- Today’s main news: Affirm raises $200M at almost $2B valuation. Elastic Line of Credit surpasses $1B in funding. Klarna signs 500 online retailers in U.S. Zopa makes changes to Isa. Mintos adds first Russian loan originator. Flexiti offers online financing for e-tailers in Canada.
- Today’s main analysis: UK alternative finance is still healthy.
- Today’s thought-provoking articles: Cross River Bank partners with Mastercard on cardless ATM access. Investors take an interest in regulated industries. Asian asset managers disrupt banking with AI. Investor numbers at P2P lending platforms.
- Affirm almost hits $2B valuation with $200M fund raise. AT: “From last reports, this exceeded expectations. Congratulations to Max Levchin and his team for this achievement. This entrepreneur continues to surprise. Affirm is going to be one of the huge fintech success stories this decade.”
- Elevate’s Eastic Line of Credit surpasses $1B in funding. AT: “Congratulations. Another great achievement.”
- Klarna North America signs 500 online retailers in U.S. AT: “Congratulations to Klarna too. The competition in POS financing and e-commerce financing is heating up in practically every geographical region around the globe. Klarna is one of the major players, as is Affirm.”
- Why Cross River Bank, Mastercard are partnering on cardless ATM access. AT: “This is huge. Consumers without bank accounts can still access cash through ATMs. This can only better.”
- Investors are now looking at regulated industries. AT: “Some interesting insight here.”
- CAN Capital makes strategic new hires.
- JD.com partners with Plug and Play.
- Robo-advisors hit lull.
- Nuvo launches robo-advisor using chatbot.
- Commercial banks have eye on Silicon Valley.
- How to get a working capital loan.
- Consumers likely to spend $682B this holiday season.
- Broker-dealers claim SEC’s CAT database is unsecure.
- WalletHub comment on credit card charges and upcoming Fed rate hike.
- How to use your unused 2017 budget.
- Angie Herbers launches financial advisor education platform online.
- Zopa makes changes to Isa.
- UK alt finance market is healthy. AT: “It has seen steady growth since 2011.”
- UK positioned well for fintech growth despite Brexit.
- Small business drive 43% growth in alternative finance.
- Squirrel extends Crowdcube campaign.
- Downing hires from Funding Circle.
- LendingTree performs well through Edinburgh Worldwide trust.
- Growth of P2P lending platform investor numbers.
- Nanopay is for banks.
- Datarius to launch pre-sale for cryptobank.
- United States
- Max Levchin’s Affirm raises $ 200 million at a nearly $ 2 billion valuation (TechCrunch), Rated: AAA
- Elastic Line of Credit Surpasses $ 1 Billion in Total Funding (Morningstar), Rated: AAA
- Klarna North America Sees Surge In U.S. Merchant And Consumer Adoption Of Its ‘Smoooth’ Financing Solution (Business Insider), Rated: AAA
- Why Cross River Bank and Mastercard are collaborating on cardless ATM access (Tearsheet), Rated: AAA
- Once Shunned, Regulated Industries Now a Lure for Some Investors (Xconomy), Rated: AAA
- CAN Capital Makes Three Strategic Hires to Strengthen Sales and Technology Teams (PR Newswire), Rated: A
- China’s JD partners with accelerator program Plug and Play to reach US startups (TechCrunch), Rated: A
- Robo-advisors hit lull in everything but VC backing as reality fragments their identity (RIABiz), Rated: A
- Robo-adviser launches using chatbot technology (FT Adviser), Rated: A
- US Banks Look to Silicon Valley as Fintech Booms (PaymentsJournal), Rated: A
- Need a Shot of Capital for Business Growth? Here’s How to Find a Working Capital Loan This Year (AllBusiness.com), Rated: A
- Today In Data: Consumer Spend, Venture Capital And Bitcoin Reach Record Highs (PYMNTS), Rated: A
- Broker-Dealer Firms Raise Alarms That SEC’s CAT Database Isn’t Secure (Financial Advisor), Rated: A
- $1.46 Billion in Extra Credit Card Charges Due to Upcoming Fed Rate Hike (WalletHub Email), Rated: A
- Use your 2017 budget before you lose it (LendIt), Rated: B
- Angie Herbers Launches Online FA Education Platform (Financial Advisor), Rated: B
- United Kingdom
- Zopa announces changes to its Isa (Bridging&Commercial), Rated: AAA
- The UK alternative finance market is still healthy (Business Insider), Rated: AAA
- UK positioned to win in fintech, despite Brexit uncertainty (AltFi), Rated: AAA
- Small Businesses Drive 43 Percent Growth In UK Alternative Finance (PYMNTS), Rated: A
- Squirrel Extends Crowdcube Campaign After Achieving £400,000 Funding Target (Crowdfund Insider), Rated: A
- Downing enters property development space with Funding Circle hires (P2P Finance News), Rated: A
- Investors put trust in Scotland’s canniness (The Scotsman), Rated: B
- How asset managers like FinEx Asia are using AI to disrupt traditional bank lending (SCMP), Rated: AAA
- Thomson Reuters platform to help further develop Hong Kong’s fintech offerings (SCMP), Rated: A
- Growth of Investor Numbers on P2P Lending Platforms (P2P-Banking), Rated: AAA
- FinTech Startup Nanopay Is For Banks, Not Against Them (PYMNTS), Rated: A
- The First Social P2P Cryptobank Datarius to Launch a Pre-Sale on December 12 (Coinspeaker), Rated: B
- ANNOUNCING THE LAUNCH OF THE iFX EXPO ASIA 2018 (NewsBTC), Rated: B
- Mintos, an Online Marketplace for Loans, Adds First Russian Loan Originator to Platform. (Crowdfund Insider), Rated: AAA
- Kiakia — get real-time capital as a business owner or working class (Techpoint), Rated: AAA
- FLEXITI FINANCIAL ANNOUNCES ONLINE FINANCING TO GROW E-COMMERCE SALES FOR CANADIAN RETAILERS (Flexiti Financial), Rated: AAA
Max Levchin’s Affirm raises $ 200 million at a nearly $ 2 billion valuation (TechCrunch), Rated: AAA
Affirm’s valuation is estimated to be between $1.5 billion and $2 billion, as first reported by The Wall Street Journal. Investors are betting on Max Levchin, the PayPal co-founder who runs Affirm.
Elastic Line of Credit Surpasses $ 1 Billion in Total Funding (Morningstar), Rated: AAA
Elevate Credit, Inc., a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the Elastic product has originated more than $1 billion, and has served over 200,000 customers since 2013.
Elastic, a bank-issued line of credit offered by Republic Bank & Trust Company (“Republic Bank”), currently has more than $260 million in total principal outstandings across over 150,000 open accounts.
Klarna North America Sees Surge In U.S. Merchant And Consumer Adoption Of Its ‘Smoooth’ Financing Solution (Business Insider), Rated: AAA
Since Klarna introduced its financing solution in the U.S. in October 2016, 500 online retailers have already enrolled in the simple and ‘smoooth’ credit solution that is fully integrated into the online checkout process. Available in 10 countries via a single API, retailers include powerhouse global brands like Microsoft, TaylorMade, Overstock and Lenovo.
Why Cross River Bank and Mastercard are collaborating on cardless ATM access (Tearsheet), Rated: AAA
Cross River Bank, the bank of fintech startups, is working with Mastercard to give consumers cardless access to ATMs through an offering called Mastercard Cash Pick-Up. It allows businesses or individuals to send cash payments by logging in to the Cash Pick-Up platform via their bank’s website or mobile app and entering the necessary transaction and recipient. When they’ve done that, recipients receive a text message with the order number, PIN and a link that helps them locate a participating ATM nearby.
The offering highlights the role of mobile phones in banking’s new normal — mobile is more than just a channel, it’s the thing that’s guiding both financial incumbents and consumers alike through the shift from physical to digital banking, which still hasn’t been fully realized.
For now, Mastercard Cash Pick-Up is only available at enabled ATMs in the U.S., where the postal service plays far too big a role in payments, particularly low dollar disbursements, Isaacson said.
Once Shunned, Regulated Industries Now a Lure for Some Investors (Xconomy), Rated: AAA
Niehenke theorized that consumers whose trust in traditional banks had eroded might become a willing customer base for financial technology startups. But it was a bumpy time for tech companies entering the highly regulated financial sector.
Among those startups was Prosper, a peer-to-peer lending startup that had been temporarily shut down in 2008 by the Securities and Exchange Commission. The SEC maintained that the company was, in effect, selling securities rather than merely functioning as a marketplace connecting lenders and borrowers, TechCrunch reported.
CAN Capital Makes Three Strategic Hires to Strengthen Sales and Technology Teams (PR Newswire), Rated: A
CAN Capital, a small business specialty finance company, today announced three strategic hires as the company continues to invest in its technology and growth strategies. Mike Dodson, Vice President, Technology, Michael O’Brien, Director, Business Development, and Liping Deng, Director, Modeling & Analytics, have joined CAN Capital to focus on accelerating the company’s expansion.
China’s JD partners with accelerator program Plug and Play to reach US startups (TechCrunch), Rated: A
E-commerce giant JD.com, the closest rival to Alibaba in China, is broadening its presence in Silicon Valley after it announced a collaboration with accelerator firm Plug and Play to seek out and work with promising U.S. startups.
Robo-advisors hit lull in everything but VC backing as reality fragments their identity (RIABiz), Rated: A
Last summer, Sallie Krawcheck took a seat before 18 venture capitalists to raise capital for Ellevest Inc., her New York-based robo-advisor for women. See: Sallie Krawcheck astonishes industry observers by raising another $32.5 million for her robo-advisor — perhaps on strength of ‘unit economics’.
The role reversal reflects broader changes occurring across automated advice. BlackRock Inc. originally bought San Francisco-based FutureAdvisor as a retail product, then made it into a B-to-B offering. See: Why FutureAdvisor orphaned its B2C book of business, how post-Invesco Jemstep is doing and other learnings at CFA Society’s robo-panel in San Francisco
News out of Betterment has slowed to a crawl.
Yet, in an autumn largely devoid of news from robo-advisors, Acorns had a blistering announcement of a much deeper integration with one of its VC backers, PayPal, which has 218 million users. See: As Acorns grapples with monetizing 1.1 million micro-accounts, the laid-back LA robo-advisor brings Wealthfront’s former chief exec onto its board.
In the case of Irvine, Calif.-based Acorns, the nudging took the form of A/B-style testing of giving investors choices of how much to invest.
Robo-adviser launches using chatbot technology (FT Adviser), Rated: A
Nuvo has launched what it describes as an “artificially intelligent digital broker powered by chatbot technology”.
The launch of the robo-adviser, which uses AI to learn about customers to pick prices for mortgages and protection products tailored to them in less than a minute, comes just days after a US company claimed to be the first in the world offering financial advice with artificial intelligence.
US Banks Look to Silicon Valley as Fintech Booms (PaymentsJournal), Rated: A
More than eight out of ten (82%) US commercial banks have pledged to increase fintech investment over the next three years as the sector continues to expand, with 86% of senior managers planning an imminent rise in investment.
The in-depth research commissioned by global Fintech provider Fraedom, polled decision-makers in commercial banks including shareholders, middle managers and senior managers.
The study also found that more than seven out of ten (71%) respondents believe that the rise of technology within commercial banking threatens traditional one to one bank and customer relationships. This disruptive impact was felt greatest by shareholders (95%) as opposed to 67% of middle managers.
Need a Shot of Capital for Business Growth? Here’s How to Find a Working Capital Loan This Year (AllBusiness.com), Rated: A
Startup founders know to look for grants, crowdfunding, and angel investors, and established small business owners understand the ins and outs of bank loans. However, another form of financing for established small businesses—working capital loans—is a little less familiar to many owners, yet working capital loans can be the ideal financial tool to handle opportunities (or problems) that present themselves in the shorter term.
Here are some of the highlights:
- You don’t need to lay out a detailed plan of what you want to do with the money. Paperwork is minimal.
- If your credit score is at least 500, you’ll need to show an annual profit of $50,000; if your credit score is at least 600, that gets cut in half to $25,000. If you’ve been denied a bank loan, your chances may still be good for a working capital loan.
- You have the flexibility of choosing the type of working capital loan that best meets your needs: a term loan, cash advance, invoice factoring, revolving line of credit, or purchase order advance.
$682 billion | Amount that consumers are expected to spend on presents and other holiday preparations this holiday shoppingseason, with retailers going the extra mile to meet them where they are in a simpler and faster way. That means upping mobile and online shopping experiences, offering a buy online pick up in-store model and launching services like curbside pickup and better shipping options.
Broker-Dealer Firms Raise Alarms That SEC’s CAT Database Isn’t Secure (Financial Advisor), Rated: A
Broker-dealer firms aren’t confident the SEC’s consolidated audit trail (CAT) – a single, comprehensive database expected to store an unprecedented amount of sensitive trade data and personal identifiable information (PII) – is secure, according to testimony delivered before the U.S. House of Representatives.
National securities exchanges, Finra, alternative trading systems and broker-dealer firms have been required to submit information on trading activities – including customer information and prices – to the CAT daily since November 15 of this year. Large broker-dealers will be required to start submitting information to the CAT by November 15, 2018, while small broker-dealers are expected to do so by November 15, 2019.
The CAT is expected to take in 58 billion records daily – including orders, cancellations, modifications, executions and quotes for the equities and options markets – and maintain data for more than 100 million customer accounts and their unique customer information, according to parties involved in the CAT.
.46 Billion in Extra Credit Card Charges Due to Upcoming Fed Rate Hike (WalletHub Email), Rated: A
Forecasts call for a 99%+ chance of a Federal Reserve rate hike on Wednesday, which would make three for 2017. The move couldn’t come at a worse time for consumers, according to WalletHub’s December Rate Hike Report and Q3 2017 Credit Card Debt Study, released today.
This fifth rate hike in recent years coincides with record increases in credit card debt levels that put us on pace to cross $1 trillion in outstanding balances by the end of the year. And it contributes to an unwelcome holiday present for consumers: an extra $7.4 billion in credit card interest charges in 2018.
Use your 2017 budget before you lose it (LendIt), Rated: B
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Angie Herbers Launches Online FA Education Platform (Financial Advisor), Rated: B
Financial advisor consultancy founder Angie Herbers has launched an online training platform aimed at helping advisors grow their firms.
Beyond U offers advisor education via videos, online seminars and assessments, covering such topics as operations, management, sales and marketing, client services, compensation and more, according to a press release from the firm.
Zopa announces changes to its Isa (Bridging&Commercial), Rated: AAA
Zopa investors can now redirect their repayments into an Isa, allowing investors to gradually transfer their funds into an Isa without having to sell loans or pay fees throughout the process.
The UK alternative finance market is still healthy (Business Insider), Rated: AAA
The UK’s alternative finance market — including marketplace lending, crowdfunding, and invoice trading — grew 43% year-over-year (YoY) in 2016, from £3.2 billion ($4.3 billion) to £4.58 billion ($6.17 billion), according to a recently released study from the Cambridge Centre for Alternative Finance.
UK positioned to win in fintech, despite Brexit uncertainty (AltFi), Rated: AAA
Just this week the University of Cambridge trumpeted that the nation’s alternative finance industry has grown 43 percent in the last year. However, an October Bank of England report speculated Brexit would cause a loss of 75,000 finance jobs. A week before that, though, a study by Early Metrics argued that London would likely become the fintech capital of Europe “in the medium term.” And, from a sheer optics standpoint, the October convening of LendIt Europe – one of the world’s largest gathering of fintechs – once again attested to London’s central position in this dynamic and disruptive industry.
These differing signals underscore the uncertainty that has come with Brexit. But even with that, London is poised to remain a global leader in financial innovation – particularly when it comes to SME finance – based on, interestingly, its response to the financial crisis of nearly a decade ago.
In 2010, just four banks accounted for over 80 percent of SME lending in the United Kingdom, and all were in deep financial distress. Then-Chancellor George Osborne was being inundated every day with requests to fix the small business credit market. Getting capital to small businesses was critical, given how hard the credit-dependent SME sector was hit during the crisis.
Small Businesses Drive 43 Percent Growth In UK Alternative Finance (PYMNTS), Rated: A
Researchers said about 72 percent of market volume in 2016 can be traced back to demand for lending options among startups and small businesses, up from 50 percent the year before. That amounts to more than $4.4 billion driven by startups and SMBs in 2016.
Peer-to-peer businesses lending was 2016’s largest alternative finance market segment, which saw 36 percent year-over-year growth.
Squirrel Extends Crowdcube Campaign After Achieving £400,000 Funding Target (Crowdfund Insider), Rated: A
Squirrel, a personal finance app designed to help users have more control over their money, has successfully secured its initial £400,000 funding target from 450 investors through its equity crowdfunding campaign on Crowdcube.
Downing enters property development space with Funding Circle hires (P2P Finance News), Rated: A
DOWNING has hired two real estate experts from Funding Circle’s property division as it enters the property development space through its crowd bonds platform.
Investors on Downing’s crowd bonds platform are being offered returns of five per cent for one year or six per cent for two years by investing in Downing Development Finance (DDF) through the DDF Property Bond.
Investors put trust in Scotland’s canniness (The Scotsman), Rated: B
Edinburgh Worldwide is another Baillie Gifford managed trust, though rather obscured by the group’s better known trusts. Notable performers (not a Scottish name among them) were Alnylam Pharmaceuticals, a gene silencing company, LendingTree, an online loan marketplace, and IPG Photonics, a manufacturer of fibre-lasers used in metal processing.
How asset managers like FinEx Asia are using AI to disrupt traditional bank lending (SCMP), Rated: AAA
Banking disintermediation – essentially, taking out the middle man – has taken a new twist. While in recent years peer-to-peer (P2P) lending has become the poster-child for threatening banks’ lending business, a new type of hybrid disrupter is apparently starting to emerge: asset managers backed by financial technology.
One such firm attempting to cut banks out of the consumer-lending equation is FinEx Asia. The newly-licensed asset manager connects Asian investors with American consumer-credit assets, using artificial intelligence to select the loans based on risk appetite.
Founder and chief executive Maggie Ng said the company’s three funds now have US$100 million under management. They are backed by a portfolio of more than 10,000 US-based borrowers who have obtained loans from multiple online lending platforms, she said without specifying which ones.
Thomson Reuters, the news and market data giant, is partnering with a Hong Kong government-backed body to help the city’s banks and fintech firms develop new technology, cut costs and create new products.
Celebrating its 150th anniversary in Hong Kong next year, the new arrangement will see Thomson Reuters offer its platform to financial firms to distribute their products as well as use its technology, tools and data to create products, for free.
Growth of Investor Numbers on P2P Lending Platforms (P2P-Banking), Rated: AAA
Today I take a look at how investor numbers are developing at several platforms.
FinTech Startup Nanopay Is For Banks, Not Against Them (PYMNTS), Rated: A
Whether bank customers are consumers or businesses, chances are good that they do at least some of their banking online. This month, startup nanopay is announcing a partnership with Canadian nonprofit interbank network Interac to help businesses manage the complexity of working across borders.
The partnership creates access for any bank account holder in the country to send funds to or receive funds from any other bank account served by nanopay. So far, that’s a short list including just India. But, according to nanopay CEO Laurence Cooke, coverage will be supported in the U.S. and China as well in Q1 of 2018.
The First Social P2P Cryptobank Datarius to Launch a Pre-Sale on December 12 (Coinspeaker), Rated: B
The Datarius main characteristics are the use of blockchain, artificial intelligence, cryptocurrency operations and a special designer of the customer-adapted tariffs.
P2P lending is another characteristic of Datarius. It provides millions of people around the world with the possibility to receive and make loans using a Personal Account in the browser or through a smartphone application. It is a fast, reliable and easy way to get a loan wherever a person is. This is an opportunity to earn without involving brokers.
The pre-ITO round starts on December 12 on the official website of the Datarius Cryptobank and will last till December 31. 1 DTRC token = $ 1, but during the Pre-sale every buyer receives a 35% bonus. Soft Cap: $ 125,000.
ANNOUNCING THE LAUNCH OF THE iFX EXPO ASIA 2018 (NewsBTC), Rated: B
CONVERSION PROS, a marketing agency within the retail finance sector and founding company behind the iFX EXPO series of financial B2B events, has announced their next event, the iFX EXPO Asia 2018, which will take place in Hong Kong from the 23rd to the 25th January 2018 at the HKCEC (Hong Kong Convention & Exhibition Centre).
This event holds special significance, according to Gal Ron, CEO of CONVERSION PROS:
“This will be our 12th show to date and we expect to showcase this steady growth as we present an expanded floor plan with more exhibitor and sponsor areas tailored to the needs of our attendees. We are also placing special focus on Crypto as well as Peer to Peer lending as we are sure that this is part of the future of the online trading industry.”
Mintos, an Online Marketplace for Loans, Adds First Russian Loan Originator to Platform. (Crowdfund Insider), Rated: AAA
The Mintos marketplace for loans has added its first Russia based loan originator: EcoFinance. The online lender offers investments in unsecured personal loans issued in Russia under its CreditPlus brand. Mintos reports that EcoFinance loans on its marketplace will initially be listed in Euros with investors able to earn up to 11% annually.
Kiakia — get real-time capital as a business owner or working class (Techpoint), Rated: AAA
It’s no longer news that many individuals and SMEs in Nigeria have limited access to finance, especially from commercial banks.
Kiakia, an AI and machine learning powered alternative credit scoring, customer service, direct and a P2P lending platform has launched a virtual agent called “Mr K” to help working adults and SMEs access credit.
According to the Co-founder, Olajide Abiola (who also doubles as the Chief Data Scientist), millions of naira in loans have been successfully granted to and repaid by hundreds of borrowers across 22 States in Nigeria. This comes with a loss/default/NPL ratio of below 2.3%, which is consistently maintained over a 12-month period, all thanks to Kiakia’s algorithm.
FLEXITI FINANCIAL ANNOUNCES ONLINE FINANCING TO GROW E-COMMERCE SALES FOR CANADIAN RETAILERS (Flexiti Financial), Rated: AAA
Flexiti Financial, a provider of Point-Of-Sale (POS) financing and payment technology, announced today that its award-winning POS consumer lending platform is now available for online transactions. Retailers across Canada now have access to a powerful, online financing platform that easily integrates into any e-commerce engine, offering a low-cost solution. This is a critical new offering for Canadian retailers as it overcomes two key hurdles – speed of implementation and cost – as e-commerce continues to grow as a critical sales channel.
Flexiti Financial’s POS lending platform offers low rates for retailers who want to offer their customers flexible payment options, such as 0% interest financing. Customers do not require an existing credit card to apply.