singapore, which is positioning itself as the center of fintech in east Asia.
The goal is to make Bahrain where “entrepreneurs come to test their ideas and services,” said David Parker who heads Bahrain’s Economic Development Board.