- Today’s main news: DBRS takes rating actions on SoFi consumer loans. Relendex secondary trading platform tops 1M GBP. Xeenho closes new round of financing.
- Today’s main analysis: The current state of MPL in Japan.
- Today’s thought-provoking articles: Vanguard takes robo-advice to $65B. Female entrepreneurs more cagey about post-Brexit. 5 ways financial apps are changing banking.
- DBRS takes rating actions on SoFi consumer loans. GP:”Out of 7 reviewed SoFi securitizations, 1 was upgraded and 6 were confirmed. Strong performance for SoFi, again.”
- Vanguard rides robo-advice wave to $65B in assets. GP:”This is a lesson that can probably teach things for online lenders as well: what could happen if large institutions start operating in the same way. Example: Marcus by Goldman Sachs who originated $2bil already apparently. “AT: “Interesting that the largest robo-advisor is sitting at a desk in a traditional investment house. In fact, the two largest are both with traditional investment firms, beating out both Betterment and Wealthfront.”
- CleanCapital closes investment round led by fintech pioneers. AT: “There must be something in this startup that drawing this kind of attention. I’d like to know more.”
- Transparency a growing concern for alternative investing. AT: “Unfortunately, transparency may not be a key differentiator much longer. If everyone can boast about it, no one benefits from it any more than anyone else. While good for consumers, an increase in transparency among firms simply means a competitive playing field. Platforms will have to distinguish themselves on other grounds as transparency becomes an absolute expectation.”
- Tech gap widens between haves, have nots. AT: “The focus is on RIAs, which are likely to become a big deal as more investors take the reigns on their investments and move away from money managers.”
- Fintech brings residential real estate to the web. AT: “Not much new, but NASDAQ names names albeit mostly in the UK. Still, there is a little bit of insight into the online mortgage application process.”
- Suretly brings crowdvouching to the lending market, announces ICO.
- GDS Link joins Marketplace Lending Association.
- Lending Club’s Dolan joins Metromile. GP:”Metromile is a pay-per-mile insurance for cars and I would argue fits under the new insure-tech wave. A great transition for Dolan from the center of p2p lending when it was hot to insure-tech when it is hot. There aren’t many CFOs who have taken hot startups public and I would assume Metromile is likely to go in that direction. “
- Eight fledgling fintech providers win $250.
- Relendex secondary market tops 1M GBP. GP:”Happy to see volume and traction in secondary markets.”AT: “Congratulations. A great milestone.”
- Female entrepreneurs more fear post-Brexit more than male counterparts. AT: “Probably because men tend to be more confident even when they shouldn’t be.”
- TrueLayer raises $3M Series A to provide fintechs with easy access to bank APIs.
- Soldo raises $11M in round led by Accel.
- Creathor Venture, private investors put CHF 2.5M into Allthings.
- Zorin hires ex-Funding Circle underwriter.
- Five ways financial apps change banking. AT: “Attitudes about banking in Europe are completely different than in the U.S.”
- United States
- DBRS Takes Rating Actions on SoFi Consumer Loan Programs (DBRS), Rated: AAA
- Vanguard rides robo-advice wave to $ 65B in assets (InvestmentNews), Rated: AAA
- CleanCapital Closes Investment Round Led by FinTech Leaders and Pioneers (CleanCapital Email), Rated: A
- Transparency A Growing Concern for Alternative Investing (Plan Sponsor), Rated: A
- Tech Gap Widens Between Haves, Have-Nots (Financial Advisor IQ), Rated: A
- Fintech Brings Residential Real Estate To The Web (NASDAQ), Rated: A
- Suretly Brings Crowdvouching to the Lending Market, Announces ICO (Inside Bitcoins), Rated: A
- GDS Link Joins Marketplace Lending Association (PRWeb), Rated: B
- Lending Club’s Dolan Joins Metromile in California as Chief Financial Officer (Insurance Journal), Rated: B
- Eight Fledgling Fintech Providers Win Capital with CFSI Awards (Paybefore.com), Rated: B
- United Kingdom
- Relendex’s Secondary Trading Platform Tops £1 Million (Crowdfund Insider), Rated: AAA
- Female entrepreneurs more cagey about post-Brexit prospects (P2P Finance News), Rated: AAA
- TrueLayer raises $ 3M Series A to provide fintech companies with easy access to bank APIs (TechCrunch), Rated: A
- Soldo, a London fintech startup that offers a multi-user spending account, raises $11M led by Accel (TechCrunch), Rated: A
- Creathor Venture and private investors invest CHF 2.5 million in PropTech company Allthings (IT Business Net), Rated: A
- Zorin hires ex-Funding Circle underwriter (Bridging & Commercial), Rated: B
- Xeenho Closed a New Round of Financing for its Business Transformation (Xing Ping She Email), Rated: AAA
- European Union
- Bank to the future: five ways financial apps are changing banking (Banking Technology), Rated: AAA
- Australia/New Zealand
- Robots closer to getting go-ahead to give financial advice to humans (Stuff), Rated: AAA
- The Current State of Marketplace Lending in Japan (Lend Academy), Rated: AAA
- Consumer lending has dropped to ‘almost zero’ under new regulations – Rainfin CEO (Ventureburn), Rated: AAA
DBRS Takes Rating Actions on SoFi Consumer Loan Programs (DBRS), Rated: AAA
DBRS, Inc. (DBRS) has today reviewed seven ratings from four SoFi Consumer Loan Program U.S. structured finance asset-backed securities transactions. Of the seven outstanding publicly rated classes reviewed, six were confirmed and one was upgraded. For the ratings that were confirmed, performance trends are such that credit enhancement levels are sufficient to cover DBRS’s expected losses at their current respective rating levels. For the rating that was upgraded, performance trends are such that credit enhancement levels are sufficient to cover DBRS’s expected losses at their new rating level.
|Issuer||Debt Rated||Rating Action||Rating||Trend||Notes||Published||Issued|
|SoFi Consumer Loan Program 2016-1 LLC||Class A Notes||Upgraded||AA (sf)||—||Jun 20, 2017||US|
|SoFi Consumer Loan Program 2016-2 LLC||Class A Notes||Confirmed||A (sf)||—||Jun 20, 2017||US|
|SoFi Consumer Loan Program 2016-3 LLC||Class A Notes||Confirmed||A (sf)||—||Jun 20, 2017||US|
|SoFi Consumer Loan Program 2016-5 LLC||Class A Notes||Confirmed||A (sf)||—||Jun 20, 2017||US|
|SoFi Consumer Loan Program 2016-2 LLC||Class B Notes||Confirmed||BBB (sf)||—||Jun 20, 2017||US|
|SoFi Consumer Loan Program 2016-3 LLC||Class B Notes||Confirmed||BBB (sf)||—||Jun 20, 2017||US|
|SoFi Consumer Loan Program 2016-5 LLC||Class B Notes||Confirmed||BBB (sf)||—||Jun 20, 2017||US|
Relendex’s Secondary Trading Platform Tops £1 Million (Crowdfund Insider), Rated: AAA
Relendex, a secured peer to peer lending platform, has announced that its secondary market trading has surpassed the £1 million mark.
Relendex says this indicates that lenders have embraced the secondary platform. On the Relendex Resale Marketplace investors are able to buy and sell Loan Parts at par with no fees charged.
Female entrepreneurs more cagey about post-Brexit prospects (P2P Finance News), Rated: AAA
A poll by the peer-to-peer lender shows that less than half as many female business owners are confident about the success of their businesses post-Brexit, compared to their male counterparts.
The research, conducted by RateSetter Business Finance, has revealed that only 10 per cent of women business leaders believe that leaving the EU will be positive for their business.
This contrasts with 21 per cent of male business owners who have an optimistic outlook about their ventures after Brexit.
Additionally, 32.7 per cent of female business owners want to find a lender that understands their business and business model, compared with just 19 per cent of men.
TrueLayer raises $ 3M Series A to provide fintech companies with easy access to bank APIs (TechCrunch), Rated: A
TrueLayer, a London startup that’s built a developer platform to make it easy for fintech companies to access bank APIs — and ride the PSD2 gravy train — has raised $3 million in Series A funding. The round was led by Anthemis Group, with participation from existing investor Connect Ventures, and will be used by TrueLayer to expand its team and increase coverage of supported banks before opening up beyond beta testers later this year.
Launched in private beta in February, the TrueLayer developer platform currently supports things like account verification, KYC processes, and accessing transactional data for account aggregation, credit scoring, and risk assessment. It is available in the U.K. and Simoneschi says TrueLayer will expand to other EU countries later in 2018.
Soldo, a London fintech startup that offers a multi-user spending account, raises M led by Accel (TechCrunch), Rated: A
Soldo, the London-based fintech startup that offers a multi-user spending account, first launched for consumers and since tailored to businesses too, has raised $11 million in Series A funding. Venture Capital firm Accel led the round, with participation from Connect Ventures, InReach Ventures, U-Start and R204 Partners.
Creathor Venture and private investors invest CHF 2.5 million in PropTech company Allthings (IT Business Net), Rated: A
Creathor Venture, a pan-European venture capital firm, together with a circle of experienced private investors from the real estate industry invest CHF 2.5 million in German-Swiss property tech company Allthings Technologies AG. Allthings connects tenants, owners, property managers and developers of living and commercial property through a modular communication and service platform.
Zorin hires ex-Funding Circle underwriter (Bridging & Commercial), Rated: B
Colin Chung (pictured above) has been recruited as an associate director in the credit risk team, while Katy Katani (pictured below) has joined as head of business development.
Colin was previously at Funding Circle, where he was a senior property underwriter, and has over 10 years of experience in real estate finance.
Xeenho Closed a New Round of Financing for its Business Transformation (Xing Ping She Email), Rated: AAA
On Jun 20th, Xeenho announced to have finished their third round of financing. This round of financing was led by Hongshang Capital, with Jade Value and Hunan Culture & Art Industry Group participated. The financing amount was again reached to tens of millions of yuan. All the funds have been in place, and they are in the process of handling business changes.
Started as one of the first P2P loan funds in China, Xeenho has an accumulated volume of nearly 3 billion RMB to date. The excellent risk control and the big data application in fintech constitute the core value of Xeenho. Based on its self-developed IFRM risk control and big data system, Xeenho keeps the record of Zero Bad Debt, which makes the company developed as a guidance for due diligence, P2P rating, research report, P2P asset portfolio allocation for clients and investors.
In 2016, Xeenho launched a new Robo-Adivisor product – Xeenho Zhi Tou, attracting capital for different P2P platforms, and Xeenho provides guarantee in this process. In the late of the same year, Xeenho set up self-media platform – Xing Ping She, aiming at building an industrial ecosphere and providing services which is specially designed for specific fintech companies.
This A round of financing would be a fresh start to Xeenho. Dr. Yang Li, the co-founder and CEO of Xeenho said, “After A round of funding, we will continue to focus on business in big data mining, equity investment and information consultation, and explore to develop new business at the same time. We hope to realize the development of collectivization in the next three years, so as to build a complete system of financial ecology and become one of the leading fintech companies.”
Bank to the future: five ways financial apps are changing banking (Banking Technology), Rated: AAA
- Banks will face stiff competition from new wave of fintech start-ups – In the UK it is firms like Bean, Ernst, Moneybox, Pariti and Plum, to name just a handful, and this picture is repeated across Europe.
- New open data initiatives will mean unparalleled access to consumer data – In the UK, PSD2 is being delivered by the Open Banking project. Alongside this the Treasury is running the Pensions Dashboard project, which will liberate customer data on long-term retirement savings in the same way.
- New services will revolutionise who people trust for financial advice
- Personal finance dashboards (PFDs) will open the way for long-term savings as well as short-term financial management – Pensions dashboards already exist in many other European states including Denmark, the Netherlands and Sweden.
- The workplace will be key to the new market – In practice, the workplace is likely to be a highly successful channel for such services complementing employers’ pensions and employee benefits delivery. In the UK, auto-enrolment means nearly all employees will soon be members of a workplace pension scheme.
Robots closer to getting go-ahead to give financial advice to humans (Stuff), Rated: AAA
Getting personalised financial advice from a “robot” may be a step closer to becoming reality.
The Financial Markets Authority has asked for feedback on whether it should use its powers to allow personalised financial advice generated by a computer programme or algorithm.
Under current law, personalised advice, which takes into account an individual client’s financial situation and goals, can only be delivered by a human being.
The Current State of Marketplace Lending in Japan (Lend Academy), Rated: AAA
Marketplace lending growth in Japan has been slow compared to the U.S., Europe and China but that has started to change in the past three years. The market has been almost doubling each year and we expect this trend to continue through 2017. Investment volume was $140 million in 2014, $310 million in 2015 and $530 million in 2016. We estimate it to reach $1 billion this year.
Marketplace lending, also commonly referred as “social lending” in Japan, started as p2p lending around 2008 but struggled due to high default rates, which sometimes reached 30%. Since Japanese lending law prohibits interest rates above 15% in most cases, a 30% default rate was not sustainable for those businesses.
The industry average APR increased to 8.4% from 5.7% in two years, mainly due to newer entrants that were charging higher APRs. Default rates in the past three years have been close to zero due to platforms being more selective on who they lend money to.
Based on our research, average spread (i.e. margin) for crowdfunding platforms in Japan is 4%-5% annually. Typically crowdfunding platforms are lending at 13% and funding at 8%. Based on this margin, a crowdfunding platform needs to service portfolio of between $50 – $100 million to be break-even. Only a few crowdfunding platforms have reached this scale, however given the current market growth, many players will achieve this volume after 1-3 years of being in business.
Consumer lending has dropped to ‘almost zero’ under new regulations – Rainfin CEO (Ventureburn), Rated: AAA
Consumer lending on marketplace lending platform RainFin has ground to a halt since the new National Credit Regulations threshold came into effect on 11 November, the company’s chief executive Sean Emery said yesterday.
Under the new threshold, lenders who lend even one cent to consumers have be registered with the National Credit Regulator to do so.