- Today’s main news: Funding Circle U.S. sees loan defaults go up. OnDeck sales expectations. LendInvest raises $39.5M. Zopa boosts target interest rates on all products. UnionPay launches European expansion. Qatar Investment Authority could invest in Lufax.
- Today’s main analysis: Navient, Nelnet and the student loan market.
- Today’s thought-provoking articles: This former Googler, Facebook employee is running with SoFi. What’s happening in the IPO market. Interview with president of Grab. Digital banking transformation in Africa.
- Funding Circle’s loan defaults go up in U.S. This is following a boom in the credit cycle. Defaults usually rise immediately following such booms.
- How this former Googler, Facebook employee helps people reach financial goals. It’s good to highlight high-profile executives who are not the CEO, COO, CFO, or CTO. In this case, Forbes talked to the vice president of membership at SoFi, Libby Leffler.
- What brokers expect of OnDeck’s quarterly sales. I think it’s safe to say, there are pretty high expectations of OnDeck going forward.
- Navient and Nelnet and the student loan market. A great analysis from PeerIQ.
- What can Lehman Brothers teach about crypto lending?
- Property Genius harnesses big data.
- Renaud Laplanche vows not to make the same mistakes as with Lending Club.
- Interview with Charles Anderson of Currency.
- CoreLogic launches AutomatIQ Borrower.
- Lendr offers support to victims of Hurricane Florence.
- LendInvest raises $39.5 million. LendInvest has been making some bold moves lately. Congratulations.
- LendInvest is gearing up for an IPO.
- Zopa boosts target interest rates for all products.
- Church of England considers bailing out Wonga.
- Orca Money to raise $500,000 through equity crowdfunding.
- Goji’s CTO talks about bridging the gap between tech and stakeholders.
- Lenders flock to Scotland while P2P lending takes off.
- UnionPay launches European expansion in the UK.
- Klarna Bank to acquire Close Brothers Retail Finance.
- Banks get on the fintech bandwagon.
- China: NIFA registers 94 million online loans.
- Australia: ASIC warns fintech business lenders over contracts.
- Asia: Grab president talks about going international.
- Africa: The digital transformation of banking.
- China: Online registration begins for victims of illegal fundraising schemes.
- Australia: Why this small business owner used a P2P lender.
- Indonesia: KinerjaPay launches P2P lending platform.
- United States
- Funding Circle Fund Sees US Loan Defaults Rise (PYMNTS) Rated: AAA
- How This Former Google And Facebook Employee Is Helping People Reach Their Financial Goals (Forbes) Rated: AAA
- Brokerages Expect On Deck Capital Inc (ONDK) Will Announce Quarterly Sales of $ 94.63 Million (Baseball Daily) Rated: AAA
- Navient & Nelnet and the Student Loan Market, OnDeck milestone (Peer IQ) Rated: AAA
- Lehman Brothers – What It Can Teach The Cryptocurrency Business About Lending (Block Tribune) Rated: A
- Property Genius Harnesses Big Data to Help Investors Capitalize on (oaoa) Rated: A
- The founder of LendingClub, ousted two years ago, pledges not to make the same mistakes with his new company (CNBC) Rated: A
- Charles Anderson of Currency (Lend Academy) Rated: A
- CoreLogic Launches AutomatIQ Borrower (Corelogic) Rated: B
- Hurricane Florence / Lendr (Lendr Email) Rated: B
- United Kingdom
- LendInvest raises $ 39.5M to grow its P2P property finance platform (TechCrunch) Rated: AAA
- LendInvest Is Gearing Up To Be London’s Second Peer-To-Peer IPO (Forbes) Rated: A
- Zopa boosts target interest rates across all products (Peer2Peer Finance) Rated: AAA
- Church of England considers Wonga rescue (Charity Finance Week) Rated: A
- Orca Money to Raise 500K via Equity Crowdfunding – Interview with CEO Iain Niblock (P2P Banking) Rated: A
- CTO on our doorstep: David Genn, CTO at Goji, on bridging the gap between the technology team and stakeholders (Information Age) Rated: A
- Lenders flock to Scotland as P2P sector takes off (Peer 2 Peer Finance) Rated: A
- Platform registers 94 mln online loans (CGTN) Rated: AAA
- Online registration starts for victims of illegal fundraising cases (Infosurhoy) Rated: A
- European Union
- China UnionPay kicks off European expansion with UK launch (Financial Times) Rated: AAA
- Klarna Bank to acquire UK’s Close Brothers Retail Finance (Compelo) Rated: A
- Banks jump on to the fintech bandwagon (Financial Times) Rated: A
- Qatar Fund Is Near Investment in China’s Top Online Lender (Bloomberg) Rated: AAA
- What is happening in the IPO market? (Alpha Street) Rated: AAA
- ASIC warns all fintech business lenders over contracts (AFR) Rated: AAA
- Why this small business owner used a peer-to-peer personal loan for funds (Finder) Rated: A
- Going international is nice on PowerPoint but difficult to execute, says Grab president Ming Maa (Deal Street Asia) Rated: AAA
- E-Commerce Platform KinerjaPay Launches P2P Lending Platform “KFUND” (Crowdfund Insider) Rated: A
- The Digital Transformation of Banking – Driving Constructive Economic Outcomes from the FinTech Ecosystem in Africa (Global Banking and Finance) Rated: AAA
Funding Circle Fund Sees US Loan Defaults Rise (PYMNTS) Rated: AAA
In August, more corporate borrowers defaulted on their loans issued by Funding Circle‘s U.S. operations than they did previously in 2018. According to Peer2Peer (P2P) Finance News reports on Friday (Sept. 14), the Funding Circle SME Income Fund (FCIF) revealed there were seven corporate loan defaults in during the month, up from the year’s average so far of six per month.
Still, the company noted, the value of those defaults has inched higher, too. Reports said the FCIF’s net asset value return for August dropped to 0.1 percent from 0.4 percent a month prior, with analysts citing rising impairment charges as a result of the U.S. loan defaults.
How This Former Google And Facebook Employee Is Helping People Reach Their Financial Goals (Forbes) Rated: AAA
Libby Leffler, vice president of membership at Social Finance (SoFi), negotiated with the tooth fairy as a child. “Looking back, I think this lighthearted family story speaks volumes about the way I think about negotiating or knowing one’s worth. Throughout my entire career, I’ve never been shy to ask for a raise or promotion – or both,” she says.
As an adult, Leffler continues to “lean in” and was even business lead to Sheryl Sandberg, the woman who started the Lean In movement. Leffler worked at Google and Facebook before attending Harvard Business School and working at SoFi, a San Francisco-based lending and wealth management company founded in 2011. Now the 2014 Forbes 30 Under 30 alumna is helping people lean in, achieve their financial goals and – of course – negotiate.
Brokerages Expect On Deck Capital Inc (ONDK) Will Announce Quarterly Sales of $ 94.63 Million (Baseball Daily) Rated: AAA
Equities research analysts expect On Deck Capital Inc (NYSE:ONDK) to announce sales of $94.63 million for the current quarter, Zacks Investment Research reports. Four analysts have made estimates for On Deck Capital’s earnings, with the lowest sales estimate coming in at $83.41 million and the highest estimate coming in at $98.74 million. On Deck Capital reported sales of $83.67 million during the same quarter last year, which indicates a positive year over year growth rate of 13.1%. The firm is scheduled to report its next quarterly earnings results on Monday, November 5th.
On average, analysts expect that On Deck Capital will report full year sales of $373.98 million for the current year, with estimates ranging from $331.20 million to $385.61 million. For the next year, analysts forecast that the firm will post sales of $417.35 million per share, with estimates ranging from $361.41 million to $435.88 million. Zacks Investment Research’s sales averages are an average based on a survey of research analysts that that provide coverage for On Deck Capital.
Navient & Nelnet and the Student Loan Market, OnDeck milestone (Peer IQ) Rated: AAA
As discussed in a recent piece in American Banker, Navient and Nelnet are increasing their role in the private student loan market. Both companies are big players in the market for servicing federally funded student loans. Together, they service $405 Bn with approximately 38% of the market share as of March 31, 2018. Nelnet, which currently focuses on servicing student loans, recently applied to for an industrial bank charter.
In April 2014, Navient was spun out of Sallie Mae, splitting the business in two. Sallie Mae continued its consumer banking business as well as origination of private student loans. Navient continued with loan management, servicing, and asset recovery. After the split, Navient kept 99% of the legacy company’s FFELP loans and 83% of the legacy company’s private loans. In October of last year, Navient acquired Earnest, a student, and personal loan lender, for $155 Mn in cash. The acquisition allowed Navient to begin originating student loans under the Earnest brand (as they were previously not allowed to make loans under any brand due to a non-compete with Sallie Mae). Starting in 2019, Navient will be allowed to compete directly with Sallie Mae under the Navient brand.
Lehman Brothers – What It Can Teach The Cryptocurrency Business About Lending (Block Tribune) Rated: A
It was all thanks to a niche security asset that had exploded in popularity: collateralized debt obligations (CDO), which packaged individual loans, such as credit card debt and mortgages, into a secondary market product for investors. In just six years, from 2000 to 2006, the CDO market exploded with sales multiplying from $69B to $500B.
Lehman Brothers, the fourth largest investment bank in the US, invested heavily into these securities, and enjoyed incredible profits as a result. In 2007, Lehman reported net income of $4.2B on $19.3B revenue.
The majority of CDOs were comprised of subprime mortgages. Rated triple-B, at the bottom of investment-grade bonds, these mortgages had been distributed to borrowers with higher-than-average credit risk. Computer models had packaged these CDOs into “tranches” based on interest rate and risk, making CDOs incredibly opaque and complex. These models also assumed that the housing market would continue its upward trajectory.
Property Genius announces the launch of its proprietary, end-to-end research and marketing platform which harnesses big data to streamline the entire process of finding and investing in Off-market and Wholesale real estate. Built specifically with the real estate professional and investor in mind, Property Genius aims to solve a long-standing problem for the industry by organizing extensive amounts of assessor data from numerous sources into one convenient and customizable dashboard to improve investment opportunities. The company’s initial launch utilizes property data in Colorado – with more states soon to follow – helping investors find, purchase, and reap the rewards on opportunistic properties including foreclosures, absentee owners, and other distressed properties.
The founder of LendingClub, ousted two years ago, pledges not to make the same mistakes with his new company (CNBC) Rated: A
More than two years after his ouster from LendingClub, Renaud Laplanche still owns millions of dollars worth of stock in the company he created, even though he’s since started a rival online lender that’s rapidly growing.
For his second act in financial services, Laplanche is focused on avoiding past mistakes. He was forced to resign suddenly from LendingClub in May 2016 for a convoluted set of events involving the questionable sale of certain loans by the company and a lack of transparency with the board.
Laplanche started his new company, Upgrade, in August 2016, three months after leaving LendingClub. His start-up passed $100 million in monthly loan originations in April. By way of comparison, LendingClub, founded in 2006, averaged almost $1 billion in monthly originations in the second quarter.
Charles Anderson of Currency (Lend Academy) Rated: A
One of the largest verticals in all of lending is equipment finance. There is $1.1 trillion worth of equipment financed each year and yet only a tiny fraction of this number is financed in an all digital process.
Our next guest on the Lend Academy Podcast has made it his mission to change that. Charles Anderson is the CEO and Co-Founder of Currency, the world’s first digital equipment finance platform. They are applying technology, often for the first time, to all phases of the equipment buying process.
CoreLogic Launches AutomatIQ Borrower (Corelogic) Rated: B
CoreLogic (NYSE: CLGX) today announced AutomatIQ Borrower, phase one of a comprehensive new underwriting solution designed to help lenders streamline their current mortgage workflows by digitizing, standardizing and automating borrower analysis and verification. By pulling all of the disparate borrower verification tools together into one integrated solution delivered from one provider, AutomatIQ Borrower will help lenders:
- Reduce underwriting costs and time to close
- Improve overall loan quality and user experience
- Increase trust at each step of the borrower underwriting workflow
Hurricane Florence / Lendr (Lendr Email) Rated: B
“All of our clients have been contacted or we will continue to try and get in contact with them and support them in any way we can. We will suspend payments for the rest of September for any client that is affected by Hurricane Florence. Most clients will come back on a reduced payment schedule for a short period of time. In the past we have provided additional funding for clients in need to help get their business back on track due to these types of natural disasters.” – Tim Roach, CEO of Lendr.
LendInvest raises $ 39.5M to grow its P2P property finance platform (TechCrunch) Rated: AAA
Today, LendInvest, a peer-to-peer platform that connects property buyers in the UK with people willing to finance those purchases (bypassing traditional mortgage lending infrastructure in the process), announced that it has raised around $39.5 million (around £30.5 million) in a Series C round of funding led by existing investor Atomico, which participation also from GP Bullhound and Tiger Management (founded by hedge fund investor Julian Robertson).
The plan will be to use this funding to continue to develop its technology and grow business into more the traditional (and bigger) mortgage business. A spokesperson for the company says there are no plans to extend beyond the UK market for now.
LendInvest Is Gearing Up To Be London’s Second Peer-To-Peer IPO (Forbes) Rated: A
Just weeks after Funding Circle launched its $2 billion IPO plans, London’s next peer-to-peer lender is gearing up to follow suit.
LendInvest, the online platform, which matches investors and institutions with borrowers looking for property finance, today announced a “pre-IPO” funding round of $39.5 million.
Since launching in 2008, LendInvest has facilitated over $1.9 billion in loans to buy, build or renovate some 5,000 homes across the U.K., turning a profit consecutively over the last four years.
With fresh capital raised from existing backer Atomico, along with new investors GP Bullhound and Tiger Management, its management seems to be signaling that they’re finally ready to float the business.
Zopa boosts target interest rates across all products (Peer2Peer Finance) Rated: AAA
ZOPA has boosted its lender returns in response to the recent Bank of England interest rate rise.
The peer-to-peer lender is now offering target returns of 4.5 per cent on its Core product and 5.2 per cent for its Plus account, both of which can be held in an Innovative Finance ISA (IFISA) wrapper.
Target returns were previously four per cent and 4.6 per cent respectively.
Church of England considers Wonga rescue (Charity Finance Week) Rated: A
The Church of England is considering bringing together a group of interested parties to buy the £400m loan book of collapsed company Wonga.
Payday loan company Wonga entered administration at the end of August, with Grant Thornton appointed to conduct an “orderly wind down” of the business and sale of assets.
In response to this announcement, Labour MP Frank Field wrote to the Archbishop of Canterbury Justin Welby, urging him to build a consortium of “people of good will” to buy the loan book “in a way which protects poorer people”.
Orca Money to Raise 500K via Equity Crowdfunding – Interview with CEO Iain Niblock (P2P Banking) Rated: A
Orca Money is currently running an equity crowdfunding campaign on Seedrs to raise 500K GBP at a premoney valuation of 1.7M GBP. Anybody can invest in Orca Money shares with a minimum investment amount of 10 GBP applicable. I interviewed the Orca CEO Iain Niblock
You are currently raising money. Who are you raising from and what do you plan to use the capital for?
Our investment is open to the public on the Seedrs equity crowdfunding platform. Investors across the EU can register and invest in the Orca business. The proceeds will allow us to expand our userbase, integrate with more lenders and to further develop the functionality of our platform.
Prior to launching the crowdfunding campaign, we secured a portion of this investment from two institutional funds based in Northern Ireland and a number of leading angel investors. It’s great to be combining these investors with crowd investors.
CTO on our doorstep: David Genn, CTO at Goji, on bridging the gap between the technology team and stakeholders (Information Age) Rated: A
When the regulator comes knocking, companies had better be ready. So it is with the peer-to-peer lending sector which was recently the subject of a 156-page review on the part of the Financial Conduct Authority (FCA) which has proposed a new set of rules for the still formative P2P lending sector.
The issues being addressed by the FCA are as much a technology challenge as they are a regulatory one, particularly when the companies involved are very young and the technology they are utilising is quite new and innovative.
Lenders flock to Scotland as P2P sector takes off (Peer 2 Peer Finance) Rated: A
SCOTLAND looks set to become a peer-to-peer lending hotspot despite fears about the potential impact of Brexit and another independence referendum.
This year has seen lenders such as Assetz Capitaland The House Crowd expanding their presence in the country, while professional services firms Pinsent Masons and Deloitte have formed partnerships with Fintech Scotland to drive the financial technology sector’s growth. LendingCrowd already has its headquarters in Edinburgh, as does ShareIn, which provides a white label crowdfunding technology solution.
Platform registers 94 mln online loans (CGTN) Rated: AAA
Online loans worth 116 billion yuan (16.97 billion US dollars) had been registered by the end of August on a unified platform operated by an industry association in China, amid a nationwide campaign to reduce financial risks.
The volume was up 18 percent from a month ago, the National Internet Finance Association (NIFA) has said.
The platform, established in June 2017 had recorded 94.31 million lending deals submitted by 66 online agents, which involved a total of 3.6 million borrowers.
Online registration starts for victims of illegal fundraising cases (Infosurhoy) Rated: A
China’s Ministry of Public Security has started registering investors of 50 illegal fundraising cases involving online peer-to-peer lending platforms to better protect their legitimate interests.
Investors of these platforms can register their information and obtain the latest development of related cases at http://ecidcwc.mps.gov.cn.
Public security authorities will ensure utmost transparency in their investigation and do their best to recover the losses of investors, an official with the ministry’s economic crime department said.
Registration will open for investors of more cases, the official added.
China UnionPay kicks off European expansion with UK launch (Financial Times) Rated: AAA
China UnionPay is the biggest payment card issuer in the world and is now launching their cards in the UK, the move will challenge Visa and MasterCard and is the first step in a planned European expansion. The company has struggled to compete with Alipay and WeChat Pay in China
Klarna Bank to acquire UK’s Close Brothers Retail Finance (Compelo) Rated: A
Payment provider Klarna Bank has agreed to acquire Close Brothers Retail Finance (CBRF) from UK merchant banking group Close Brothers Group for an undisclosed sum.
Klarna said that the acquisition of CBRF will enable the payments firm to expand its retail financing services for customers in the UK market.
Banks jump on to the fintech bandwagon (Financial Times) Rated: A
The Treasury Report on fintech released a few weeks ago talks about the promise of data sharing between big bank and technology. The author in the FT questions this enthusiasm, wondering if these tech companies can be trusted with financial data. The article points out that while the EU started allowing data sharing earlier this year it comes with several provisions to protect consumers.
Qatar Fund Is Near Investment in China’s Top Online Lender (Bloomberg) Rated: AAA
The Qatar Investment Authority is in advanced talks about an investment in Lufax, China’s biggest online lender, as the sovereign wealth fund seeks to tap into the world’s second-largest economy, people familiar with the matter said.
QIA has been negotiating the potential purchase of a minority stake in Lufax, which is an arm of China’s Ping An Insurance (Group) Co., according to the people. It could spend about $500 million to $1 billion, the people said, asking not to be identified because the matter is private.
A deal could be announced as soon as the next few weeks, the people said. Shanghai-based Lufax, which became profitable for the first time last year, completed a fundraising in 2016 that valued it at $18.5 billion.
What is happening in the IPO market? (Alpha Street) Rated: AAA
The IPO market is abuzz as usual, with many companies inching closer to public listing, while a few have backtracked from their plans. Let’s take a quick look at what you can expect in the coming days.
Cloud-based financial planning company Anaplan Inc. intends to raise up to $100 million through an IPO to meet the working capital and fund operations. The company has roped in former Tesla (TSLA) CAO David Morton as its CFO. It is currently working with an exchange to list the shares under the “PLAN” ticker. It was founded in 2006 as a cloud-based business planning and performance management platform based on a single hub.
Funding Circle Holdings is inching closer to a public listing as the company plans to raise gross proceeds of about 300 million pounds. Shares will be listed on the London Stock Exchange. Funding Circle is a small and medium enterprise loans platform with operations in the UK, US, Germany, and the Netherlands.
ASIC warns all fintech business lenders over contracts (AFR) Rated: AAA
The corporate regulator wants all online business lenders to remove unfair terms from their contracts just like Prospa has done, indicating start-ups that want to compete against banks will be held to similar regulatory standards as community expectations lift following the royal commission.
In a letter sent last week to Brad Kitschke, CEO of industry lobby group FinTech Australia, the Australian Securities and Investments Commission declared “action [is] required”.
One of these owners is Mel Flannagan, owner of software and design company Nook Studios. Flannagan’s work is project based and primarily with government departments, so cash flow needs to be managed carefully.
“Sometimes contracts just take a little bit of time to come through,” Flannagan says. But while Nook Studios is a unique business, she says their cash-flow situation is quite common, with the cyclical nature of waiting for invoices to be paid just being “the nature of having a small business”.
To ensure she had the funds to keep her business going, Flannagan didn’t even consider a traditional business loan because she knew she wouldn’t qualify.
Going international is nice on PowerPoint but difficult to execute, says Grab president Ming Maa (Deal Street Asia) Rated: AAA
“I suspect going international is a nice thing on PowerPoint, but the actual execution of that is very difficult,” Grab president Ming Maa said in a fireside chat at DEALSTREETASIA‘s Asia PE-VC Summit 2018 last week.
Drawing parallels with Meituan-Dianping’s tumultuous ride-sharing journey, Maa said, “We saw that Meituan spent somewhere around $500 million in two different cities in China. In that process, they spent a tremendous amount of capital on subsidies. What that tells me is – for a company to spend so much on subsidies means there are natural barriers to entry for this business.”
E-Commerce Platform KinerjaPay Launches P2P Lending Platform “KFUND” (Crowdfund Insider) Rated: A
KinerjaPay Corp., (OTCQB: KPAY), a digital payment and e-commerce platform, announced on the launch of its new peer-to-peer (P2P) lending platform, KFUND. According to Kinerjapay, PT. Kinerja Simpan Pinjam has been officially registered and will manage KFUND brand as an online lender that focuses on micro-lending activities.
Kinerjapay reported that KFUND will mainly target consumer sectors to provide micro-lending facilities in the range of $100 to $1,000 on biweekly or monthly term loans.
The Digital Transformation of Banking – Driving Constructive Economic Outcomes from the FinTech Ecosystem in Africa (Global Banking and Finance) Rated: AAA
The hugely successful events in our Finnovation Africa Series in Uganda, Ethiopia, Kenya and South Africa saw more than 800 thought leaders, FinTech pioneers and bankers representing the foremost financial institutions from across the continent gather to address how FinTech can contribute to the positive and profitable transformation of financial services in Africa. From banking powerhouses to start-up FinTech disruptors, Finnovation World sets the stage for the positive and profitable transformation of financial services –and Ethico Live! is now excited to announce the expansion of the conversation to Finnovation Ethiopia 2018for the 2nd year at the Radisson Blu Addis Ababa on the 1st of November 2018. The event will seek to harness the FinTech revolution to boost strategic economic priorities such as financial inclusion and deepening – and how FinTech can make a positive and profitable difference in Africa.
With a focus on the most significant technologies driving the financial services paradigm shift, including Blockchain & Cryptocurrencies, Open Banking & APIs, Payments innovation and Mobile Money, Finnovation Africa: Ethiopia 2018 also features a number of innovative sessions such as The Wolves’ Den, Sheba Valley: Harnessing Ethiopia’s FinTech boom, Inside the Investor’s Mind,and live-on-stage interviews with international Finnovators and African FinTech pioneers.