- Today’s main news: Prodigy Finance raises $240M in debt and equity. RateSetter withdraws from UK Peer to Peer Finance Association. OCC motions to dismiss lawsuit. Funding Circle offers manual investment in Self Selected Loans. Lufax turns profit ahead of IPO. N26 has half a million customers.
- Today’s main analysis: Regulatory clarity RE: Madden v. Midland; Q2 earnings season highlights. The ‘finance franchise and fintech.
- Today’s thought-provoking articles: Has fintech industry growth begun? The ‘finance franchise and fintech. IVC to invest in TransferWise.
- OCC motions to dismiss Conference of State Bank Supervisors lawsuit. AT: “I couldn’t agree more. Pre-emptive lawsuits are a waste of time and resources.”
- Prodigy Finance raises $240M in equity and debt. AT: “Congratulations.”
- Regulatory clarity: Madden v. Midland; Q2 earnings season highlights. AT: “Another must-read analysis from PeerIQ.”
- Has fintech industry growth begun?
- ActiveProspect announces parternship with LendingTree.
- VCs wary of online lenders.
- Investors skeptical about online lending.
- Blockchains, innovations, and intermediaries.
- DebtX to accept bids on loans tied to First NBC collapse.
- Data-sharing debate grows contentious.
- Lend Academy MPL news roundup.
- Original Tech helps banks offer better loan applications with white label solution.
- RateSetter withdraws from UK P2P Finance Association. AT: “First, LendInvest. Now, RateSetter. Is this the beginning of the end of the P2PFA?”
- Funding Circle stops to offer manual investment in Self Selected Loans.
- The ‘finance franchise’ and fintech (Part 1). AT: “A very interesting read.”
- The ‘finance franchise and fintech (Part 2).
- Why security is king in P2P lending.
- LendingCrowd: Is the new 150 GBP cashback any good?
- Croydon is a high-risk mortgage hotspot.
- Two alt lenders land major business-boosting deals. AT: We reported on both of these last week — Funding Circle and MarketInvoice.”
- Chatbots, application-free lenders, and consumer hubs.
- 2 discounted investment trusts for income investors.
- KeyBank partners with Invesco’s robo-advisor.
- Starling taking financial services by storm.
- Lufax turns profit ahead of IPO.
- Lend Academy podcast interview with Greg Gibb of Lufax.
- Yunfeng leads $1.7B purchase of MassMutual Asia unit.
- Students failing to learn debt-control lessons.
- Online auto leasing platform wins RMB 100 Series A.
- Techies don’t always want to work in Hong Kong banking.
- N26 now has 500,000 customers in Europe. AT: “Congratulations.”
- United States
- OCC Motion to Dismiss Regarding Conference of State Bank Supervisors Lawsuit (Crowdfund Insider), Rated: AAA
- Student Online Lender Prodigy Finance Raises $ 240 Million in Equity and Debt (The New York Times), Rated: AAA
- Regulatory Clarity in Sight for Madden V. Midland; Q2 Earnings Season Highlights (PeerIQ), Rated: AAA
- Has Fintech Industry Growth Just Begun? (The Motley Fool), Rated: AAA
- ActiveProspect Announces Partnership with LendingTree to Independently Certify Web Leads (Benzinga), Rated: A
- Venture Capitalists Wary Of Online Lenders (PYMNTS), Rated: A
- Investors have become skeptical about online lending since early pioneers flamed out (CNBC), Rated: A
- BLOCKCHAINS, INNOVATIONS, AND INTERMEDIARIES (AllAboutAlpha), Rated: A
- Online loan marketplace DebtX to accept bids on nearly $ 1.1 billion in loans tied to First NBC collapse (The Advocate), Rated: A
- Data-sharing debate grows contentious as fintechs vent grievances (American Banker), Rated: A
- Marketplace Lending News Roundup – August 19 (Lend Academy), Rated: A
- Original Tech helps banks offer better loan applications (TechCrunch), Rated: A
- United Kingdom
- RateSetter Withdraws From the UK Peer to Peer Finance Association (Crowdfund Insider), Rated: AAA
- Funding Circle Stops to Offer Manual Investment in Self Selected Loans (P2P-Banking), Rated: AAA
- The ‘finance franchise’ and fintech (Part 1) (FT Alphaville), Rated: AAA
- The ‘finance franchise’ and fintech (Part 2) (FT Alhpaville), Rated: A
- Why security is king in P2P lending (FT Adviser), Rated: A
- LendingCrowd: is the new £150 cashback offer any good? (Love Money), Rated: A
- Croydon is high-risk mortgage hotspot (Mortgage Finance Gazette), Rated: A
- Two alt lenders land major business-boosting deals (Business Insider), Rated: A
- Chatbots, application-free lenders and consumer hubs – Moving the mortgage tech debate on (Mortgage Solutions), Rated: A
- 2 discounted investment trusts for income investors (AOL), Rated: A
- KeyBank partners with Invesco’s robo-adviser (Robo Advice News), Rated: B
- Digital start-up Starling taking financial services by storm (CNBC), Rated: B
- Ping An’s online lending platform Lufax turns profit ahead of IPO (Asian Review), Rated: AAA
- Greg Gibb of Lufax (Lend Academy), Rated: A
- Jack Ma-backed Yunfeng leads $ 1.7 billion purchase of MassMutual Asia unit (Reuters), Rated: A
- Students failing to learn debt-control lessons (China Daily), Rated: A
- Online Automobile Leasing Platform ‘Come Use a Car’ Wins RMB 100 Series A (Marbridge Consulting), Rated: A
- Techies don’t always want to work in Hong Kong banking. Here’s why they should (efinancial careers), Rated: B
- European Union
- N26 now has 500,000 customers for its bank of the future (TechCrunch), Rated: AAA
- IVC Poised to Invest in Fintech Unicorn Transferwise (Crowdfund Insider), Rated: AAA
- Fintech Funding Roundup: Instamojo, AnyPay, Aegon, Funding Circle (Paybefore), Rated: A
- Loans rebound but APRA caps could limit short-term growth (Courier Mail), Rated: AAA
- Fintech startup Capital Float raises $ 45 mn in Series C round led by Ribbit Capital (VC Circle), Rated: AAA
- Finding the right balance on crowdfunding (livemint), Rated: A
- Vietnam Startup Ecosystem (Vietnam-Briefing), Rated: A
- BSP readies rules on fintech platforms (Inquirer), Rated: A
- Middle East
- Funding squeeze hastens take-off of non-bank lending in Middle East (Reuters), Rated: AAA
- Sanlam buys into EasyEquities (IOL), Rated: AAA
OCC Motion to Dismiss Regarding Conference of State Bank Supervisors Lawsuit (Crowdfund Insider), Rated: AAA
In a motion to dismiss the lawsuit, the OCC states;
“The Complaint by the Conference of State Bank Supervisors represents a fatally premature attempt to invoke the jurisdiction of this Court to remedy a speculative harm that CSBS alleges may arise from future action by the Office of the Comptroller of the Currency – action that the OCC may never take. The CSBS Complaint challenges:
(1) provisions of an OCC regulation amended in 2003 to authorize special purpose charters that have, to date, never been used to charter a bank; and
(2) a series of public OCC statements as part of an ongoing policy initiative that CSBS alleges to be a final decision by the OCC to make charters available to “nonbank” financial technology (“fintech”) companies.
CSBS’s denomination of these public statements as a “Nonbank Charter Decision,” Compl. ¶ 52, is wrong in two fundamental respects: it ignores that the proposal contemplates a form of national bank charter and that no final decision has been reached.”
Read the full memorandum here.
Student Online Lender Prodigy Finance Raises $ 240 Million in Equity and Debt (The New York Times), Rated: AAA
UK-based online lender Prodigy Finance has raised $240 million in equity and debt funding, as it seeks to speed up its expansion in the United States.
The funding round comprises of $40 million in equity led by venture capital firm Index Ventures, with participation from Balderton Capital and AlphaCode, and $200 million in a debt facility led by a global investment bank, Prodigy Finance said on Monday.
Regulatory Clarity in Sight for Madden V. Midland; Q2 Earnings Season Highlights (PeerIQ), Rated: AAA
Congress may clear up the regulatory uncertainty introduced via Madden V. Midland before year end. Representatives Gregory Meeks, (D-NY) and Patrick McHenry (R-NC) introduced Protecting Consumer’s Access to Credit Act of 2016. The bill reaffirms the “valid when made” doctrine, which holds that interest rates originated by a national banks are legal even after a loan is assigned to a third-party. Political insiders assign favorable odds to the passage of the bill due to its bipartisan support.
Research has shown that the Madden V. Midland district court ruling has “significantly reduced credit availability for riskier borrowers”. PeerIQ has also observed a significant reduction in the willingness of warehouse lenders to finance loans subject to “Madden Midland” risk.
Bulge Bracket Banks
Compared to a year ago, all of the banks have increased their focus on lending business lines as revenue from trading continues to come under pressure.
Non-Bank Lenders & FinTech
- OneMain is leading the pack in YTD stock performance by a large margin. OMF has improved ROE and NIM while keeping charge-off rates to mid-single digits.
- Lending Club securitized their first ABS; CLUB 2017-NP1 was a near prime bond with $265 Mn outstanding which was a key driver of the quarter’s revenue. We dig into their earnings in greater depth on our last blog post.
- Except for Enova, all of the non-bank lenders increased their reserves as a % of total loans outstanding.
- We see a trend of higher net-charge off rates and increased reserves. We believe this reflects prudent risk management and responsiveness to changing borrower behavior (e.g., stacking, greater access to credit, late stage credit cycle dynamics, etc.)
Has Fintech Industry Growth Just Begun? (The Motley Fool), Rated: AAA
However, recent earnings releases from each of three public fintech stocks — Lending Club (NYSE:LC), OnDeck Capital (NYSE:ONDK), and Elevate Credit, Inc. (NYSE:ELVT) — show the tide may be turning. Here are three positives each company showed in the quarter.
While Lending Club began tightening standards well over a year ago, OnDeck did so more recently. While originations declined 19% sequentially, loss provisions also declined from 8.7% to 7.2%. That, combined with a $45 million cost-reduction plan, led to an adjusted net loss of only $1.5 million, a huge improvement over the $16 million loss in the prior-year quarter. If not for a $3.2 million severance charge, the company would have recorded positive GAAP income.
In Lending Club’s case, tightening credit attracted banks back to its platform in a big way. Banks funded 44% of loans in the quarter, compared with 13% in the third quarter of 2016.
While Lending Club took a year to repair controls and rebuild investor trust, last quarter’s loan originations were up 10%, both sequentially and year-over-year. Even better, revenue was up 35% year over year, as the company was able to earn more revenue per loan.
And while OnDeck deliberately slowed down in a big way this quarter, the company still grew revenues 25% year-over-year.
Finally, while Elevate’s revenue growth slowed to 19%, this is mainly due to the rapid growth of its Elastic product, which carries a lower interest rate than its other products; however, Elastic typically has a better-quality customer, with lower chargeoff rates. Originations grew 29% year over year, which is still very healthy.
ActiveProspect Announces Partnership with LendingTree to Independently Certify Web Leads (Benzinga), Rated: A
ActiveProspect, a SaaS provider of lead acquisition solutions, is partnering with LendingTree, the nation’s leading online loan marketplace, to independently certify its web leads using ActiveProspect’s TrustedForm product.
Venture Capitalists Wary Of Online Lenders (PYMNTS), Rated: A
According to a news report in CNBC, BlueVine CEO Eyal Lifshitz said that when meeting venture capitalists in recent years, the company has had to have a good story as to why it is different from other online lenders in order to get funding — something it didn’t have to deal with three years ago.
BlueVine, which is an online lender that is focused on the small business market, raised funding last year and has secured a total of $188 million in venture capital funding since 2013.
Investors have become skeptical about online lending since early pioneers flamed out (CNBC), Rated: A
Online lending startups looking to raise money now have to answer one important question that didn’t get asked much in the past: how do avoid the fate of early pioneers like Lending Club or On Deck, which have lost nearly 80 percent of their value since going public in 2014.
According to CB Insights, the number of funding rounds in the online lending space is on pace to hit a 5-year low in 2017. The dollar amount is also expected to drop to $2 billion in 2017, less than half of the $4.4 billion the sector saw in 2015.
Kabbage raised $250 million at a reportedly higher valuation than its last round, while Prosper is reported to be raising at a valuation that’s 70 percent below its previous round. Both companies last raised in 2015.
BLOCKCHAINS, INNOVATIONS, AND INTERMEDIARIES (AllAboutAlpha), Rated: A
One investment fund that intrigues Kaal is LendingRobot, which invests in lending marketplaces such as Prosper Funding Circle and Lending Home. What fascinates him is that its trading is automated, an algorithm based on investor risk preference. Due to blockchain technology, all transactions are a matter of public record, in compliance with best execution obligations. This facilitates the location and auditing of trades, internal investigation, and reporting to regulators.
Blockchain might very well diminish the role of banks in the asset management industry. As Kaal writes, banks charged $1.7 trillion in processing fees in 2014. But with blockchain “financial transactions can be executed instantaneously at near zero transaction costs, increasing the efficiency for businesses and individuals exponentially.”
Online loan marketplace DebtX to accept bids on nearly $ 1.1 billion in loans tied to First NBC collapse (The Advocate), Rated: A
DebtX, which operates an online marketplace for loans, plans to accept bids starting next month on nearly $1.1 billion in loans tied to First NBC Bank’s collapse.
On Sept. 12, DebtX plans to accept bids on a $117 million, single-relationship loan pool secured by energy-related assets in Louisiana. Bidding ends Sept. 29.
Data-sharing debate grows contentious as fintechs vent grievances (American Banker), Rated: A
A recently formed group representing 31 data aggregators and fintech companies, called Consumer Financial Data Rights, says banks still aren’t forking over as much data as they should be. The group is meeting with bank regulators to plead their case and trying to get consumers to petition regulators on their behalf, urging them to send a Tweet that says, “.@CFPB protect Americans’ ability to grant access to their financial information. #handsoffmyfinancialdata.”
The leaders of the CFDR accused banks of pushing bilateral agreements that restrict the types of data that will be shared and the use cases under which it can be shared. They also said large banks refuse to even talk with them about these issues. They say they would like to see the industry coalesce around a set of principles such as the European Union’s General Data Protection Rule.
Banks say they have no intention of restricting data sharing, that they want to let customers decide with whom their bank account data should be shared, and that they want to make sure that data is secure.
Marketplace Lending News Roundup – August 19 (Lend Academy), Rated: A
PayPal acquires Swift; Lending Club and OnDeck Q2 Earnings from PeerIQ – The weekly PeerIQ newsletter delves into the recent LendingClub and OnDeck earnings.
SoFi Is Being Sued by an Employee Claiming He Was Fired for Reporting Sexual Harassmentfrom Fortune – Bad news for SoFi. A former employee is suing the company and a class action lawsuit is coming.
Daylight Transparency: A Win/Win for Lenders and Investors from eOriginal – Transparency is so important in marketplace lending and eOriginal weighs in on recent comments from Ron Suber.
Why cybercriminals like AI as much as cyberdefenders do from American Banker – Penny Crosman takes an interesting look at the competition in AI between cybersecurity and criminals.
Five Key Things To Know About LendingClub Notes from LendingClub – This week LendingClub released a paper to help retail investors understand what is important.
Original Tech helps banks offer better loan applications (TechCrunch), Rated: A
Americans apply for more than 250 million new financial products each year, but the majority of those applications are completed on paper or over the phone. A startup called Original Tech wants to change that by providing white-label software to improve loan applications completed online.
It enables borrowers to apply for loans on desktop, tablet or mobile devices without needing to go through the manual process of filling out paper applications or fax documents to the financial institution.
For lenders, Original Tech takes care of the data collection, fraud prevention and compliance enforcement. But its system is designed to work within lenders’ existing workflows and allows them to apply all their own underwriting rules.
RateSetter Withdraws From the UK Peer to Peer Finance Association (Crowdfund Insider), Rated: AAA
n Friday, P2P lending platform RateSetter announced it has withdrawn from the Peer-to-Peer Finance Association (P2PFA). This news comes less than a month after the online lender was hit with a series of significant operational challenges as several large loans have struggled.
As previously reported, RateSetter hit an operational hurdle that culminated in approximately £80 million worth of loans being taken over by the platform. The online lender apparently lent £36 million to the Vehicle Trading Group Limited and the company has since fallen into administration (bankruptcy) after taking on too much debt. Additionally, £12 million was lent to an advertising company Adpod and £8.5 million of the loans are still outstanding and should not have cleared its own credit policy.
Funding Circle Stops to Offer Manual Investment in Self Selected Loans (P2P-Banking), Rated: AAA
UK p2p lending Marketplace Funding Circle announced today that from September 18th, there will be an important change to how investors can invest on the marketplace. From that date Funding Circle will withdraw the option to manually choose which businesses to lend to and which loan parts to sell. Instead Funding Circle says it will launch a significantly improved and upgraded version of existing Autobid and Autosell lending tools.
Investors will be able to choose one of two new lending options based on their personal preference. Both options will be available as a Funding Circle ISA, which Funding Circle intends to launch later this tax year.
- Balanced: you will automatically lend to the full range of creditworthy businesses (A+ to E), aiming to achieve an attractive, stable return. This will allow you to build a balanced portfolio similar to the makeup of small businesses in the UK today. The projected return is estimated to be 7.5% per year after fees and bad debt.
- Conservative: you will focus on lending to businesses that have been assessed as lower risk (initially A+/A) but with a lower projected return. The projected return is estimated to be 4.8% per year after fees and bad debt.
The ‘finance franchise’ and fintech (Part 1) (FT Alphaville), Rated: AAA
To the authors, there are three ways finance operates through the economy: 1) credit intermediation 2) credit-multiplication and 3) credit generation.
“Credit-multiplication” they note is the most familiar counter-example. This encapsulates the theory of fractional reserve banking, the idea that the banking system lends out more than it receives in investor deposits and holds only enough of the latter to handle anticipated daily withdrawals. The rest is continuously lent out.
LendingCrowd: is the new £150 cashback offer any good? (Love Money), Rated: A
Two alt lenders land major business-boosting deals (Business Insider), Rated: A
Two of the UK’s biggest names in small- and medium-sized business (SMB) alt lending, Funding Circle and MarketInvoice, this week announced partnerships with third parties to boost business on their platforms.
- Funding Circle has secured £160 million ($206 million) from Dutch insurer Aegon.
- MarketInvoice has partnered credit management firm Veritas Commercial Services. The invoice financing company will offer its customers Veritas’ credit control service, whereby Veritas will undertake all invoice collection activity their behalf.
Chatbots, application-free lenders and consumer hubs – Moving the mortgage tech debate on (Mortgage Solutions), Rated: A
Advancements in mortgage technology have been made but it seems they have yet to revolutionise the mortgage process – but every one knows they will.
The ideal is a digitally joined up housing, mortgage and legal process allowing the consumer to transact in a way which is convenient to them, and in a shorter time frame – but this has yet to be achieved.
Full online integration of APIs in the UK mortgage lending market is being worked on by a handful of stakeholders, although attendees said that behind closed doors a lender is close to rolling out its application-free mortgage process.
2 discounted investment trusts for income investors (AOL), Rated: A
Investing in peer-to-peer lending is one way to improve the return on your savings, but for investors who don’t want to go through the trouble of setting up their own account with a peer-to-peer lending platform and micro-managing each debt investment, P2P Global Investments (LSE: P2P) offers an alternative route for savers to gain access to the sector.
Shares in the investment trust have gained 12% since April, after the fund manager announced a review of its performance in light of falling returns.
At a current price of 861p a share, P2P Global Investments currently trades at a dividend yield of 5.6%.
KeyBank partners with Invesco’s robo-adviser (Robo Advice News), Rated: B
Invesco, the parent company of UK-based Invesco Perpetual, is continuing to expand into robo-advice and passive investing.
Digital start-up Starling taking financial services by storm (CNBC), Rated: B
Boden founded her British fintech start-up in 2014, shortly after she left one of Ireland’s biggest financial institutions, Allied Irish Bank, where she worked as the chief operating officer.
“I started thinking about a bank that really focused on doing a couple of things well, that was all about everyday transactional banking, the daily banking business, and what (would happen) if you used the information on each transaction, to give people insight into their overall lives.”
Boden believes that the challenger bank’s smaller scale operation gives it an edge over larger players, by significantly reducing the costs of running a bank.
Ping An’s online lending platform Lufax turns profit ahead of IPO (Asian Review), Rated: AAA
Shenzhen-based financial conglomerate Ping An Insurance Group said Friday that its online lending operator Lufax Holdings was no longer loss-making as it prepares for an initial public offering.
Established in 2011 with the help of Shanghai municipal government, Lufax, or Shanghai Lujiazui International Financial Asset Exchange, is currently the largest peer-to-peer lending platform in mainland China in terms of outstanding loans, totaling 1.5 trillion yuan ($225 billion) as of Friday, according to industry consultant WDZJ.com.
Of Ping An’s nonstandard debts, 56.9% were exposed to infrastructure investments, followed by 27.7% to non-bank financials and 12.3% to real estate.
Compared to last year when Ping An netted 9.5 billion yuan from a restructuring, net profit of its internet finance business fell 94.7% to 420 million yuan in the first half. That represented 0.9% of the wider group’s net profit, which totaled 43.43 billion yuan in the first half, up 6.5% from a year ago.
Greg Gibb of Lufax (Lend Academy), Rated: A
Lufax has gone from a simple peer to peer lending platform that launched in 2012 to a diversified wealth management platform with over $60 billion in assets under management. They are a true success story and how Greg and his team have done this is simply fascinating.
- How Greg, an American, ended up in China becoming the CEO of a fintech company.
- What was the opportunity that Greg and the Ping An chairman saw that led to the founding of Lufax.
- What they really wanted to do and why they ended up deciding to start with a P2P lending platform.
Jack Ma-backed Yunfeng leads $ 1.7 billion purchase of MassMutual Asia unit (Reuters), Rated: A
Yunfeng Financial Group (0376.HK) said it would be the main investor in a $1.7 billion acquisition of insurer MassMutual International’s Hong Kong unit – a deal that sent shares in the Jack Ma-backed finance firm soaring as much as 30 percent.
Yunfeng will own 60 percent of MassMutual Asia. The rest will be owned by other investors such as Ant Financial Services, an affiliate of billionaire Jack Ma’s Alibaba (BABA.N), as well as Singapore sovereign wealth fund GIC Private Ltd and Chinese Internet and telecoms firm SINA Corp (SINA.O).
Students failing to learn debt-control lessons (China Daily), Rated: A
In April, a sophomore in Xiamen, Fujian province, killed herself because she was unable to repay 570,000 yuan ($85,448) she had obtained via a peer-to-peer lender, according to reports in Fujian Daily.
Earlier this year, the Inner Mongolia Morning Post reported that about 900 university students in the autonomous region were cheated out of more than 9 million yuan after they signed up for a “promotion” that purported to offer iPhones for 800 yuan, rather than the usual price of about 2,000 yuan. In fact, they had unwittingly applied for loans from a peer-to-peer platform and were quickly pressured to repay the money at high rates of interest.
Although there are no nationwide statistics related to criminal incidents linked to peer-to-peer lending, a number of provinces and regions have released data that illustrate the gravity of the situation.
In May, police in Jilin province said they had handled 193 cases related to the issue, busted three gangs and detained 31 people suspected of using the system to defraud would-be recipients.
Online Automobile Leasing Platform ‘Come Use a Car’ Wins RMB 100 Series A (Marbridge Consulting), Rated: A
Tianjin-based Gongming Zhongtai International Assets Leasing, operator of online and mobile automobile leasing platform Laiyongche (literally “Come Use a Car”), has won RMB 100 mln in Series A funding, according to an announcement from CEO Lu Yuquan at a press conference in Beijing. The round was led by P2P lending platform Meili Jinrong (Meili Finance) and mobile gaming company Jinke Culture Industry (300459.SZ), with participation from Xingyi Capital and Xu Xuepeng, founder of Yuehui Capital.
Techies don’t always want to work in Hong Kong banking. Here’s why they should (efinancial careers), Rated: B
As blockchain, AI and other emerging technologies become ever more prevalent in Hong Kong finance, demand for specialist tech candidates is heating up and firms have to offer more – both financially and in terms of career development – to prospective employees.
In short, we need to build a larger financial technology talent base in Hong Kong – not just developers and engineers, but also fintech entrepreneurs and creative thinkers.
N26 now has 500,000 customers for its bank of the future (TechCrunch), Rated: AAA
More importantly, growth seems to be accelerating as the startup announced that it was adding a thousand customers every day back in March. Now, around 1,500 customers sign up every day.
IVC Poised to Invest in Fintech Unicorn Transferwise (Crowdfund Insider), Rated: AAA
IVC, one of the original venture capital firms on Sand Hill Road in Silicon Valley, is poised to take a substantial stake in Fintech unicorn Transferwise. This is a according to a report by Sky News that indicated IVP would invest approximately $60 million in the young firm that is an express route to disrupt the banking industry.
Fintech Funding Roundup: Instamojo, AnyPay, Aegon, Funding Circle (Paybefore), Rated: A
Options, a provider of cloud-enabled managed services to capital markets, has received nearly $100 million in investment from New York-based private equity firm Bregal Sagemount. The money will be used for growth and platform innovations.
Instamojo, an India-based digital payments platform for SMEs, has raised undisclosed pre-Series B funding from Japanese payments company AnyPay.
Dutch financial services provider Aegon is partnering with online lending platform Funding Circle.
Loans rebound but APRA caps could limit short-term growth (Courier Mail), Rated: AAA
BUNDABERG-based Auswide has criticised how lending regulatory caps are impacting small banks, saying they will partially suppress its own loan growth in the next six months.
The comments come as the 23-branch lender reports a rise in profits and dividends.
Auswide accelerated lending in the second half, and its loan book rose 4.01 per cent for the year to $2.773 billion. That remains off industry averages of 5.4 per cent, according to Reserve Bank of Australia statistics.
Auswide profits rose from $11.7 million to $15.1 million – expenses from merger activity in fiscal 2016 were not repeated. On its preferred underlying result, earnings rose from $14 million to $15.6 million.
Fintech startup Capital Float raises $ 45 mn in Series C round led by Ribbit Capital (VC Circle), Rated: AAA
Bengaluru-based digital lending platform Capital Float has raised $45 million (Rs 293 crore) in its Series C round of funding led by Silicon Valley-based fintech-focussed venture capital firm Ribbit Capital.
Existing investors SAIF Partners, Sequoia India and Creation Investments also participated in the round, Capital Float said in a statement.
Finding the right balance on crowdfunding (livemint), Rated: A
There are currently two crowdfunding models that are of interest to regulators. The equity-based model allows for a stake in the venture via private placement. And peer-to-peer (P2P) lending, which falls under the Reserve Bank of India’s (RBI’s) purview, connects lenders and borrowers who may mutually agree upon either a fixed interest rate or a variable one. Both operate via third-party digital platforms.
Other benefits are less obvious. In a 2016 paper for the US government’s small business administration, Research On The Current State Of Crowdfunding: The Effect Of Crowdfunding Performance And Outside Capital, Venkat Kuppuswammy and Kathy Roth found that crowdfunding success served as proof of concept and made it easier to subsequently access capital from more traditional sources such as banks, venture capitalists and angel investors.
The immaturity of digital crowdfunding globally and the start-up sector in India mean that these come with plenty of caveats, however.
Vietnam Startup Ecosystem (Vietnam-Briefing), Rated: A
Fintech has emerged as the most attractive sector in which to invest with remarkable growth figures in 2016, having received USD$ 129 million in investments. M&A activity has also been intense lately, which contributed to the overall progress of the ecosystem. Payment still accounts for the largest pool of fintech startups. Foreign and local startups could easily break into new sectors, namely InsurTech (insurance), Wealthtech (wealth), and Regtech (regulation). Vietnam has even set up a steering committee on fintech led by the Central Bank with the purpose of supporting the State Bank of Vietnam Governor in his policies.
BSP readies rules on fintech platforms (Inquirer), Rated: A
The Bangko Sentral ng Pilipinas (BSP) is studying new digital solutions as financial technology platforms proliferate, opening up new markets and access for broader segments of society while also increasing the risk of harm to unwitting consumers and investors.
Espenilla said the BSP was considering two solutions: An API system, which streamlines the reporting requirements between the BSP and regulated entities such as banks, and an automated complaint handling portal, which establishes a direct link with customers.
Funding squeeze hastens take-off of non-bank lending in Middle East (Reuters), Rated: AAA
Middle East investment companies are ramping up their lending to businesses, providing a lifeline for small and medium-sized firms struggling to secure finance from banks that tightened credit after a suffering rise in bad loans.
Industry participants estimate non-bank lenders in the region could provide around $1 billion over the next three to five years, including secured loans, mezzanine debt, preferred shares and convertible loans and bonds.
Sanlam buys into EasyEquities (IOL), Rated: AAA
Sanlam Investment Holdings has acquired shares in financial technology business EasyEquities.