- Today’s main news: SoFi completes first rated pass-through certificates offering. Y Combinator backs Monzo for U.S. expansion. Funding Circle set for largest securitization. Dianrong shifts strategy. Funding Circle inks 50M Euro deal with Avida Finans. Open raises $30M.
- Today’s main analysis: Chance for recession is rising (A MUST-READ PeerIQ analysis).
- Today’s thought-provoking articles: How Kabbage’s CFO tackles his job. The Nordic fintech revolution. How decentralized finance provides an alternative to traditional lending.
- SoFi completes first rated pass-through certificates offering. SoFi continues to push the envelope on securitizations. The latest is SoFi Alternative Trust 2019-C.
- Y Combinator backs Monzo. With the support Monzo is getting, it’s sure to become a major U.S. competitor.
- The actual risk of a recession. Concerns over a recession are coming from many quarters of the economy, but some of the strongest voices are in the financial sector.
- How the Kabbage CFO uses his experience at Pillsbury, J. Crew to a unicorn. An excellent interview.
- Small business owners are ready for the next recession.
- H&M, Klarna partner in U.S.
- CrowdStreet provides direct investment opportunities.
- MassMutual, CommonBond partner on student debt.
- Ocrolus raises $24 million.
- Citizens Bank is rethinking mobile, online banking.
- Robo-advisors get political.
- Cross River acquires Seed.
- PayActiv documentary sheds light on earned wage access.
- Fintech MX gets $100 million to expand.
- Neighborhood Ventures closes on new investment property.
- Funding Circle set for largest securitization ever.
- Funding Circle stumbles.
- OakNorth completes 60 million GBP facility.
- Ray Harding to retire, continue volunteer work with P2P lender.
- Funding Circle strikes 50 million euro deal with Avida Finans.
- How decentralized finance is taking on traditional lending. This is an excellent read about some key players in decentralized lending.
- The Nordic fintech revolution. Who’s who in Nordic fintech.
- European Union is closer to new crowdfunding rules.
- India: Open raises $30 million. Congratulations!
- Singapore: Prime minister says country is studying virtual bank licenses.
- Australia: RateSetter joins Choice Aggregation Services.
- India: How open banking is disrupting traditional banking. And neo banks are gearing up for it.
- Australia: More on RateSetter.
- Indonesia: Koinworks raises $12 million.
- Australia: SME’s contribution to the economy.
- India: Government should look at alternative finance to solve MSME credit.
- Australia: Technology boosts financial literacy.
- Vietnam: P2P lending environment needs strong government action.
- India: Is fintech reeling under new challenges?
- Indonesia: Alami comes in second in Taqwatech Pitch.
- United States
- SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA
- Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA
- Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA
- How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA
- Small Business Owners Feel Ready for Next Recession (Business News Daily), Rated: A
- H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A
- This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A
- MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A
- Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A
- How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A
- Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A
- Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A
- “It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A
- Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B
- Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B
- United Kingdom
- Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA
- FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A
- OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A
- Ray Harding to retire as chief executive (Lynn News), Rated: B
- Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA
- Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A
- European Union
- A very Nordic fintech revolution (Pitchbook), Rated: AAA
- EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A
- Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA
- How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA
- P2P lender expands presence in third-party space (TheAdviser), Rated: AAA
- P2P lender joins aggregator panel (Broker News), Rated: A
- Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A
- Technology boosting financial literacy (Financial Review), Rated: A
- India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA
- Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A
- Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A
- Is fintech reeling under new challenges? (DNA India), Rated: A
- Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA
- KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A
- Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A
- INDONESIA’S ALAMI COMES IN SECOND IN THE TAQWATECH PITCH PIT (Digital News Asia), Rated: A
SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA
SoFi announced today that it completed a $200 million offering of post-graduate student loan asset-backed certificates issued by SoFi Alternative Trust 2019-C (SAT 2019-C). The Certificates are rated single-A by DBRS and mark the first rated pass-through certificate transaction issued by SoFi and the first publicly rated student loan pass-through transaction in the securitization market.
Unlike traditional student loan ABS transactions, SAT 2019-C does not use overcollateralization or bond subordination as forms of credit enhancement. The A rating assigned to the certificates by DBRS reflects the strong credit attributes of the borrowers. The portfolio has a weighted average credit score of 783 and a weighted average annual income of $175,746.
Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA
Leading US startup backer Y Combinator has become the latest high-profile backer of Monzo, on the eve of the bank’s American expansion.
Today Monzo confirmed it had raised £113m in a round led by Y Combinator’s Continuity fund, along with Latitude, General Catalyst, Stripe, Passion Capital and others.
Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA
Weak economic data continue – inflation expectations tumble, manufacturing has moved into recession, and the 10y/3m yield curve remains mildly inverted. Although the FOMC took no rate action this week, dovish signaling has led market participants to expect a 70% chance of 3 or more rate cuts in 2019.
CPI Since 1879 During Business Cycles
How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA
Scott Rosenberg: Kabbage represented a great opportunity for me to apply my prior experiences and help architect the future vision of a fast-growing company. Every role in my career has allowed me to lead or influence multiple divisions within a company, which makes my operational approach similar to that of a COO or General Manager. Beyond leading the CFO office in previous roles, I led Marketing at J. Crew, Operations at Pillsbury and most recently was the President of Purchasing Power. This broad vantage point lets me ensure financial growth as the CFO, but also identify opportunities to establish operational efficiencies more broadly across the organization. I take the same approach at Kabbage as I lead multiple disciplines, including Capital Markets and Legal. It encourages transparency across teams which allows us to move faster. With more than 175,000 customers accessing over $7.0 billion to-date, it’s an exciting role to drive hyper growth and deliver the best products and experiences for U.S. small businesses.
Small Business Owners Feel Ready for Next Recession (Business News Daily), Rated: A
According to a survey released today by Kabbage that polled more than 500 companies across multiple industries, 80% of American entrepreneurs said they felt confident in their readiness to weather another economic crisis.
H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A
H&M and Klarna announced that they have expanded their current partnership agreement to also include the US market, in the development of an unrivalled payments and shopping experience across touchpoints. Together, H&M and Klarna are aiming at further integrating H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.
This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A
CrowdStreet, which launched in 2014, is the leading player in the fast-growing field of online commercial real estate investing. The company’s online Marketplace allows individual investors to reap the rewards of investing in the $6 trillion commercial real estate sector, investing in everything from multifamily apartment buildings to self-storage facilities and senior-living centers.
The average return on the first 14 deals financed on CrowdStreet’s platform — those which have fully wrapped up, yielding final returns to investors — is 31.7%, with a 1.6x equity multiple and a holding period of two years.*
MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A
Total student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from passing financial milestones and saving for the future.
Massachusetts Mutual Life Insurance Company (MassMutual) has teamed up with CommonBond to offer a new student loan refinancing program through CommonBond with a rate advantage to help people take control of their student debt. This program – available online to all individuals with student debt today — is among the first of its kind in the student lending and insurance industries. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisors, currently 9,000 strong.
Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A
Ocrolus today announced $24M in Series B funding led by Oak HC/FT, a premier venture growth equity fund with deep fintech expertise. Ocrolus is powered by an elegant blend of artificial intelligence and crowdsourced human quality control, enabling firms across the financial sector to automate high-stakes business processes with precision. The company will use its new funding to automate underwriting workflows for lenders and banks, and expand into new verticals.
How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A
Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A
Forged in the wake of the financial crisis and political movements like Occupy Wall Street, digital advisory firms have become decidedly open about their political agendas. By advocating for the democratization of financial advice and stronger consumer protections, digital investment platforms have become the face of progressive politics in the market. That’s attractive to young investors — assets managed on digital platforms are expected to soar to $1.26 trillion by 2023, according to a report by Aite Group.
Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A
The $1.5 billion-asset bank agreed on Monday to buy Seed for an undisclosed amount. The 5-year-old fintech offers a mobile account for small businesses, complete with bill payment, remote deposit and an attached debit card.
“It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A
Today, PayActiv, Inc., the leader in employer-sponsored, holistic financial wellness service for employees, unveiled its documentary made in collaboration with Early Light Media and Roundtable Companies about the direct benefits of timely earned wage access. Now available at ItsAboutTimeTheFilm.com, the documentary, titled It’s About Time, looks at pay timing and its correlation with epidemic financial stress being experienced by millions of working Americans.
Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B
The data company MX is set to announce Tuesday an infusion of $100 million from a host of partners, including National Bank of Canada and Washington Federal.
Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B
Arizona’s first real estate crowdfunding company, Neighborhood Ventures, recently closed on its third investment property, an eight-unit apartment building in Old Town Scottsdale. Ninety Arizona residents invested a total of $550,000 into the purchase of the property, which will be renovated with a plan to operate it as an Airbnb.
Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA
DEUTSCHE Bank has unveiled more details on Funding Circle’s fourth securitisation, revealing it will be the highest-value package of loans it has offered so far.
The investment bank, which has been mandated as sole arranger and lead manager, said the deal will comprise 3,030 loans, with an aggregate balance of £244m and an average interest rate of 9.91 per cent.
FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A
London’s FTSE 250 fell 0.14% lower to 19,260.07 in afternoon trade on Wednesday, with Funding Circle leading the index lower.
The peer-to-peer lending marketplace was accompanied by fellow financial stocks, with Amigo Holdings, Charter Court Financial Services, Plus500 and Onesavings Bank all featuring among the top fallers.
OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A
Ray Harding to retire as chief executive (Lynn News), Rated: B
He said that in retirement he will continue to be a school governor, and that he intended to devote more time to the two charities he is involved with (the other one being Lendwithcare – peer to peer lending to entrepreneurs in a number of Third World countries).
Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA
Wu Yujian and Liu Jiefei Dianrong, one of China’s largest peer-to-peer (P2P) lending platforms, said it’s planning a shift in strategy to focus on cooperating with traditional financial institutions as China’s regulators continue to tighten their grip over the industry. The move was revealed on Thursday as the Shanghai-based company confirmed (link in Chinese) it had completed a new
Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A
An intermediate court in Beijing overseeing the Ezubo case said on Wednesday that victims could detail their cases to authorities at local registration sites between July 2 and Aug. 30.
A very Nordic fintech revolution (Pitchbook), Rated: AAA
Europe is a hotbed of activity when it comes to fintech investments, as the sector continues to mature. Year after year, billions of euros are plowed into promising startups, with last year seeing more than €2.8 billion raised across 438 deals, per the PitchBook Platform.
Below is a list of some of the most innovative fintech companies founded in the Nordics, together with noteworthy investments and backers.
EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A
European lawmakers floated new rules on Wednesday to make it easier for businesses and investors to ask the public to fund their projects, bringing the European Union a step closer to forging a common set of rules for national regulators overseeing crowdfunding.
Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA
Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.
How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA
DeFi lending startups are leveraging blockchain to shake-up the traditional money lending industry.
Digital Assets Kept as Collateral
Salt is one company which has been borne out of the cryptocurrency sector. Through its platform, digital assets are kept as collateral but returned upon repayment of the loan.
Automated P2P Lending Agreements on Blockchain
ETHLend is another DeFi platform built on top of the Ethereum network. It creates a means for lenders and borrowers from around the world to establish peer to peer lending agreements over blockchain.
Blockchain Catering to the Unbanked in Latin America
A completely different approach is being taken by startup, WeTrust.
When it comes to lending, users can establish a ‘lending circle’ on the platform.
P2P lender expands presence in third-party space (TheAdviser), Rated: AAA
Peer-to-peer lender RateSetter has announced its new partnership with Choice Aggregation Services (Choice), providing accredited brokers with access to the lender’s personal loan offerings.
P2P lender joins aggregator panel (Broker News), Rated: A
The partnership will make RateSetter’s unsecured personal loan product available to Choice Aggregation Service’s network of more than 1,600 brokers, in line with the trend towards servicing a more diverse array of client needs.
Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A
Prospa research has highlighted how lending to small business positively affects the economy through contributing to GDP and creating and supporting jobs.
Data released this week by accounting software firm Xero, analysed invoices from 150,000 Australian SMEs and concluded that 53% of trade credit invoices are paid late by big business suppliers and customers – on average 23 days after their due date. Squeezing SMEs, Xero calculates these late payments are worth $115bn.
Technology boosting financial literacy (Financial Review), Rated: A
Technology will need to play a bigger role in boosting the financial literacy of Australians as a large number of financial planners leave the profession, says Bronny Speed, financial advice leader at Chartered Accountants Australia New Zealand.
Speed says as increased educational and licensing standards for Australia’s 29,000 financial advisors will push some out of the market, it will leave a gap in the profession’s ability to provide financial advice and boost literacy.
India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA
Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.
Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A
In today’s age of digitisation, it is all about the customer and improving his/her experience. To achieve this goal, banks and fintech companies have to support each other. This change in the ecosystem has invented the concept of neo banking which can be rightly dubbed as the new era of the banking industry.
Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A
As Budget is about to come in few weeks, it’s time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.
While sharing the budget expectations, he said, ‘Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.
Is fintech reeling under new challenges? (DNA India), Rated: A
The super exciting fintech segment in the start-up ecosystem has been encountering a host of challenges in the recent past. Following a move by the Reserve Bank of India (RBI) to start a regulatory sandbox for the beta-testing of new fintech products in a controlled environment prior to their release, comes the issue of a liquidity crunch in the non-banking finance companies (NBFC) space.
- Over 1,300 new fintech ventures had cropped up in the sector between 2015 to 2018, according to a data
- Fintech is a broad sector. It is wrong to connect the NBFC crisis to the whole fintech space
- For a peer-to-peer (P2P) lending player who is dependent on retail investors for funding loans, maintaining trust is the key challenge
Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA
Singapore is actively studying whether to allow companies with no banking parentage to set up virtual banks, paving the way for start-ups like on-demand services operator Grab to potentially enter the formal financial services industry.
KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A
KoinWorks announced that it has raised $12 million in a Series B funding round. The round was co-led by EV Growth and Quona Capital, with participation from existing investors. The funding will be used to expand the KoinWorks team and partnerships, as well as further develop the company’s systems and technology.
Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A
The American Chamber of Commerce in Việt Nam (AmCham) expressed its desire for a highly standardised, transparent and stable business environment so all investors are treated equally.
Concerns were also raised by the Korea Chamber of Commerce in Việt Nam (Kocham) and the Japanese Chamber of Commerce and Industry in Việt Nam (JCCI).
The limit of foreign ownership in local financial firms has also prevented fintech and P2P firms from calling for foreign capital, making them unable to hire talent and keeping their businesses less competitive.
INDONESIA’S ALAMI COMES IN SECOND IN THE TAQWATECH PITCH PIT (Digital News Asia), Rated: A
PT ALAMI Fintek Sharia (Alami) came in as the runner-up position in the TaqwaTech Pitch Pit organised by Gobi Partners Venture Capital.
Three companies from Indonesia qualified for the top ten, namely Alami, as well as two marketplace startups for pilgrimage services PergiUmroh.com and Umroh.com.