- Today’s main news: One student saved $20K on a SoFi student loan. PayPal, Google deepen partnership. Zopa to hire a social media strategist. Ant Financial is a top 10 global bank.
- Today’s main analysis: Improved MPL pools are no guarantee of ABS performance.
- Today’s thought-provoking articles: A deeper look at GreenSky. Quants and fundamentalists. Ways to impress a lead investor. Helping SMEs with P2P financing. Millennials lead an investment revolution.
- How one student saved $20K on a SoFi loan. These types of stories are SoFi’s best marketing, and it didn’t come from SoFi.
- Is it clear skies ahead for GreenSky? GreenSky is exiting the gate looking good. To raise this kind of money on an IPO and be profitable for the past five years is a startup’s dream, and they’re living it.
- PayPal, Google deepen partnership. This sets PayPal up nicely to use Google as a customer acquisition point for lending products.
- Improved MPL pools no guarantee of ABS performance. This is an important read for companies looking at issuing securitizations, a growing trend in marketplace lending. Don’t miss this read.
- Quants and fundamentalists unite. A decent read.
- Millennials are leading an investment revolution. I’m all for making an impact and being socially responsible, but if it isn’t profitable, then don’t count on retirement. That said, the millennial generation is definitely a different generation, and it’s quite refreshing to keep reading about them.
- The impact of online lenders on small businesses.
- Why foreign investors love U.S. commercial real estate.
- Better get your artificial intelligence game on.
- Former American Express chief backs immigrant credit score provider.
- OnDeck, Kabbage, Lendio drive up their share of business lending.
- Emerging alternative finance.
- Layered Insight snags top advisors.
- Renew Financial recruits veteran Prosper exec as CEO.
- Zopa to hire first social media executive.
- LendInvest debuts first official buy-to-let legal panel.
- Allianz leads funding round for Moneyfarm.
- Swoop partners with Hiscox.
- Ashley Finance appoints bridging regional sales director.
- Ant Financial a top 10 bank globally. And I think there’s good reason to see them move up the ranks fairly quickly.
- Dianrong to use R3’s Corda ledger.
- United States
- ‘I’m saving over $ 20,000’: Why you should consider refinancing your student loans through SoFi (Business Insider) Rated: AAA
- GreenSky: Clear Skies Ahead (Seeking Alpha) Rated: AAA
- PayPal and Google are deepening their partnership (Business Insider) Rated: AAA
- Improved MPL pools no guarantee of ABS performance, says Fitch (Asset Securitization Report) Rated: AAA
- QUANTS AND FUNDAMENTALISTS UNITE! (All About Alpha) Rated: AAA
- Millennials are leading an investment revolution — here’s what makes their generation different (Business Insider) Rated:AAA
- New Report on the Impact of Online Lenders on Small Businesses (Lend Academy) Rated: A
- Why Foreign Investors Love U.S. Commercial Real Estate, And Why More Will Follow (Forbes) Rated: A
- Better Get Your AI Game On (Prime Meridian Capital Management) Rated: A
- Former Amex chief backs immigrant credit score provider (Financial Times) Rated: A
- OnDeck, Kabbage, Lendio Continue to Drive Up Their Share of Small Business Lending (Bank Innovation) Rated: A
- Emerge With An Alternative (Scotsman Guide) Rated: A
- Layered Insight Snags Top CISOs As Advisors (PR Newswire) Rated: B
- Renew Financial Elevates Financial Services Veteran Kirk Inglis to CEO (PR Newswire) Rated: B
- United Kingdom
- Zopa to hire first social media executive to broaden customer focus (Peer2Peer Finance) Rated: AAA
- LendInvest Debuts First Official BTL Legal Panel Six Months After Product Launch (Crowdfund Insider) Rated: A
- Allianz leads £40m funding round in Moneyfarm (Fintech Futures) Rated: A
- SME funding platform partners with Hiscox (Peer2Peer Finance) Rated: B
- Ashley Finance appoints bridging regional sales director (Bridging & Commercial) Rated: B
- Ant Financial is Now a Top 10 “Bank” Globally (Lend Academy) Rated: AAA
- Dianrong to land on distributed ledger Corda (Tech Node) Rated: A
- Neo lender increases loan limits (Australian Broker) Rated: AAA
- Analysis of new mortgage lending shows the slump in Auckland home sales has affected all types of buyers (Interest) Rated: A
- Ways to Impress a Leading Investor for Your First Venture Capital Fund (Entrepreneur) Rated: AAA
- Mobikwik plans to turn around biz with UPI and loans: But is it too late? (EnTrackr) Rated: A
- Helping SMEs build their business with P2P financing (Tech Wire) Rated: AAA
- Meet Piggybank.ng, The Nigerian FinTech Startup That Just Raised $ 1.1million (Forbes) Rated: AAA
- SA’s Crossfin, Investec to back early-stage fintech startups (Disrupt Africa) Rated: A
- Fundbox Wins The Prestigious Israeli Atlas Award For Best Fintech Startup (The Virginian Pilot) Rated: A
‘I’m saving over $ 20,000’: Why you should consider refinancing your student loans through SoFi (Business Insider) Rated: AAA
Student debt is growing in the US and looming as a major ongoing issue. With a total of $1.48 trillion in student loan debt in the US, spread among 44 million borrowers, Americans now have more student loan debt than credit card debt, according to Student Loan Hero.
Interest rates, meanwhile, are punishing, even more so depending on the type of loan you get, and the level of education you’re paying for. According to data from the Department of Education, rates range from around 3.5% to as high as 8.5% — with most types of loans floating in the 5-7% range. That’s extraordinarily high when you consider that many auto loan rates and even mortgages are lower.
GreenSky: Clear Skies Ahead (Seeking Alpha) Rated: AAA
The company offered 38.0 million shares to the public that priced at the upper end of the range at $23. The over allotment grant added another 5.7 million shares to the total offering. Selling shareholders offered all of the shares with gross proceeds of $1 billion.
GreenSky ended the day virtually unchanged at $23.26 at a time when most IPOs trade in more volatile ranges. The stock only had a range of $22.05 to $23.36 suggesting minimal initial interest by traders.
At the current price of $26.70, GreenSky has a market value of over $5.1 billion on 190 million shares outstanding (including the 5.7 million over-allotment option) with sales on pace to likely top $400 million this year.
The numbers though suggest anything but a boring company. Transaction volume jumped 47% to $1.0 billion during the March quarter and active merchants grew equally impressive at 52%. The fintech is even profitable.
PayPal and Google are deepening their partnership (Business Insider) Rated: AAA
PayPal and Google are extending their payments relationship across Google’s entire ecosystem, according to Finextra and TechCrunch. The two firms have worked together for awhile, as customers are able to integrate their PayPal accounts directly into Google Pay, Google’s mobile wallet.
But now, they’re taking the partnership a step further, allowing customers to enter their PayPal credentials once and then have them available for various types of payments, including bill pay and peer-to-peer (P2P) payments, across Google offerings such as Gmail, Google Play, Google Store, and YouTube. The partnership is expected to roll out in full later this year.
Improved MPL pools no guarantee of ABS performance, says Fitch (Asset Securitization Report) Rated: AAA
Marketplace lenders such as LendingClub and Prosper have made strides in improving underwriting standards in the past year.
In a report issued Thursday, Fitch said investors should still be wary of assuming new-issue MPL securitizations are a step up in quality over previous ABS deals, even though firms such as LendingClub and Prosper have taken steps to tighten lending standards as well as pool greater concentrations of borrowers with higher credit scores into their recent ABS deals.
LendingClub (NYSE:LC), for instance, boosted the weighted average FICO of its most recent prime/near-prime consumer-loan securitizations in December to 703, compared with 692 in its first asset-backed transaction of 2017.
LendingClub’s most recent self-sponsored transaction, Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1, had its base-case loss range tightened to 13.25%-15.25% by Kroll Bond Rating Agency, compared with 14%-16% in its CLUB 2017-P2 transaction. (In December, LendingClub pooled a collection of subprime loans with credit scores below 660, with a base-case loss range of 19.65%-21.65%.)
QUANTS AND FUNDAMENTALISTS UNITE! (All About Alpha) Rated: AAA
But the Bloomberg Professional Services Blog has run a piece recently on “quantamental” investing, indicating that a merger of the two approaches is underway. Darwinian pressures aren’t kind to presuppositions or to the purity of paradigms. And it is survival of the fittest that is at work here, because fitness requires on the one hand that the quants use good (human) judgment to monitor and adjust the investment process to the prevailing market conditions, while it also requires that any workable fundamental approach employ “promising aspects of technology … to reduce bias and random noise.”
“Alternative data” means what it sounds like it means: every sort of datum that one would not traditionally have expected to come up in a discussion of trades, investments, or portfolio allocations.
These sources can include (Bloomberg’s list), “social media posts, credit card accounts, online browsing activity, foot traffic and weather patterns.” Any and all of these can include clues to ongoing and future trends. The use of any such source, or any cross-referencing of sources that can produce patterns, may be novel this week, customary next week, and a bare minimum for survival in the trading jungle the week after that.
Millennials are leading an investment revolution — here’s what makes their generation different (Business Insider) Rated:AAA
Nuveen’s “Third Annual Responsible Investing Survey” of over 1,000 affluent investors found there was increased interest in working for, buying from, and investing in socially responsible companies. This is even more true among the millennials surveyed.
Some 92% of millennials agreed with the statement “I care more about having a positive impact on society than doing well financially” compared to 52% of nonmillennials.
We interviewed a handful of millennials, asking them what makes their generation different. They answered: access to information, aligning themselves with brands on social media, and growing up in more comfortable economic circumstances than their parents and grandparents.
New Report on the Impact of Online Lenders on Small Businesses (Lend Academy) Rated: A
Most of us are aware of the importance of small businesses in the US economy. Small businesses employ over half of private-sector workers in the US, so access to capital for small businesses is critical to their success. Fortunately, online lenders such as the ones mentioned in the report have focused on serving the needs of businesses and activity has picked up over the last few years. Both awareness of these alternative options and the amount lent on these platforms is increasing. Originations at five leading online small business lenders increased by 50% in three years, from $2.6 billion in 2015 to $3.9 billion in 2017.
Nearly $10 billion of funding was provided to 180,000 small businesses from 2015 to 2017 according to data which included leading platforms OnDeck, Kabbage and Lendio. This activity has generated $37.7 billion in gross output, created 358,911 jobs and $12.6 billion in wages.
Despite fears of trade wars and increased protectionism, foreign investment in the United States remains robust. In fact, the U.S. continues to be the single largest recipient of foreign direct investment (FDI) in the world: more than $450 billion was pumped into the U.S. economy from other countries in 2016, according to the Bureau of Economic Analysis at the Department of Commerce.
A significant amount of this capital is flowing to commercial real estate (CRE), which continues to be the sector of choice for many foreign investors. International investors have purchased more than $365 billion in U.S. CRE since 2010, with the majority of capital flowing to the largest metropolitan regions. Manhattan alone represented nearly a fifth of all foreign investment in U.S. CRE in 2017, greater than the next three markets combined.
Better Get Your AI Game On (Prime Meridian Capital Management) Rated: A
The AI and algo game is nothing new really. A couple decades ago many called it neural networks and neural computing, and that has evolved into today’s version of AI. But what is different today and so disruptive are three elements that were not there in the early days of machine learning: computing power and cloud-based systems, a growing and global population of computer and data scientists and data. Lots of lots of data.
Those three are increasingly working together in the alternative investments markets space, enabling firms to make much more accurate, and potentially, more profitable investments. The AI topic, discussed at Lendit Fintech USA 2018 conference in San Francisco in April, revealed just how integrated it is already and where it is going in the coming months and years. Listen to the full recording HERE.
Former Amex chief backs immigrant credit score provider (Financial Times) Rated: A
The former American Express chief Ken Chenault is backing a start-up company that provides credit scores for immigrants who struggle to rent apartments and access other basic services upon their arrival in the US.
Workers on overseas postings, international students and other newcomers have long struggled to secure credit cards and other loans because American institutions hold no records on them.
Nova Credit, which is among a new breed of Silicon Valley companies seeking to shake up the financial system, aims to address the problem. It has secured funding from General Catalyst, the venture capital group that has stood behind companies including Snap, Stripe and Warby Parker.
OnDeck, Kabbage, Lendio Continue to Drive Up Their Share of Small Business Lending (Bank Innovation) Rated: A
Layered Insight Snags Top CISOs As Advisors (PR Newswire) Rated: B
Layered Insight announced today that Tim McKnight, EVP & Chief Information Security Officer at Thomson Reuters, and Richard Seiersen, SVP & Chief Information Security Officer at Lending Club, have joined Layered Insight’s Advisory Board.
Renew Financial Elevates Financial Services Veteran Kirk Inglis to CEO (PR Newswire) Rated: B
Renew Financial, the inventor of Property Assessed Clean Energy (PACE) financing and a leading provider of financing for home improvements, today announced that Kirk Inglis, currently Renew Financial’s Chief Financial Officer (CFO), will succeed Cisco DeVries as Chief Executive Officer (CEO) of the company. Mr. Inglis brings more than 20 years of experience in financial services and technology with a deep expertise in consumer lending. His career includes senior finance and operating roles with Calypso Technology, Prosper Marketplace and Providian Financial Corporation. Mr. DeVries will become the company’s Chief Innovation Officer to focus on key growth opportunities and to help innovate new financing tools for clean energy. DeVries will continue to serve on Renew Financial’s board of directors.
Ant Financial is Now a Top 10 “Bank” Globally (Lend Academy) Rated: AAA
It had been rumored for some time now. Ant Financial, the Chinese financial behemoth, was raising a very large funding round that would value the company at $150 billion. It has been reported extensively today that this funding round has in fact closed. Ant Financial has raised $10 billion at a $150 billion valuation.
For a brief primer on Ant Financial there is a decent summary on their English language websitebut for a deeper understanding I recommend you read Chris Skinner’s new book, Digital Human (the Kindle version is available now). This has a 30,000 word case study that not only shares the history of Ant Financial but also why they are one of the world’s most forward thinking companies. And if you think they are just a Chinese story, think again. Ant Financial embodies the future of financial services and they will, in my opinion, shape the future of financial services more than any other fintech company on the planet.
Dianrong to land on distributed ledger Corda (Tech Node) Rated: A
Dianrong (点融), a leading Chinese online P2P lending service provider today announced cooperation with R3, a global platform specializing in distributed data technology. The Chinese fintech company’s supply chain finance solutions will land on Corda, R3’s open-source distributed ledger.
Dianrong hopes the cooperation will enable the company’s end-to-end service through a comprehensive supply chain and increase efficiency by ensuring transparency. The company’s initiative is to allow micro and small businesses to access credit and financial services.
Neo lender increases loan limits (Australian Broker) Rated: AAA
As of this week, Wisr will increase its personal loan limit from $35,000 up to $50,000, with a comparative interest rate up to 5% p.a. lower than the four major banks.
Loans will be available for any worthwhile purpose over three or five years, with a comparison rate of 9.36% p.a. for borrowers with a strong credit rating. The neo-lender also offers no early repayment or exit fees.
Analysis of new mortgage lending shows the slump in Auckland home sales has affected all types of buyers (Interest) Rated: A
The report analyses the number of mortgages taken out in the 12 month periods to the end of March from 2014 to March 2018, and breaks them into borrower types – first home buyers, investors, people moving house, those staying put but refinancing and those buying a second home.
According to Real Estate Institute of New Zealand figures, Auckland property sales peaked in their current cycle in the 12 months to March 2016, when 30,631 homes were sold.
That number has steadily declined and in the 12 months to March this year had slumped to 21,628, a decline of 29.4%.
Ways to Impress a Leading Investor for Your First Venture Capital Fund (Entrepreneur) Rated: AAA
Today’s investors are undoubtedly looking at technology-driven startups with a difference. The best illustration here is Flipkart which managed to introduce the right technology-driven models at a time when people had to wait endlessly to buy products of their choice. With Walmart now having acquired majority stakes in Flipkart, more technology-driven models could potentially come to the fore.
Mobikwik plans to turn around biz with UPI and loans: But is it too late? (EnTrackr) Rated: A
The digital wallet company finally integrated its platform with government-owned unified payment interface (UPI) last week. A week later, numbers related to UPI have popped up that has reached a 5 million mark via @ikwik handles, a VPA (Virtual payment address) handle for UPI, according to an ET report.
The platform is also planning to partner with NBFCs to disburse loans to small businesses in the range of Rs 20,000 up to Rs 5 lakh.
Helping SMEs build their business with P2P financing (Tech Wire) Rated: AAA
In Malaysia, regional P2P digital financing platform Funding Societies has announced an alliance with United Overseas Bank (UOB), to provide P2P lending to small businesses.
Using the Funding Societies platform, small businesses banking with UOB Malaysia can raise up to MYR500,000 (US$125,720) in capital directly from investors.
Funding Societies is the first P2P financing service introduced in Malaysia. Based in Singapore, the company also has a presence in Indonesia, where it’s known as Modalku.
Meet Piggybank.ng, The Nigerian FinTech Startup That Just Raised $ 1.1million (Forbes) Rated: AAA
A two-year old Nigerian fintech start-up this week announced that it has raised a $1.1M Seed Fundraise, to grow its online savings platform, Piggybank.ng. The company, started by Somto Ifezue, Odunayo Eweniyi and Joshua Chibueze, who first met at Covenant University, Nigeria, is tackling a problem endemic to Nigeria, and across Africa; savings. According to the company, 80% of Nigerians – and most probably all Africans – need to save at least 40% of their monthly income to survive and pay for every day expenses. However in a society such as Nigeria, with no credit system to speak of, the vast majority of payments are made in cash and savings, inevitably, slip away.
SA’s Crossfin, Investec to back early-stage fintech startups (Disrupt Africa) Rated: A
South African investment fund Crossfin has concluded a deal with banking and asset management group Investec that will see the two companies identify early-stage fintech startups in which to invest through Crossfin’s angel funding arm Blue Garnet Investments.
The Crossfin fund, which has a particular focus on fintech startups, was formed in June of last year after South Africa-based private equity and venture capital firm Capital Eye and the Multiply Group signed a strategic investment partnership.
Fundbox Wins The Prestigious Israeli Atlas Award For Best Fintech Startup (The Virginian Pilot) Rated: A
Today, Fundbox, the small business growth company, announced that the company has won the coveted Israeli Atlas Award for Best Fintech Start-Up. For a third year in a row, the 2018 Israeli Atlas Award event was held in cooperation with the Ayn Rand Center, The Marker and such leading partners as, BDI, IVC, Bank Hapoalim and Israel Aerospace Industries. The prize is awarded to those Israeli startups that have created a technology, idea or product of exceptional value in Israel over the past year.