- Today’s main news: OnDeck posts quarterly adjusted profit. OnDeck expands partnership with JPMorgan Chase. More than half Wellesley borrowers are in default or behind on payments. Tencent tests credit scoring. Westpac Banking invests in zipMoney. SoftBank says Q1 profit jumped 50.1% after adding Vision Fund. Fintech investments tripled in Singapore.
- Today’s main analysis: LendingClub Q2 earnings.
- Today’s thought-provoking articles: OnDeck to focus on better borrowers. Online lenders clear a low bar, but higher ones ahead. The growing alternative finance industry. Tencent now No. 1 Chinese internet firm. China’s central bank to regulate fintech. Why African fintech startups are more attractive to investors.
- OnDeck posts surprise quarterly adjusted profit. AT: “I like these kinds of surprises. If OnDeck turns itself around, and it looks like it’s going to, it could be an even bigger story than the LendingClub turn around. Maybe pundits will quit talking about a buyout.”
- OnDeck to focus on better borrowers, expanded partnerships. AT: “This is smart business. Borrowers are the lifeblood of the business. If OnDeck can reduce risk by creating better risk assessment tools, make smart loans, and develop good partnerships that benefit both partners, we could see a different company in 2-3 years.”
- OnDeck Capital up more than 6% after earnings beat.
- OnDeck announces expanded partnership with JPMorgan Chase. AT: “Good for four years, which is well enough time to turn the boat around.”
- Chase extends relationship with OnDeck.
- Why OnDeck Capital stock jumped more than 20% on Monday. AT: “The Motley Fool’s analyses are always interesting. It seems investors like OnDeck’s plans to focus on loan quality. Of course they do.”
- LendingClub Q2 2017 earnings.
- LendingClub reports Q2 results.
- LendingClub shares soar 13% on smaller loss.
- LendingClub shares rise 8%.
- Online lenders upbeat about turnaround progress, but there are still worries.
- Online lenders clear low bar to find higher ones ahead. AT: “Increased competition should only worry those without a strong value proposition. It should be welcomed by those who have one.”
- Fiserv raises offer to Monitise to $98M.
- LendingRobot Series Q2 report.
- Experian Legislative Update 161.
- 4 reasons online lenders innovate with purchase cards.
- PayNet introduces new risk management tool.
- FDIC defends right to charter new banks.
- The U.S. online lending rumor mill.
- Cities where student loan borrowers struggle with debt the most. AT: “Interesting that Dallas, Texas is where student loan borrowers struggle the least, but Fort Worth is No. 2 on where they struggle the most.”
- Marketplace lending explained for wealth managers.
- The growing alternative finance industry.
- Welllesley fights toxic loans. AT: “I don’t see how any lender can survive with more than half of its loans struggling.”
- Tandem acquires Harrods Bank.
- Institutional investor selling down stake in VPC Specialty Lending.
- VC firm behind Zopa to judge PitchIt funding competition.
- Tencent tests credit scoring.
- Top 100 Chinese internet firms: Tencent is No. 1. AT: “Congratulations for overcoming Alibaba. Not an insignificant feat.”
- Central bank to regulate fintech.
- Weli Dai now the largest microcredit platform in China. AT: “Congratulations.”
- TNG Fintech Group Inc. close to $500M valuation.
- Podcast: Interview with Jeffrey Chen of ZhongAn Insurance.
- People’s Bank of China eyes fintech.
- Senate to mull Financial Choice Act, UK to tighten controls on fintech.
- Visa and its QR code expedition.
- SoftBank says Q1 profit over 50%.
- Fintech investments tripled in Singapore.
- UangTemen secures $12M in Series A.
- United States
- Online lender OnDeck posts surprise quarterly adjusted profit (NASDAQ), Rated: AAA
- OnDeck Will Focus on Better Borrowers, Expanded Partnerships to Grow Originations (Bank Innovation), Rated: AAA
- OnDeck Capital up more than 6% after earnings beat (Seeking Alpha), Rated: AAA
- OnDeck announces expanded partnership with JPMorgan Chase (MarketWatch), Rated: AAA
- Chase extends relationship with OnDeck (Finextra), Rated: A
- Why On Deck Capital Stock Jumped More Than 20% on Monday (The Motley Fool), Rated: A
- Lending Club Q2 2017 Earnings – Back to Growth (Lend Academy), Rated: AAA
- Lending Club Corp.: LendingClub Reports Second Quarter 2017 Results (TWST), Rated: A
- LendingClub Shares Soar 13% on Smaller Loss (Fortune), Rated: A
- LendingClub shares rise 8 percent on positive outlook, higher revenue (Reuters), Rated: A
- Online lenders upbeat about turnaround progress, but worries linger (Today Online), Rated: A
- Online Lenders Clear a Low Bar—Higher Ones Lie Ahead (WSJ), Rated: AAA
- Fintech Firm Fiserv Raises Offer for Monitise to $ 98 Million (The New York Times), Rated: A
- LendingRobot Series Second Quarter Report (LendingRobot), Rated: A
- Legislative Update 161 (Experian Email), Rated: A
- 4 Reasons Online Lenders Are Innovating With Purchasing Cards (Entrepreneur), Rated: A
- New Financial Technology Upgrades Bank’s Credit Review Process (PayNet Email), Rated: A
- FDIC defends right to charter new banks against OCC criticism (American Banker), Rated: A
- Rumour mill churns in US online lending sector (AltFi), Rated: A
- Cities where student loan borrowers struggle with debt the most (Credible), Rated: A
- Marketplace Lending Explained (WealthManagement.com), Rated: A
- United Kingdom
- The Growing Alternative Finance Industry (Business Zone), Rated: AAA
- Toxic loans blight property peer-to-peer lender Wellesley – with more than half its borrowers behind on payments or in default (This is Money), Rated: AAA
- Online lender Tandem acquires Harrods Bank in bid to expand services (Belfast Telegraph), Rated: A
- The institutional investor selling down its stake in VPC Speciality Lending (AltFi), Rated: A
- VC firm behind Zopa among judges at PitchIt funding competition (P2P Finance News), Rated: B
- Tencent credit check takes mobile payments battle to Alibaba (Financial Times), Rated: AAA
- Top 100 List of Chinese Internet firms in 2017: Tencent surpassed Alibaba to become NO.1, and Letv was Out of the List. (Xing Ping She), Rated: AAA
- Central bank to regulate rapidly growing fintech (China Daily), Rated: AAA
- With $ 3.58 bn in newly increased loan balance, Weli Dai becomes the largest microcredit platform in China (Xing Ping She), Rated: A
- Hong Kong startup close to US$ 500mil valuation (The Star), Rated: A
- Jeffrey Chen of ZhongAn Insurance (Lend Academy), Rated: A
- People’s Bank of China Has Fintech on Its Mind (Fox Business), Rated: A
- European Union
- Fellow Finance Adds Invoice Financing (P2P-Banking), Rated: A
- Balderton Capital on European Fintech (Stitcher), Rated: A
- Senate To Mull Financial Choice Act, UK Officials Look For Tighter Controls (PYMNTS), Rated: A
- Visa And The QR Code Evolution/Revolution (PYMNTS), Rated: A
- Westpac Banking Invests $ 40 Million into zipMoney (Crowdfund Insider), Rated: AAA
- How technology is helping investors achieve their financial aspirations (Financial Express), Rated: A
- Japan’s SoftBank says Q1 profit jumps 50.1% after inclusion of Vision Fund (CNBC), Rated: AAA
- Fintech investments tripled in Singapore (The Star), Rated: AAA
- Indonesian P2P Lending Platform UangTeman Secures $12 Million During Series A Funding Round Led By K2 Venture Capital (Crowdfund Insider), Rated: A
- Middle East
- UAE Authorities Plan SMB Crowdfunding Framework (PYMNTS), Rated: AAA
- Latin America
- Mexican fund invests in peer-to-peer lending network (Latin Lawyer), Rated: A
- Why African fintech startups are becoming even more attractive for investors (Quartz), Rated: AAA
Online lender OnDeck posts surprise quarterly adjusted profit (NASDAQ), Rated: AAA
Online lender OnDeck Capital <ONDK.N> posted a surprise quarterly adjusted profit on Monday, driven by lower costs and higher interest income.
Excluding items, OnDeck earned 2 cents per share in the second quarter ended June 30, compared with the average analyst estimate of loss of 1 cent, according to Thomson Reuters I/B/E/S.
Net loss attributable to common shareholders narrowed to $1.49 million, or 2 cents per share, in the quarter, from a loss of $17.9 million, or 25 cents per share, a year earlier.
Originations fell 21.3 percent to $464.4 million.
Operating expenses fell about 6.3 percent to $44.6 million.
OnDeck Will Focus on Better Borrowers, Expanded Partnerships to Grow Originations (Bank Innovation), Rated: AAA
The online lender will continue this focus on higher quality borrowers going into the remainder of 2017, and will also be expanding several of its loan features, including prepaid benefits for term loans and a “more tailored” underwriting experience for businesses, said Breslow.
OnDeck Capital up more than 6% after earnings beat (Seeking Alpha), Rated: AAA
- Adjusted EBITDA of $3.3M vs. a negative $12.4M a year earlier.
- Full-year guidance is reiterated: Revenue of $342M-$352M, and adjusted EBITDA of $5M-$15M. Q3 revenue is seen at $82M-$86M, with adjusted EBITDA of $1M-$5M.
OnDeck announces expanded partnership with JPMorgan Chase (MarketWatch), Rated: AAA
Chase extends relationship with OnDeck (Finextra), Rated: A
JPMorgan Chase (NYSE: JPM) and OnDeck (NYSE: ONDK) today announced a contract extension to continue their collaboration on the bank’s digital small business lending product, Chase Business Quick Capital, for up to four years.
Why On Deck Capital Stock Jumped More Than 20% on Monday (The Motley Fool), Rated: A
Shares of On Deck Capital (NYSE:ONDK) were up more than 21% as of 3:15 p.m. EDT, after the company announced a smaller net loss during the second quarter and a promising expansion in its partnership with JPMorgan Chase (NYSE:JPM). Shares of LendingClub(NYSE:LC), its primary rival in the world of online lending, rose 7%, as investors see On Deck’s recent performance as a good omen for the industry as a whole.
A focus on higher-quality borrowers seems to have relaxed investors’ worries about the company’s loan quality, a perennial concern given that the average On Deck loan carries an APR in excess of 40% per year.
Lending Club Q2 2017 Earnings – Back to Growth (Lend Academy), Rated: AAA
Lending Club’s second quarter earnings marked an important milestone for the company – a return to growth. Originations have been hovering around $1.9 billion since Q2 of last year. This quarter Lending Club announced originations of $2.15 billion for the quarter, up 10% from the prior quarter of $1.96 billion. While this is still down from their previous highs, it shows that the company is back on a growth trajectory.
Last quarter the company announced banks were funding 40% of loans, but that reached higher in the second quarter to 44%.
Lending Club Corp.: LendingClub Reports Second Quarter 2017 Results (TWST), Rated: A
- Achieved 10% sequential growth to over $2.1 billion in originations, driven by strong borrower demand
- Successfully launched multiple conversion initiatives, including pricing optimization and a redesigned website
- Improved sales and marketing efficiency by over 7% sequentially
- Credit continues to perform in line with expectations as observed in both vintage and portfolio trendsInvestors
- Successfully executed the first self-sponsored securitization thereby opening a new funding source, expanding the investor base with 20 new investors, and generating a new repeatable revenue stream
- Record number of managed accounts and institutional investors participating on the platform in the quarter
- Successfully launched new iOS mobile application for retail investors
LendingClub Shares Soar 13% on Smaller Loss (Fortune), Rated: A
Online lending platform operator LendingClub reported a smaller loss on Monday, helped by higher net interest income and a drop in expenses.
Shares of the company (LC, +12.86%) were up 13.2% at $5.90 in after-hours trading.
LendingClub shares rise 8 percent on positive outlook, higher revenue (Reuters), Rated: A
Online lender LendingClub Corp (LC.N) raised its earnings outlook on Monday after reporting the second-highest quarterly revenue in its history and a drop in costs, sending shares up nearly 8 percent.
LendingClub now expects full-year total net revenue to be in the range of $585 million to $600 million, compared with its earlier forecast of $575 million to $595 million.
Shares of the company, which connects consumers looking for loans with individual or institutional investors such as banks through its website, were up 7.8 percent at $5.46 in after-hours trading.
Online lenders upbeat about turnaround progress, but worries linger (Today Online), Rated: A
LendingClub Corp <LC.N> and OnDeck Capital Inc <ONDK.N> surprised investors on Monday with strong growth forecasts that sent the online lenders’ stocks soaring, but analysts said the sector’s health was still a concern.
OnDeck shares closed 18.5 percent higher at $5, and LendingClub ended up 4.8 percent $5.46. The stocks rose in after-hours trading but remain far below their initial public offering prices of $20 and $15, respectively.
Executives of both companies were upbeat about the progress in their turnaround plans after they reported second-quarter results.
Earnest Corp is looking to sell itself for $200 million, Bloomberg News reported on Friday, far less than the $300 million it has raised from investors.
Online Lenders Clear a Low Bar—Higher Ones Lie Ahead (WSJ), Rated: AAA
The online lending industry regained its footing in the second quarter, more than a year after it was knocked off-balance by severe disruptions in the loan marketplace. But investors’ sky-high hopes for the sector may have been lowered permanently.
Investors also were relieved that On Deck reiterated it would turn profitable later this year. Shares rose a sharp 18.5% Monday, but they fetch only about a fourth of their December 2014 IPO price, a sign of just how much the hype around these lenders has deflated.
Crucially, On Deck has moved on from funding loans through an online marketplace, the aspect of its business model that was truly disruptive. It now funds the vast majority through its own balance sheet, making On Deck more like an ordinary bank.
Both companies have to worry about rising competition. Innovative payment companies like Square and PayPal are extending more microloans to their merchant customers. Meanwhile, giants of finance like Goldman Sachs are extending more unsecured personal loans, which is LendingClub’s sweet spot.
Fintech Firm Fiserv Raises Offer for Monitise to $ 98 Million (The New York Times), Rated: A
U.S. financial technology provider Fiserv made an improved offer for Monitise worth about 75 million pounds ($98 million) on Monday, hoping to secure backing from the British financial services technology group’s investors.
Fiserv’s earlier offer, which valued the group at about 70 million pounds, drew criticism from Monitise’s investors led by Cavendish Asset Management, for being too low, given that the British group was worth over 1 billion pounds three year ago.
Fiserv’s final offer of 3.1 pence in cash per share represents a premium of 34.8 percent over Monitise’s closing price on June 12, the last before the initial offer was made.
Banco Santander, Monitise’s top shareholder with a 4.67 percent stake, had submitted a letter of intent to back the deal, as had Visa Inc, a large customer and investor with a 2.41 percent stake.
LendingRobot Series Second Quarter Report (LendingRobot), Rated: A
LendingRobot Series finished the second quarter with a healthy YTD aggregated return of 2.7%. Each Series’ return and portfolio health is in line with projections. Since April 1st, LendingRobot Series has added over 2,800 loans to its portfolio, more than doubling the number of loans held in each series.
Legislative Update 161 (Experian Email), Rated: A
Highlights this issue:
- On July 10, the CFPB published a final rule prohibiting the use of mandatory predispute arbitration clauses that prevent class action lawsuits in consumer contracts for a wide array of financial products. The final rule was published in the Federal Register on July 19, and will become effective 60 days after that date, or September 18. All consumer contracts with arbitration clauses will need to comply with the rule within 180 days of the effective date, which will be March 19, 2018.
- The House of Representatives is working to pass 12 appropriations bills by September 30 to fund federal agencies for the Fiscal Year 2018. The House Appropriations Committee passed the spending bill for financial regulatory agencies on July 13. The measure included several provisions important to Experian and our clients.
- On July 19, Representatives Patrick McHenry (R-N.C.) and Gregory Meeks (DNY) introduced the Protecting Consumers Access to Credit Act. The bill would codify the legal precedent under federal banking laws that preempts a loan’s interest as valid when made.
- Legislators in California continue to debate legislation that would enact a broadband privacy law in the state, similar to the rule issued by the FCC and then overturned by Congress. A.B. 375 would prohibit an internet service provider from using, disclosing, selling or permitting access to customer personal information.
Read the full update here.
4 Reasons Online Lenders Are Innovating With Purchasing Cards (Entrepreneur), Rated: A
In recent years, Kabbage and others have stepped up to introduce a purchasing card product to their borrowers, and with their early success, many lenders are now following suit for the following four reasons:
- Staying on top of the customer’s mind
- Speaking the language of large corporate partner targets
- Underwriting use of funds
- Revenue sharing
New Financial Technology Upgrades Bank’s Credit Review Process (PayNet Email), Rated: A
Enables Banks To Review All Credits and Focus on the Highest Risks
The real challenge is convincing bank management that they do not have to apply the same credit review process to the entire portfolio. Adopting different processes based upon exposure size and measured risk (APD for example) should be the goal of every bank. In other words, focus credit review efforts to those accounts that represent the greatest risk to the bank – and that is what you are hoping to do with your credit review process.
Conducting credit reviews are a “waste of time” in most cases because nothing has changed. What form that documentation takes is where PayNet can be most helpful to the prospect.
PayNet is introducing PayNet Credit Review Express, a risk management tool which streamlines the credit review process making credit review easier and less costly.
Credit Review Express assesses the credit risk of each C&I borrower each month. Banks can assign their definition of risk from delinquency to probability of default to assign high, medium or low risk to each borrower. Currently, PayNet sees less than 2% of C&I borrowers as high risk credits. Other features include automated action steps (such as Watch, Restructure, Work-out) and a customized dashboard to monitor and track activity.
FDIC defends right to charter new banks against OCC criticism (American Banker), Rated: A
The Federal Deposit Insurance Corp. defended its authority to approve prospective new banks in response to suggestions by acting Comptroller of the Currency Keith Noreika that his agency should be able to approve applications on its own.
Rumour mill churns in US online lending sector (AltFi), Rated: A
Whispers abound of a major financing round, an acquisition and an IPO within the US online lending space.
Perhaps chief among the rumours was the suggestion that SoFi may at last be on the brink of an IPO that was first mooted by CEO Mike Cagney in 2014.
Cities where student loan borrowers struggle with debt the most (Credible), Rated: A
So it’s important for borrowers, especially recent grads, to think about the best places to live — the cities in which they’re not only likely to find a well-paying job, but also where rents and other living expenses aren’t so exorbitant so as to add to their pile of debt.
5 cities where student loans borrowers struggle the most with debt:
5 cities where student loans borrowers struggle the least with debt:
Marketplace Lending Explained (WealthManagement.com), Rated: A
Marketplace lending has grown by nearly 150 percent on a compound annual basis for the last half-decade. Strong growth and real longevity mean that most advisors have to consider the role that marketplace lending plays in their clients’ portfolios.
Refinancing high-rate credit card debt or other hard-money-type loans among high-quality borrowers via a marketplace lender is sensible and provides good value to all parties.
As part of a fixed income allocation, what are the risks in marketplace loans? There is the credit risk of the borrower first and foremost—here the asset can be seen as clearly pro-cyclical; in other words, as the economy improves, the asset strengthens. Correspondingly, as the economy weakens, the credit of the borrower will weaken. Additionally, there has recently been some weakness in consumer credit, primarily in auto loans and credit card defaults, though these have been largely limited to the subprime aspects of these loan categories.
The Growing Alternative Finance Industry (Business Zone), Rated: AAA
Six of the leading equity crowdfunding platforms that form the OFF3R Index raised nearly £130M in 2017 for UK private companies. This is £2M above the previous half yearly record that was reached back in the second half of 2015. March 2017, where Over £40 million was raised, buoyed the latest data and the period as a whole was characterised by some very large fundraises from Q1 2017.
The data also revealed that peer to peer lendinglevels continue to rise in the UK. The peer to peer lending statistics showed that over £1.8 billion was lent in the first half of 2017 by the nine platforms that make up the OFF3R Index. This is an increase of over £350 million from the previous half year period at the end of 2016.
The data also revealed that Assetz Capital had a record breaking month in June 2017. The total amount lent of over £30 million by the platform was higher than any previous period since the OFF3R Index began.
Toxic loans blight property peer-to-peer lender Wellesley – with more than half its borrowers behind on payments or in default (This is Money), Rated: AAA
More than half of the customers of an internet loan firm run by an aristocratic financier are behind on their payments or in default, the Mail can reveal.
Wellesley, a peer-to-peer lender which allows property developers to borrow cash from savers, is grappling with losses on its loan book.
Online lender Tandem acquires Harrods Bank in bid to expand services (Belfast Telegraph), Rated: A
Start-up lender Tandem has snapped up Harrods Bank in a deal that will bring it closer to launching a savings account.
The undisclosed deal will hand the online-only lender £80 million of additional capital and enable it to regain its banking licence , if it wins regulatory backing.
Old Mutual, a sigificant shareholder in the £351m VPC Speciality Lending fund, has further reduced its holding in the closed ended portfolio following previous reductions in exposure earlier in the year.
Its holding in the fund fell below 6 per cent back in March 2017, now it has sold more shares with its stake now less than 4.99 per cent, according to regulatory filings.
VC firm behind Zopa among judges at PitchIt funding competition (P2P Finance News), Rated: B
A VENTURE capital (VC) firm that backed Zopa in its early days has been named among judges for the second annual PitchIt Europe competition.
Rob Moffat, partner at Balderton Capital, an early Zopa backer, will be one of the VC judges alongside Seedcamp’s Reshma Sohoni, Blenheim Chalcot’s Dan Cobley and managing director of CommerzVentures Patrick Meisberger.
Tencent credit check takes mobile payments battle to Alibaba (Financial Times), Rated: AAA
Tencent is developing a credit scoring system as it ramps up its battle with rival Alibaba for a share of China’s $5.5tn mobile payments market.
Ant Financial, Alibaba’s payments affiliate, launched its Sesame Credit two years ago, parlaying its data on consumers into a measure of their trustworthiness, providing comfort for small businesses and consumers alike.
Credit scoring is popular in China, especially among younger subscribers who lack a credit history but might be eligible for a high rating that would let them rent hotel rooms, bikes or phone chargers without leaving a deposit. The services are particularly valuable given the lack of access to credit cards in the country.
Tencent is testing a credit scoring service among a small group of its subscribers, upping the stakes as the two tech titans engage in an aggressive promotion this week encouraging Chinese to forgo cash in favour of payments made with a swipe of the phone.
Top 100 List of Chinese Internet firms in 2017: Tencent surpassed Alibaba to become NO.1, and Letv was Out of the List. (Xing Ping She), Rated: AAA
Recently, Internet Society of China (ISA) and the information center of Industry and Information Technology Ministry Jointly issued the list of “China’s Top 100 Internet Companies in 2017”. For this time, Tencent overtook Alibaba to become the No.1. Tencent, Alibaba and Baidu were still the top three for five consecutive years, while Letv was out of the list.
The top 10 of the list were:
- No.1 Tencent
- No.2 Alibaba
- No.3 Baidu
- No.4 Jingdong
- No.5 NetEase
- No.6 Sina
- No.7 Sohu
- No.8 Meituan
- No.9 Ctrip
- No.10 360
The list of “China’s top 100 Internet Companies” has been published every year since 2013 and has been published five times so far.The evaluation index combines seven core indicators of enterprise scale, profitability, innovation, growth, influence and social responsibility.
Central bank to regulate rapidly growing fintech (China Daily), Rated: AAA
In a report released last weekend, the People’s Bank of China said some financial products offered through internet channels by fintech companies are “systemically important” and hence will be included in its macro-prudential assessment or MPA.
The aim is to prevent cyclical risks and cross-market risk transmission, it said.
Analysts said this is the first time that the PBOC said it will include fintech businesses in its MPA.
With $ 3.58 bn in newly increased loan balance, Weli Dai becomes the largest microcredit platform in China (Xing Ping She), Rated: A
On 7th August, a Webank staff said in WeChat Moments that the loan balance of Weli Dai reached a milestone of over 100 billion RMB (equivalent to $14.91 bn). In a speech at the LendIt on July 16, Fang Zhengyu, the director of retail credit section in Webank, revealed that the loan balance of Weli Dai was $1.13 bn. And it has increased by $3.58 bn within just 22 days. What an amazing growth!
Weli Dai is focused on providing a cash loans product, with the loans amount from ￥500 to ￥300,000, and is operated in pure online pattern. With its white list invitation system, Weli Dai identifies the target customers effectively. The loan period is flexible from one day to twenty months, which makes users borrow and repay money at any time. Many factors contributed to the performance of Webank today, the most important is that Webank developed its business in the huge customer base of QQ and WeChat. Besides, Webank has built partnerships with nearly 40 banks for jointly making loans.
Hong Kong startup close to US$ 500mil valuation (The Star), Rated: A
TNG FinTech Group Inc, a Hong Kong-based digital wallet operator founded in 2013, is poised to close a funding round and is targeting a valuation of about US$500mil, according to a person familiar with the matter.
It has attracted almost US$60mil in the series A round from investors including a Beijing-based private equity fund, said the person, who asked not to be named discussing private deliberations.
TNG, which offers global money transfers, foreign-exchange transactions and bill payments, expects to be profitable this year and is targeting a listing in either New York or Hong Kong by 2019, the person said.
Jeffrey Chen of ZhongAn Insurance (Lend Academy), Rated: A
Our next guest on the Lend Academy Podcast is Jin (Jeffrey) Chen, the CEO of ZhongAn Insurance. I sat down with him when I was in Shanghai recently for Lang Di Fintech (LendIt’s Chinese event) and we conducted this interview with the assistance of his translator.
People’s Bank of China Has Fintech on Its Mind (Fox Business), Rated: A
The People’s Bank of China said in a report that it is considering expanding its risk-assessment system beyond banks to include major online financial businesses. Last month, it reached agreement with 45 nonbank financial firms– including payment systems affiliated with internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd.–on joining a new payment-clearing platform called Wanglian, according to listed-company documents.
This effectively gives the PBOC a clearer view of payments, enhancing regulation, said Tencent, which owns the TenPay payment system.
Fellow Finance Adds Invoice Financing (P2P-Banking), Rated: A
Finnish p2p lending service Fellow Finance has opened a new invoice finance service for companies, which allows businesses to convert their trade receivables into cash immediately. In the new invoice finance service, a company gets funding against its invoice receivables directly from investors.
In adjacent Estonia p2p lending marketplace Investly, which specializes on invoice financing for Estonian and UK SMEs, is growing. The last figures we reported for them show 78% month on month and 319% y-o-y growth.
Balderton Capital on European Fintech (Stitcher), Rated: A
Rob Moffat is a Partner at Balderton Capital, a London-based venture capital firm that has invested in fintech businesses including GoCardless, Revolut, Crowdcube, Nutmeg, Seedcamp, ComplyAdvantage, Wonga, Zopa and more. Prior to joining Balderton, Rob worked at Bain & Company and Google. Rob holds degrees from Cambridge and INSEAD.
Listen to the podcast here.
Senate To Mull Financial Choice Act, UK Officials Look For Tighter Controls (PYMNTS), Rated: A
As has been noted in the financial and trade press, the Financial Choice Act, which was passed last month by the U.S. House of Representatives, now awaits a vote in the U.S. Senate.
In other regulatory news, one executive in Britain is calling for tighter financial regulations in the United Kingdom. Douglas Flint, departing chairman of Britain’s largest bank, HSBC, said in a statement that, amid issues such as Brexit and a revamp of the European financial order, a lack of homogeneity in regulation means there should be cooperation between overseers to find — and stop — “bad actors.” Flint advocated that “greater cooperation between the public and private sectors, together with a refresh of bank secrecy laws and regulation designed for a different age, would significantly increase the effectiveness of our joint efforts.”
Visa And The QR Code Evolution/Revolution (PYMNTS), Rated: A
As it turns out, putting that spec on the shelf helped to inform the development of the EMVCo QR code standard, which was released yesterday into a payments ecosystem that looks at them as anything but uninteresting.
China is a prime example as, over the course of the last five years, the QR code-based mobile payment has almost entirely displaced cash in the country — and leapfrogged credit and debit cards — to become Chinese consumers’ preferred alternative for payment. There are $5.5 trillion worth of mobile payments made in China per year, the vast, vast majority of which are handled via QR code.
But perhaps most striking is India and its government’s November 2016 decision to move toward a cashless society. That led the country to the accompanying adoption of a QR code-focused payments scheme based on Visa’s mVisa standard.
Getting To Scale
Visa is currently developing mVisa as a worldwide solution. The key to scale, Shrauger told Webster, is making it useful and accessible for their two client groups — merchants and their customers.
Westpac Banking Invests $ 40 Million into zipMoney (Crowdfund Insider), Rated: AAA
zipMoney (ASX:ZML) has announced a $40 million strategic investment from Westpac Banking (ASX:WBC). The investment was paired with an agreement for the two companies to explore the integration of Zip’s products and services into Westpac’s network across Australia. The investment will be by subscription of ordinary equity of 49,382,716 shares at a price of $0.81 per share. This represents a 14.1% premium over the close of $0.71 on August 4th.
How technology is helping investors achieve their financial aspirations (Financial Express), Rated: A
Most Indians save first and think of spending later. However, when it comes time for them to plan their expenses, they end up relying on mental estimates of their financial position. As a result, most people are never confident of 1) how much to save and 2) whether they can reach their financial aspirations with their current investment plan. This is especially true for young professionals who want to save for a secure future but also want a more fulfilling life experience. What is required is financial advice that delivers the answers to these questions in a clear and quantified way.
A solution to these issues has come from the field of artificial intelligence. Cognitive technologies is a branch of artificial intelligence that deals with the application of computers towards tasks traditionally performed by people. The aim of this process is to design a software solution that has comprehensive and detailed instructions, that enables it to do the same work that a person can. The benefits of this approach are that the same work can be done at a much faster pace, at a higher accuracy and at a lower cost.
Japan’s SoftBank says Q1 profit jumps 50.1% after inclusion of Vision Fund (CNBC), Rated: AAA
Japan’s SoftBank Group Corp on Monday reported a 50.1 percent rise in first-quarter operating profit, after the company included Vision Fund, the world’s largest private equity fund, as a new reportable segment and booked a valuation gain.
The internet and telecoms giant said profit for the quarter through June increased to 479.2 billion yen ($4.33 billion).
Fintech investments tripled in Singapore (The Star), Rated: AAA
GLOBAL investment in financial technology (fintech) firms more than doubled in the second quarter of the year, compared with the first quarter, to US$8.4bil (S$11.4bil) across 293 deals, KPMG said in a recent report.
Investment in fintech in Singapore more than tripled to US$61.5mil (S$83.3mil), although there were only four deals, compared with seven the quarter before.
Indonesian P2P Lending Platform UangTeman Secures Million During Series A Funding Round Led By K2 Venture Capital (Crowdfund Insider), Rated: A
On Monday, Indonesia-based peer-to-peer lending platform UangTeman announced it successfully secured $12 million during its Series A funding round, which was led by K2 Venture Capital, with participation from STI Financial Group and Draper Associates.
UAE Authorities Plan SMB Crowdfunding Framework (PYMNTS), Rated: AAA
United Arab Emirates (UAE) regulators are setting out to establish a framework to guide the small business (SMB) crowdfunding market, news reports on Sunday (Aug. 6) said.
Equity crowdfunding is expected to provide $93 billion to small- and medium-sized enterprises by 2020, reports added. In the UAE, SMBs stand to gain significantly from that trend, as these businesses make up an estimated 85 percent of all UAE companies. In Dubai, that number is even higher, at nearly 95 percent of all businesses, reports added.
Meanwhile, research from the Khalifa Fund for Enterprise Development found that as many as 70 percent of small business loan applications in the UAE are rejected by traditional banks, despite efforts from the national government and the Central Bank of the UAE to promote SMB financing.
Mexican fund invests in peer-to-peer lending network (Latin Lawyer), Rated: A
Greenberg Traurig SC in Mexico City has helped Mexican venture capital fund Ignia invest in peer-to-peer lending network Afluenta.
Why African fintech startups are becoming even more attractive for investors (Quartz), Rated: AAA
Take Flutterwave, a payments company which builds infrastructure to ease processing payments across Africa, it’s just raised $10 million in its Series A round. Significantly, the round was led by leading Silicon Valley venture capital funds Greycroft and Green Visor Capital, with participation from Y Combinator and Glynn Capital.
Fintech startups are the “most attractive,” for tech investors looking towards Africa, according to a recent report by Disrupt Africa. Nearly 20% of fintech startups tracked raised money in the last two years and in 2016, there was a 84% increase in the number of fintech startups secured investment compared to the previous year. In total, since 2015, fintech startups in Africa had raised $93 million in investment as of June 2017. Flutterwave’s raise takes that total past the $100 million mark.
In more advanced economies, fintech startups are focused on disrupting the traditional banking industry by changing how people access financial services. But in most parts of sub Saharan Africa, that’s not the case. In fact, fintech startups are typically creating products and services to plug many of the gaps which currently exist.
Indeed, as of 2014, only 34% of adults in sub Saharan Africa had bank accounts. Given the sheer size of the market which remains under-served, fintech startups are presented with a huge opportunity. And for investors, all that represents a major upside.