- Today’s main news: LendingTree to acquire Student Loan Hero. SoFi to go after brokerage business. British Business Bank talking about backing Funding Circle loans. Funding Circle slashes US exposure. Duanrong raises $45M.
- Today’s main analysis: Deep dive on inflation.
- Today’s thought-provoking articles: New LendingClub account performance. New York state’s recommendations for online lending. Is there subprime auto loan bubble in China? Smart Crowd helps microinvestors build wealth.
- LendingTree to acquire Student Loan Hero. I can’t think of a better merger. These two serve the same audience, and Student Loan Hero will likely deliver more revenue for LendingTree in the long term.
- SoFi to go after brokerage business. This is an important shift for SoFi.
- Deep dive on inflation trends. As always, PeerIQ breaks it down and focuses on important data, and delivers beautiful charts.
- New LendingClub account performance. From Lend Academy.
- New York Department of Financial Services makes recommendations for online lending. This is a mus-read report for online lenders doing business or thinking about doing business in New York. And it’s notable that any recommendations that are adopted by the state of New York could very well be adopted in other states, so this is a viable read for any online lender.
- Loan applicants reverse engineer online lending algorithms.
- If you send money to the wrong Venmo account, you may not get it back.
- Baker Hill partners with West Texas State Bank on loan originations.
- Uphold partners with Libra Credit on crypto lending.
- How to choose your first real estate crowdfunding investment.
- British Business Bank in talks to back Funding Circle loans.
- Funding Circle slashes US exposure.
- LendInvest partners with Onfido.
- Lending Works raises 2.8 million GBP.
- Tiller intros a robo-advisor.
- There’s no subprime auto loan bubble.
- Duanrong raises $45 million.
- Toutiao offers cash loan products online.
- United States
- LendingTree, Inc. Announces Agreement To Acquire Student Loan Hero (Payment Week) Rated: AAA
- We are going after the brokerage business, says SoFi CEO (CNBC) Rated: AAA
- Rising Inflation, Deep-Dive on Inflation Trends (PeerIQ), Rated: AAA
- New LendingClub Account Performance – Q2 2018 (Lend Academy) Rated: AAA
- DFS Releases Recommendations for Online Lending (deBanked), Rated: AAA
- Loan applicants are reverse engineering the online lending algorithms (Tearsheet) Rated: A
- You Accidentally Sent $ 149 to a Stranger on Venmo? Good Luck Getting It Back (Wall Street Journal) Rated: A
- Baker Hill Inks Loan Origination Deal with West Texas State Bank (Finovate) Rated: A
- Uphold To Bring Crypto-Backed Credit To Members With Libra Credit Partnership (Block Tribune) Rated: A
- How to Choose Your First Real Estate Crowdfunding Investment (U.S. News) Rated: A
- United Kingdom
- British Business Bank in talks to back £150m of Funding Circle loans (Peer2Peer Finance) Rated: AAA
- Funding Circle slashes US exposure after dividend cut (Citywire) Rated: AAA
- LendInvest partners Onfido for digital verification services (Verdict) Rated: A
- UK Peer to Peer Lender Lending Works Raises £2.8 Million in New Funding Round (Crowdfund Insider) Rated: A
- Another robo-adviser enters the fray: Tiller lets you invest in passive AND active funds – so how does it compare? (This is Money) Rated: A
- There’s No Subprime Bubble in China Auto Loans (Bloomberg) Rated: AAA
- Chinese Fintech Platform Duanrong.com Raises $ 45M Series B Round (China Money Network) Rated: AAA
- China: WeiyangX Fintech Review (Crowdfund Insider) Rated: A
- European Union
- Fundvisory Raises €1.8M From Macif and Aviva France (Coverager) Rated: AAA
- RBI Grants NBFC-P2P Certification to Cashkumar (Silicon India) Rated: AAA
- Japanese startup Paidy raises $ 55M Series C to let people shop online without a credit card (Tech Crunch) Rated: AAA
- Bambu raises $ 3m in Series A funding (FinTech Futures) Rated: A
- Lendr wins Asian award for innovative partnership (Manila Standard) Rated: B
- Generation Start-up: Smart Crowd helps micro-investors build wealth, brick by brick (The National) Rated: AAA
- Big data for bigger opportunities (Khaleej Times) Rated: A
LendingTree, Inc. Announces Agreement To Acquire Student Loan Hero (Payment Week) Rated: AAA
LendingTree, Inc. (NASDAQ: TREE) announced today that it has entered into a definitive agreement to acquire Student Loan Hero, Inc., a personal finance website dedicated to helping student loan borrowers manage their student debt. Student Loan Hero offers current and former students in-depth financial comparison tools, educational resources, and unbiased, personalized advice.
We are going after the brokerage business, says SoFi CEO (CNBC) Rated: AAA
SoFi CEO Anthony Noto discusses the company’s “modern take on the checking account” and where he seeing the next big investment opportunity, including cryptocurrency.
Rising Inflation, Deep-Dive on Inflation Trends (PeerIQ), Rated: AAA
Consumer credit increased by $26.4 Bn in May, the largest monthly jump in 6 months, to an all-time high of $3.9 Tn. Growth was driven by a $9.8 Bn increase in revolving credit card debt. Credit growth has been averaging 7.6% fueling consumer spend-driven GDP growth. The Fed’s latest G-19 report can be found here.
Rising US Inflation
US CPI rose by 2.9% YoY, its highest reading since March 2012. This week we look at various inflation measures and how they stack up against the Fed’s 2% inflation target.
Measured Inflation vs the Fed’s Inflation Target
New LendingClub Account Performance – Q2 2018 (Lend Academy) Rated: AAA
The current status of my LendingClub account is very typical for new investors. A handful of loans have been paid in full while just a couple have entered either grace period or the late 31-120 days stage. A majority of the loans are issued and current.
Below is a screenshot of my target allocation shortly after account setup with about half of my capital allocated to LendingClub notes.
Below is a screenshot as of today with all $5,000 invested which now closely resembles my target allocation.
DFS Releases Recommendations for Online Lending (deBanked), Rated: AAA
The New York State Department of Financial Services (DFS) released a report on Wednesday on the subject of online lending in the state. The report was mandated by a billsigned by New York Governor Andrew Cuomo on June 1 of last year.
Access the full report here.
Loan applicants are reverse engineering the online lending algorithms (Tearsheet) Rated: A
Online lenders are assailed by fraudsters on all fronts. There were 1579 data breaches in the U.S. in 2017, 302 of which resulted in the exposure of full credit and debit card numbers. Because online finance frees up applicants from having to show up physically to a bank, it also opens up opportunities for identity fraud. This really is the other side of phishing and identity hacks. Once data ends up in the hands of criminals, the next step is to monetize it by taking out fraudulent loans.
Kabbage claims that 95 percent of its customers have a fully-automated underwriting experience. “By getting customers to connect their Amazon, Square, eBay, and business bank accounts, Kabbage gets a direct view into the finances of a small business borrower,” said Yaakov Erlichman, vice president of fraud and underwriting strategy at Kabbage. “We have more than two million live data connections. It’s really hard to fake live business data.”
You Accidentally Sent $ 149 to a Stranger on Venmo? Good Luck Getting It Back (Wall Street Journal) Rated: A
With the rise of money-transfer apps such as PayPal Holdings Inc.’s Venmo, it’s never been easier for people to send money to their friends. It’s also never been easier to accidentally send money to a total stranger.
Getting the money back is often far more difficult: Many digital payments are irreversible.
For the recipient, it’s the equivalent of finding cash on the sidewalk— except it comes with a moral quandary.
Baker Hill Inks Loan Origination Deal with West Texas State Bank (Finovate) Rated: A
One month after bringing its loan origination platform to $5.6-billion North Carolina-based First Bank, Baker Hill is back in the news. The fintech is teaming up with West Texas State Bank (WTSB) to support efficient loan growth with its NextGen Loan Origination for Commercial and Consumer Lending platform. The technology, in the words of West Texas State Bank Chief Lending Officer and COO Les Robbins, will help the bank “streamline the origination process with … roles-based, intuitive lending solutions.”
Uphold To Bring Crypto-Backed Credit To Members With Libra Credit Partnership (Block Tribune) Rated: A
Founded by former PayPal financial technology veterans, Libra Credit is an ethereum-based lending network that facilitates open access to credit anywhere and anytime. Libra Credit offers a seamless digital lending process that can be completed in five steps: application, verification and credit assessment, confirmation, collateral deposit, and disbursement. The platform focuses on a dual-credit risk scoring mechanism that considers the creditworthiness of the pledged collateral as well as the credit information of the borrower. Borrowers will be able to pledge any crypto-assets as collateral and receive loans in their desired asset.
How to Choose Your First Real Estate Crowdfunding Investment (U.S. News) Rated: A
Crowdfunded real estate investments account for $2.5 billion of the $7 trillion commercial real estate market, according to CFX Markets. There’s major growth potential in the industry as more investors lock in on the benefits of investing in real estate through crowdfunding platforms.
British Business Bank in talks to back £150m of Funding Circle loans (Peer2Peer Finance) Rated: AAA
FUNDING Circle’s listed investment trust is in talks with the British Business Bank (BBB) about providing further funding through the peer-to-peer platform.
It comes as the Funding Circle SME Income Fund (FCIF) reported its net asset value (NAV) had increased from £308m to £165m in the year to March 2018, while its NAV total return was 14.9 per cent.
FCIF highlighted a structured finance transaction with Citibank to fund loans through the Funding Circle platform as one of its major deals last year, and also revealed it was in talks with the BBB about providing up to £150m of funding.
Funding Circle slashes US exposure after dividend cut (Citywire) Rated: AAA
Funding Circle SME Income (FCIF) will reduce exposure to US loans after the increased cost of hedging the dollar saw the listed peer-to-peer fund cut its dividend.
Last month, the alternative lender to small businesses said it would cut its annual dividend of 6.5p per share to between 5p and 6p, after a ‘material increase’ in the cost of removing the impact of changes in the value of the dollar on its portfolio.
However, a ‘partial reallocation of capital deployment away from the US and towards the UK and continental Europe’ will see North American loans fall by up to 10% from 25% of the £329 million portfolio.
LendInvest partners Onfido for digital verification services (Verdict) Rated: A
Instead of the need for paper forms, LendInvest BTL applicants can now confirm their identity online by incorporating Onfido’s proprietary technology into its digital application system.
The new solution not only eliminates the needs for certified physical copy documents and saves time, but also it makes the mortgage application process easier for both brokers and their clients
Plans are also being considered to add Onfido technology into the onboarding process used for LendInvest’s online investment platform in the future.
UK Peer to Peer Lender Lending Works Raises £2.8 Million in New Funding Round (Crowdfund Insider) Rated: A
Lending Works has received £2.8 million in funding in a round led by Maven Capital Partners, with £800,000 of backing from Pollen Street Capital and NVM Private Equity. The UK peer to peer lender said proceeds will be used to fuel growth including loan customer acquisition via other channels.
Founded in 2014, Lending Works has originated approximately £115 million in loans with £32 million (27%) in the first half of 2018. – 27% of which (£32 million) was distributed in the first half of 2018 alone. Lending Works expects to originate £100 million in loans during 2018. The P2P lender is also a member of the UK Peer to Peer Finance Association (P2PFA) – the association that represents leading P2P platforms.
Another robo-adviser enters the fray: Tiller lets you invest in passive AND active funds – so how does it compare? (This is Money) Rated: A
Another player has entered the increasingly crowded ‘robo-advice’ space to cater for modest investors who have been priced out of conventional financial advice.
The new service, called Tiller, will pit against the likes of Nutmeg and Moneyfarm in a bid to win the custom of those investing smaller amounts who are under-served by financial advisers.
Like many of its competitors, Tiller creates a personalised portfolio which is rebalanced if necessary, buying and selling depending on what the markets do.
There’s No Subprime Bubble in China Auto Loans (Bloomberg) Rated: AAA
Slowing car sales and tightening credit look like a toxic combination for China’s auto-financing industry, which has exploded in the past few years. Concerns the sector is heading for a subprime-like meltdown may be overblown, though.
Sales in the world’s largest car market rose 2.3 percent in June from a year earlier, data showed last week. While faster than several analysts expected, growth decelerated from an 8 percent pace in May. Compared with the previous month, deliveries fell about 1 percent in June.
The cooling coincides with Beijing’s quest to deleverage the financial system, which has led to tighter liquidity, reduced access to credit and, in theory, squeezed consumer discretionary spending. In a report last week, analysts at Sanford C. Bernstein linked the weakness in car sales to a slowdown in peer-to-peer lending, pointing to “the deflation of what amounts to a subprime (P2P) auto bubble.”
Chinese Fintech Platform Duanrong.com Raises $ 45M Series B Round (China Money Network) Rated: AAA
China Money Network’s DealShot provides detailed information on venture capital and private equity deals in China on a daily basis.
Here you can find out where Chinese investors have been investing their money each workday.
|Duanrong.com||Series C||Lanua Asia fund||Fintech||Beijing|
|LemonBox||Seed Round||Y Combinator, Guangjian Lab||E-commerce||Beijing|
|58 Suyun||Series A||InnoVision Capital||Cainiao Network, Russia-China Investment Fund (RCIF), Qianhai Fund of Funds, 58 Daojia||Logistics||Tianjin|
|Honor Alliance||Series A||Angel Around Investment Fund||Enterprise services||Beijing|
|ASR Microelectronic||Series B||IDG Capital, Wanrong Hongtu Fund||Smart Hardware||Shanghai|
|Hash World||Series A+||Shunwei Capital||Danhua Capital||Blockchain||Beijing|
|EON Protocol||Angel Round||UpHonest Capital, BGOGO, Fission Capital||Blockchain|
|Paopao Hero||Series A||undisclosed||Consumer Upgrade||Guangzhou|
|51signing.com||Series A||Fenbushi Capital, DL Capitals||Enterprise services||Beijing|
|Viva Vision Biotech||Series B||Healthcare||Shanghai|
|iBanker||Pre-A||Button Capital||Mindfulness Capital, AC Capital||Education||Beijing|
|Soushi88.com||Series A||Ferry Venture Capital||Buhuo Ventures||E-commerce||Guangzhou|
|IPSTAR||Pre-A||miHoYo||Volcanics Venture, Shenzhen Huode Qianhai Fund Management Co., Ltd||Media & Entertainment||Shanghai|
|Huaqiang PCB||Series B||Cowin Capital, China Merchants Bank||E-commerce||Shenzhen|
China: WeiyangX Fintech Review (Crowdfund Insider) Rated: A
Toutiao Marches into the Fintech Market with Cash Loan Products
China’s leading digital media platform Toutiao has long denied the potential of entering the financial markets. However, it is reported this week that a series of cash loan products have launched on Toutiao’s app without too much marketing.
The product Fangxinjie (literally meaning reliable lending) was listed within Toutiao’s digital wallet with credit up to￥200,000 yuan and daily interest low to 0.03%.
Fintech Startup xyb100 Secures ¥200 Million B Round Funding led by Japanese Financial Institution Credit Saison
This week, fintech startup xyb100 announced that it had secured ￥200 million B round funding by famous Japanese financial institution Credit Saison.
Fundvisory Raises €1.8M From Macif and Aviva France (Coverager) Rated: AAA
Founded in 2015, Fundvisory provides automated and modular robo-advisory tools such as portfolio monitoring, risk profiling and compliance to help financial institutions digitize their financial advisory services. Led by Nicolas Gonzalez and Romain Deguest, the startup previously raised 300,000 euros from friends and family, and is currently a team of 10 according to LinkedIn.
RBI Grants NBFC-P2P Certification to Cashkumar (Silicon India) Rated: AAA
According to a recent Morgan Stanley report, Indian P2P lending industry is estimated to cross the $4 billion mark by 2021. Owing top such pleasing industry forecast, along with the additional support schemes & initiatives from the Government, the fintech players in India have garnered a lot of momentum. In this light, Cashkumar, one of India’s leading P2P lending companies, announced that it has been granted the NBFC-P2P license from RBI (Reserve Bank of India). With this, Cashkumar joins the list of the very few fintech firms who hold the NBFC-P2P accreditation. Post this, the company focuses on providing loans between 20,000-100,000 with tenures of 3-12 months and offering only to salaried individuals.
Japanese startup Paidy raises $ 55M Series C to let people shop online without a credit card (Tech Crunch) Rated: AAA
Paidy, a fintech startup that enables Japanese consumers to shop online without using a credit card, announced today that it has raised a $55 million Series C. The round was led by Japanese trade conglomerate Itochu Corporation, with participation from Goldman Sachs.
The Tokyo-based startup says this brings its total funding so far to $80 million, including a $15 million Series B announced two years ago. One notable fact about Paidy’s funding is that it’s raised a sizable amount for Japanese startup, especially one with non-Japanese founders (its CEO and co-founder is Canadian and Goldman Sachs alum Russell Cummer, left in the photo above with CTO and co-founder Lee Smith).
Bambu raises $ 3m in Series A funding (FinTech Futures) Rated: A
Bambu CEO and founder Ned Phillips says it has topped growth targets for the year, and points to seven new clients in Asia and the US that were slated to go live soon.
He adds: “Our next ambitious goal is to get a million end users on the platform by 2019.”
Also participating in the round were Singapore family office Octava and Japanese fintech investor Mamoru Taniya.
The funding takes Bambu’s total capital to more than $4 million.
Lendr wins Asian award for innovative partnership (Manila Standard) Rated: B
Lendr, the digital lending platform of FINTQnologies Corp., bagged the ‘Most Innovative Partnership Strategy’ award at the 21st Annual Telecom Asia Awards on June 26 in Singapore.
Generation Start-up: Smart Crowd helps micro-investors build wealth, brick by brick (The National) Rated: AAA
In the case of Smart Crowd, the platform enables fractional ownership of real estate. Investors can purchase a stake in a rental property for as little as Dh5,000 ($1,300), ‘co-owning’ the asset along with tens, hundreds (or thousands, depending on the size and value of the unit) of other people.
They can hold their stake for as long as they wish, collecting the rent from it, or sell it and use the proceeds to invest in something else listed on the platform. Or they can use accumulated returns to buy a property on their own.
Smart Crowd is licensed by the Dubai Financial Services Authority, the regulator of Dubai International Financial Centre, Dubai’s financial free zone, to provide crowdfunding services for real estate. It won regulatory approval in January, obtained an operating licence in April, and in June completed its first transaction – the acquisition of a Dh365,000 studio in Remraam generating a gross annual yield of 10.8 per cent (approximately 8.6 per cent with fees), the founders say.
Big data for bigger opportunities (Khaleej Times) Rated: A
Businesses in Dubai are not sparing any efforts to tap possible avenues to boost sales and growth, and the latest trend is that firms specialising in big data are unlocking opportunities to study customer preferences, loyalties and any segment that will help boost customer numbers.
Big data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important: it’s what organisations do with the data that matters. Big data can be analysed for insights that lead to better decisions and strategic business moves, according to the definition given by SAS Institute.