- Today’s main news: OnDeck closes $100M credit facility. LendingClub expected to announce quarterly sales of $152.18M. Affirm expands to cover smaller purchases. Funding Circle lends 80M GBP through IFISA. China Construction Bank opens robot-only branch.
- Today’s main analysis: Originator league table. UK P2P lending nears 9B GBP.
- Today’s thought-provoking articles: Top fintech investors by stage. Interview with Renaud Laplanche. How Starling Bank gets cues from Amazon. Key trends in digital banking. Interview with Funding Societies co-founder Kelvin Teo.
- OnDeck closes $100M credit facility. “The new facility provides the longest revolving funding period of any of OnDeck’s funding sources, and the lowest interest margin of any of OnDeck’s variable-rate funding facilities to date.”
- LendingClub expected to announce quarterly sales of $152.18 million. AT: “A positive growth rate would be a good sign for the whole industry.”
- Affirm expands to cover smaller purchases. AT: “Good move.”
- SoFi leads in originating new securitization deals with $2.6 billion volume. AT: “In fact, they outclass all other deal makers by a long shot, Prosper being the closest $0.6 billion this year.”
- Interview with Renaud Laplanche. AT: “Laplanche talks about the different challenges associated with his two startups, and more.”
- 21 straight months of securitizations.
- Top fintech investors by stage.
- MogulREIT I closes senior debt investment.
- Ascentium Capital surpasses $4 billion in originations. AT: “Congratulations.”
- Harbor backed by Peter Thiel fund.
- LendingClub vs. Prosper.
- Alternatives to Capital One personal loans.
- Why digital banks welcome Community Reinvestment Act revamp.
- Fed takes new approach to industrial loan charters.
- Education Loan Finance receives AAA ratings on securitization deal.
- Multiple-offer scenarios.
- Wunder Capital lands beg investment.
- Funding Circle lends 80 million GBP through IFISA.
- P2P lending nears 9 billion GBP.
- How Starling Bank takes cues from Amazon. AT: “Amazon should be on the watch list of any startup founder.”
- LendInvest asks government to improve finance access for property SMEs.
- Decentralized Ventures to spearhead Malta’s blockchain services.
- JustUs launches IFISA.
- Top bank charged dead clients for financial advice.
- P2P lenders win at banks’ expense.
- ME increases home loan interest rates.
- United States
- OnDeck Announces New $100 Million Revolving Credit Facility (PR Newswire) Rated: AAA
- Lending Club (LC) Expected to Announce Quarterly Sales of $152.18 Million (The Lincolnian Online) Rated: AAA
- Affirm Expands Offering to Cover Smaller Purchases with Simple, Transparent Payments (The Virginian Pilot) Rated: AAA
- PeerIQ Releases Their Marketplace Lending Securitization Tracker For Q1 2018 (Lend Academy) Rated: AAA
- Online Lending in Risk On Mode: Unprecedented 21 Months of Non Stop Securitization Issuance (Crowdfubd Insider) Rated: A
- Top Seed-Stage FinTech Investors (Crunchbase News) Rated: AAA
- RealtyMogul’s MogulREIT I Closes Senior Debt Investment in San Francisco (The Virginian Pilot) Rated: A
- Ascentium Capital Surpasses $ 4 Billion in Originations (deBanked) Rated: A
- Q&A: Renaud Laplanche on Starting Upgrade and Offering New Credit Products to Consumers (LendEDU) Rated: AAA
- Blockchain Startup Backed By Billionaire Bitcoin Bull Peter Thiel Gets $ 28 Million Investment (BTC Manager) Rated: A
- LendingClub vs. Prosper Review: Here’s What You Need to Know (Student Loan Hero) Rated: A
- Need an Alternative to a Capital One Personal Loan? Here’s Where to Look (Student Loan Hero) Rated: B
- Why digital banks are welcoming CRA revamp (American Banker) Rated: A
- Quarles suggests new Fed approach to ILCs (American Banker) Rated: B
- Education Loan Finance Receives AAA Ratings on Inaugural Securitization Deal (Business Wire) Rated: A
- The process of elimination in multiple-offer scenarios (The Ledger) Rated: A
- Boulder solar power finance firm lands big bucks (like $ 112M of them) (Denver Business Journal) Rated: A
- United Kingdom
- £80m lent through Funding Circle Isa (Bridging & Commercial) Rated: AAA
- P2PFA: UK Peer to Peer Lending Industry Nears £9 Billion in Total Lending (Crowdfund Insider) Rated: AAA
- How Starling Bank is taking cues from Amazon (Tearsheet) Rated: AAA
- LendInvest Calls Upon UK Government to Improve Finance Access for Property SMEs (Crowdfund Insider) Rated: A
- Malta-Based Decentralized Ventures to Spearhead Crypto Island’s Blockchain Services Provision (Blockchain News) Rated: B
- JustUs launches IFIsa to support ethical housing scheme (Bridging & Commercial) Rated: B
- China Construction Bank opens robot-run branch (Fintech Futures) Rated: AAA
- CreditEase’s Hou outlines allocation outlook (Asian Investor) Rated: A
- European Union
- iZettle squares up to Square with e-commerce platform launch (Fintech Futures) Rated: A
- Digital banking’s key trends: Demand, competition, mobile on the rise (American Banker) Rated: AAA
- More Than Half Of Cards Issued Globally Were EMV-Enabled (PYMNTS) Rated: A
- Australia’s top bank says it charged dead clients for advice (CNN) Rated: AAA
- One winner from the banking royal commission (The Australian) Rated: B
- ME hikes home loan interest rates: does this mark the end of super low rates? (MOZO) Rated: A
- High investor FOMO about P2P lending in SE Asia: Funding Societies co-founder Kelvin Teo (Deal Street Asia) Rated: AAA
- Alternative investment opportunities in Việt Nam (Viet Nam News) Rated: A
- Latin America
- Creditas investment a Brazilian first for Santander InnoVentures (Bankless Times) Rated: AAA
OnDeck Announces New 0 Million Revolving Credit Facility (PR Newswire) Rated: AAA
OnDeck announced today the closing of a $100 million asset-backed revolving credit facility with Pioneers Gate LLC, a lending vehicle of a leading life insurance company managed by 20 Gates Management. The new facility provides the longest revolving funding period of any of OnDeck’s funding sources, and the lowest interest margin of any of OnDeck’s variable-rate funding facilities to date.
Lending Club (LC) Expected to Announce Quarterly Sales of 2.18 Million (The Lincolnian Online) Rated: AAA
Wall Street brokerages expect that Lending Club (NYSE:LC) will announce sales of $152.18 million for the current fiscal quarter, according to Zacks. Three analysts have provided estimates for Lending Club’s earnings. The lowest sales estimate is $150.00 million and the highest is $154.53 million. Lending Club posted sales of $124.48 million during the same quarter last year, which suggests a positive year-over-year growth rate of 22.3%. The firm is scheduled to announce its next earnings results after the market closes on Tuesday, May 8th.
On average, analysts expect that Lending Club will report full-year sales of $688.45 million for the current financial year, with estimates ranging from $680.00 million to $693.30 million. For the next fiscal year, analysts expect that the company will post sales of $803.61 million per share, with estimates ranging from $773.00 million to $858.31 million. Zacks Investment Research’s sales averages are an average based on a survey of sell-side research analysts that cover Lending Club.
Affirm Expands Offering to Cover Smaller Purchases with Simple, Transparent Payments (The Virginian Pilot) Rated: AAA
Affirm, Inc., the company founded by entrepreneur Max Levchin to provide fair and honest financial products, today announced Affirm will partner with brands and retailers to offer shoppers a simple, no-interest payment option on purchases of any size via three easy, monthly payments. Now, Affirm’s financial products are available for purchases of any size, marking an expansion for the company. Affirm will continue to offer shoppers the option to buy now and make simple, transparent payments over time for purchases up to thousands of dollars, with terms ranging from 3 to 36 months.
The expansion of Affirm’s capabilities will be especially valuable to fashion and apparel brands and retailers that want to offer a quick and convenient payment method that better aligns with shoppers’ cash flows and are more transparent than traditional credit.
PeerIQ Releases Their Marketplace Lending Securitization Tracker For Q1 2018 (Lend Academy) Rated: AAA
We see another robust quarter for marketplace lending securitizations with $4.3 billion in new deals.
SoFi lead the way again with $2.6 billion or around 60% of the market with two huge student loan deals and a consumer loan deal.
Online Lending in Risk On Mode: Unprecedented 21 Months of Non Stop Securitization Issuance (Crowdfubd Insider) Rated: A
The most recent report stated that PeerIQ has observed an “unprecedented 21 months of non-stop issuance. Markets remain in a “risk-on” mode and MPL investor appetite continues to grow. This is a very bullish statement for online lenders coming at a time when interest rates are rising as is competition in the sector is increasing.
Top Seed-Stage FinTech Investors (Crunchbase News) Rated: AAA
Crunchbase News recently took a deep dive into the U.S. FinTech industry’s Q1 2018 venture activity. We found that deal volume in 2017 amounted to more than $7 billion in venture funding for seed, early, and late-stage startups. As 2018 came to a head, the number of deals in the space declined slightly, while venture capital dollars increased by 37 percent quarter over quarter.
The firm has made more than 690 investments in technology companies, with lead investments in 24 startups. Plug and Play also made an early bet on PayPal, now a public company with a market cap over $90 billion. California-based Hippo Insurance picked up an investment by Plug and Play in its $25 million Series B in January 2018. Hippo Insurance was coincidentally also mentioned in our Crunchbase News analysis of startups that have weird names.
Defi Solutions, a SaaS platform for lenders, was the latest growth-stage FinTech company to score an investment by the firm. Bain Capital Ventures was the sole investor in the startup’s $55 million Series C in January 2018.
RealtyMogul’s MogulREIT I Closes Senior Debt Investment in San Francisco (The Virginian Pilot) Rated: A
MogulREIT I today announced that it has completed an investment in a $6.69 million mixed use building in San Francisco, California, its 15 th acquisition since inception. MogulREIT I was designed to offer investors potential cash flow through managing a diversified portfolio of commercial real estate investments, including, but not limited to medical office buildings, multifamily apartment complexes, office spaces and retail shopping centers.
Ascentium Capital Surpasses $ 4 Billion in Originations (deBanked) Rated: A
Texas-based lender Ascentium Capital announced last week that it had surpassed $4 billion in origination volume since the company was founded in 2011.
The other business channel is a direct channel where Ascentium makes direct loans to small and medium sized businesses of up to $250,000. Depping told deBanked that the company’s direct channel makes up about 30 to 40 percent of its business.
Q&A: Renaud Laplanche on Starting Upgrade and Offering New Credit Products to Consumers (LendEDU) Rated: AAA
Q: It looks like you co-founded Upgrade with a total of 6 co-founders. How has starting Upgrade been unique from a team building perspective?
A: Over the last year we’ve on-boarded more than 250 team members across our three offices – San Francisco, California headquarters, Phoenix, Arizona operations center and Montreal, Quebec, Canada development center. It has been an incredible year, especially looking back at the team we’ve formed.
Q: How did the challenges of starting LendingClub compare to the unique challenges of starting Upgrade?
A: The challenges are quite different because the launch of each company stands about decade apart, so the landscape is very different.
Q: Beyond credit monitoring, how is Upgrade helping to educate consumers about their finances?
A: We believe helping people get smarter about credit can enable them to access more affordable credit in the future, and that’s why we launched Credit Health. Credit Health comprises of a range of tools that we think can help people understand their credit profile and what they can do to improve it. In addition to credit monitoring and alerts we offer Credit Health Insights – a library of educational articles and videos. Credit Health also features a credit simulator that gives you customized advice and tips tailored to your unique credit history. We haven’t seen other credit monitoring platforms offer this the same way we do.
Blockchain Startup Backed By Billionaire Bitcoin Bull Peter Thiel Gets $ 28 Million Investment (BTC Manager) Rated: A
Harbor, a blockchain startup backed by billionaire bitcoin bull Peter Thiel, has received an additional $28 million investment that it hopes will make blockchain real-estate investing a reality.
This latest cash infusion was led by Thiel’s Founders Fund, venture-capital fund Andreessen Horowitz, and cryptocurrency investment firms Pantera Capital and Craft Ventures. The San Francisco-based Harbor secured $10 million in Series A financing in February 2018, raising its total investments to $40 million.
LendingClub vs. Prosper Review: Here’s What You Need to Know (Student Loan Hero) Rated: A
In recent years, there’s been rising interest in peer-to-peer (P2P) lending. A report from Research and Markets estimates that P2P lending could grow by 53.06% between 2016 and 2020, while Transparency Market Research projects that the global P2P market will be worth $897.85 billion by 2024.
Need an Alternative to a Capital One Personal Loan? Here’s Where to Look (Student Loan Hero) Rated: B
For example, if you’re looking for a small loan — say, around $500 — you should skip online lenders. Most don’t provide loans for less than $1,000 or $2,000. Also remember that your credit score is vital to the approval process, so if you can’t get one on your own, consider getting a cosigner.
Why digital banks are welcoming CRA revamp (American Banker) Rated: A
To get a sense of why Ally Bank wants the Community Reinvestment Act rewritten, look at its situation in Utah.
Since it has no retail branches, the $137 billion-asset Ally is assessed for CRA compliance for its lending in Salt Lake City, where its bank is headquartered. But Ally gets no CRA credit for lending in Detroit, where its holding company is based and where nearly four in 10 households are living in poverty.
Quarles suggests new Fed approach to ILCs (American Banker) Rated: B
The Federal Reserve Board’s chief regulator suggested he was open to companies receiving industrial loan company charters, a sign that the central bank’s view on ILCs may be evolving.
“I don’t think of [ILCs] as a particularly special, excessively problematic case,” said Federal Reserve Vice Chairman for Supervision Randal Quarles at an International Monetary Fund forum Wednesday.
Education Loan Finance Receives AAA Ratings on Inaugural Securitization Deal (Business Wire) Rated: A
Education Loan Finance (ELFI), a division of SouthEast Bank, focusing on student loan debt refinancing and consolidation, announces the close of its inaugural securitization of refinanced student loans. Education Loan Finance is the first student loan refinancing lender to receive the AAA rating from both Standard & Poor’s and DBRS on its senior notes in its first securitization transaction comprised of this type of education loan product.
The $200 million transaction was comprised of $24.784 million of variable rate Class A-1 Notes, $158.65 million of fixed rate Class A-2 Notes, and $16.566 million of Class B Notes. The Class B Notes are rated A by DBRS. Citi and Credit Suisse served as joint lead managers on the transaction.
The process of elimination in multiple-offer scenarios (The Ledger) Rated: A
If a house is listed for $400,000 and someone presents a cash offer for $380,000, that will not be favored over an offer for $400,000 from a person getting an 80 percent loan.
For example, a 75 percent loan from an online lender with no ties to the Nashville area could be trumped by a 100 percent loan from a local, well-known lender that provides physician loans.
Boulder solar power finance firm lands big bucks (like $ 112M of them) (Denver Business Journal) Rated: A
Boulder-based Wunder Capital, which lends money for commercial-scale solar power projects, said Wednesday it’s raised $112 million in equity and debt financing to grow the company.
The Series B financing round was led by New York City investment firm Cyrus Capital Partners, which manages $4 billion in investments. Existing investors also were involved in the round, including Techstars Ventures which led the company’s Series A round of funding in March 2016.
£80m lent through Funding Circle Isa (Bridging & Commercial) Rated: AAA
Funding Circle has announced that approximately £80m has already been lent to thousands of businesses through its Innovative Finance Isa (IFIsa).
The Isa offers an estimated tax-free projected return of 7.2% and is a flexi Isa which allows investors to take money out of their account and put it back later in the tax year without losing their tax-free entitlement.
There is an initial minimum investment of £1,000 and investors will be able to transfer exiting Isas into the Funding Circle Isa later this year.
P2PFA: UK Peer to Peer Lending Industry Nears £9 Billion in Total Lending (Crowdfund Insider) Rated: AAA
The UK Peer to Peer Finance Association (P2PFA) has released Q1 data for its member platforms. According to the industry association, P2P lending is nearing £9 billion in loan originations having provided finance for approximately 50,000 business and 221,000 individuals. Total investors stand at around 150,000.
How Starling Bank is taking cues from Amazon (Tearsheet) Rated: AAA
And digital-only banks with a license, like Monzo, Starling, Tandem and OakNorth, are growing market share.
What are the biggest problems with banking today?
Banking as it is today sucks — it’s hard to easily manage account openings, and [until recently] to send payments to friends. That’s why Venmo has been so successful, but this should be a thing banks do. You shouldn’t have to read an FAQ to use the mobile app or set up a bill pay.
LendInvest Calls Upon UK Government to Improve Finance Access for Property SMEs (Crowdfund Insider) Rated: A
LendInvest reported that in a new report entitled Putting Finance First: the alternative route to funding Britain’s SME housebuilders, the online lender recognizes that while the government is trying to help improve the outlook for property SMEs, but then argues that not enough is being done to put rhetoric into action. The report focuses on three proposed initiatives that combine existing government-backed funding mechanisms with the experience and expertise of alternative lenders, like LendInvest, to speed up and increase the supply of finance to property SME businesses:
- Homes England: Should deploy its £2.5 billion Home Building Fund through funding lines agreed with alternative lenders.
- Local authorities: Should co-invest with alternative lenders in local developments, utilizing the Public Works Loan Board mechanism to provide discounted capital for SMEs.
- The British Business Bank: Should appoint more alternative lenders to use the ENABLE Guarantee programme to underwrite property investment and development loans.
Malta-Based Decentralized Ventures to Spearhead Crypto Island’s Blockchain Services Provision (Blockchain News) Rated: B
Blockchain services provider Decentralized Ventures on Tuesday announced its official launch, with the objective of bolstering Malta’s crypto communities.
A partnership between initial coin offering (ICO) specialist TokenKey and token research and Blockchain consultancy Strategic Coin Inc., Decentralised Ventures is designed to support the Maltese government’s plans to create the world’s first fully regulated market for ICOs, DLT and virtual currencies, a statement said.
JustUs launches IFIsa to support ethical housing scheme (Bridging & Commercial) Rated: B
The IFIsa aims to raise £367,500 and will offer a return of up to 6.5% to investors.
JustUs will provide a bridging loan to Mersten for up to 50% of the property’s value to fund the renovation.
China Construction Bank opens robot-run branch (Fintech Futures) Rated: AAA
China Construction Bank (CCB) has opened a branch in Shanghai run solely on the power of pure technology.
According to the South China Morning Post (SCMP), the branch has no human staff and instead uses facial recognition, artificial intelligence (AI) and virtual reality (VR) to provide the bank services.
SCMP says it is hyped as a first for the Chinese banking industry, and the Beijing-based bank says it has installed 1,600 smart machines at its 360 branches in the city to ramp up its appeal to tech-savvy customers and trim staff costs.
CreditEase’s Hou outlines allocation outlook (Asian Investor) Rated: A
Beijing-based CreditEase, a peer-to-peer P2P lending platform and wealth management platform, has been busy building its roster of mutual fund, trust and insurance products.
iZettle squares up to Square with e-commerce platform launch (Fintech Futures) Rated: A
Called iZettle E-commerce, it lets small business owners set up and customise a new webshop or start selling across channels online, including social media, blogs and existing websites.
Digital banking’s key trends: Demand, competition, mobile on the rise (American Banker) Rated: AAA
Two global studies — a study of 150,000 consumers polled by Gallup for the World Bank for its Global Findex Database, and a survey of 5,200 consumers by the tech giant Oracle — found complementary trends in the use and adoption of digital banking.
For example, 60% of customers globally want to open a bank account online, according to Oracle’s survey.
Many are already there: Sixty-seven percent of customers globally are on digital banking platforms now, according to Oracle; the World Bank reports that 515 million customers worldwide opened a banking account through a mobile money provider in the last three years.
More Than Half Of Cards Issued Globally Were EMV-Enabled (PYMNTS) Rated: A
Data from EMVCo shows that 54.6 percent of all cards issued globally by the end of 2017 were EMV-enabled.
In addition, the number of EMV payment cards in circulation around the world increased by 1 billion over the previous 12 months — to a total of 7.1 billion.
“Both EMV chip card issuance and EMV chip transactions surpassing 50 percent globally is testament to the increasing maturity of the worldwide infrastructure, and [is] a significant milestone for the payments community,” EMVCo Executive Committee Chair Jack Pan commented.
Australia’s top bank says it charged dead clients for advice (CNN) Rated: AAA
Australia’s top bank has admitted to charging fees to clients it knew had died years previously.
Commonwealth Bank of Australia () told a government inquiry Thursday that the practice of billing deceased customers for financial advice stretched back years. In one instance, an adviser at the bank’s financial planning business was collecting fees from a client more than a decade after they had died.
The revelations emerged as part of a Royal Commission, or public inquiry, into malpractice in Australia’s financial services industry.
One winner from the banking royal commission (The Australian) Rated: B
The peer-to-peer lending space may be a major beneficiary of the poor practice scandals coming out of the Royal Commission, according to one non-bank lender.
Online lender ME has announced it is increasing home loan interest rates across its variable mortgage range effective today, citing increased funding costs as the reason – and it’s not the first to do so.
ME hiked its standard variable rate for existing owner-occupier principal-and-interest borrowers with an 80% LVR by 6 basis points, bringing it to 5.09% p.a. (5.11% comparison rate).
Existing investor principal-and-interest borrowers were hit with a bigger increase of 11 basis points, while interest-only borrowers saw the biggest increase of 16 basis points.
High investor FOMO about P2P lending in SE Asia: Funding Societies co-founder Kelvin Teo (Deal Street Asia) Rated: AAA
Your Series B round is likely the largest for a P2P lender in the region. Is that a measure of how strong the investor interest in this space and the potential for the sector in Southeast Asia?
P2P lending is a promising sector in Southeast Asia. We see strong investor interest, but perhaps too much, especially for emerging markets like Indonesia where the fear-of-missing-out (FOMO) is high. SME lending is a technical and a very localized business, and Southeast Asia apparently is not easily understood. We did not realize the significance of them until we started speaking to investors for Series B. In all candour, it was slightly painful to interact with investors who do not know Southeast Asia and/ or lending business.
Is $25 million the amount that you were looking to raise?
We have a trust-based relationship with our shareholders. Our early discussion with our Series A lead investor Sequoia was to raise US$ 10M – 15M.
Alternative investment opportunities in Việt Nam (Viet Nam News) Rated: A
Access to and use of formal financial services is low in Việt Nam compared with other countries in the region, with only 31 per cent of all adults having formal bank accounts in 2016, according to the World Bank.
In 2016, 14.6 per cent of Vietnamese had saved money with a formal financial institution, 18.4 per cent had a loan with a formal financial institution, and only 26.5 per cent had access to a debit card. Interestingly, about 30 per cent of adults borrowed from friends or family in 2016 in Việt Nam, against 18.4 per cent who have borrowed from a financial institution.
Creditas investment a Brazilian first for Santander InnoVentures (Bankless Times) Rated: AAA
Santander InnoVentures, the fintech venture capital fund of Santander Group, announced today an investment in the startup Creditas, a Brazilian secured lending platform. This is Santander InnoVentures’ first investment in Brazil and second in Latin America.
Creditas also announced today an increase of its Series-C funding round to $55 million with the addition of Santander InnoVentures and Amadeus Capital Partners. The round was led by Vostok Emerging Finance (VEF), a company focused on early and growth stage fintech companies across emerging and frontier markets, based in Sweden. Current investors also participated in the round, including Kaszek Ventures, Quona Capital, QED Investors, International Finance Corporation and Naspers Fintech.