- Today’s main news: Kabbage secures $200M. Funding Circle plummets 20%. Zopa to raise 200M GBP pre-IPO. RateSetter Isa attracts over 250M GBP in subscriptions. OakNorth doubles staff. Funding Societies tied up in SME financing.
- Today’s main analysis: Recession talk, global easing, and SoFi rated pass-thru innovation.
- Today’s thought-provoking articles: 10 years of marketplace lending investing. Is Funding Circle a barometer for Brexit opinions? China’s credit card debt sees breakneck growth. International P2P lending volumes.
- Kabbage nabs $200 million in funding. Congratulations!
- Recession talk, global easing, and SoFi rated pass-thru innovation. Talk of recession is picking up speed.
- Ten years of MPL investing. A great analysis of the last 10 years from Peter Renton at Lending Academy.
- Home affordability in the original 13 colonies. From LendingTree.
- Embracing the digital lending revolution.
- Direct Lending funds raise concerns.
- Capital One closes branches.
- Policing the Internet is critical to protecting online lending consumers.
- How Brex secured $860 million.
- Provident Financial partners with Fundation.
- Funding Circle plummets 20 percent. The most interesting news this week is out of the UK, as Americans spent the week celebrating their independence from Great Britain.
- Funding Circle bins the boasts as Brexit bites.
- Is Funding Circle a Brexit barometer?
- Fintech’s big bang.
- Zopa to raise $200 million GBP ahead of bank launch, IPO.
- RateSetter Isa attracts over 250 million GBP in subscriptions.
- OakNorth doubles staff.
- Moneybox partners with OakNorth.
- FIBA to publish lender default rates.
- Growth Street runs past 500 million GBP in matched loans.
- LendingCrowd partners with Brismo.
- Purplebricks to retreat from U.S.
- P2P lenders aren’t doing enough to protect investors.
- Lendingblock partners with Caspian.
- International P2P lending volumes for June 2019.
- Generic to launch tokenized P2P lending platform.
- More than half of consumers are regular users of fintech.
- Funding Societies tied up in SME financing.
- India: Union Budget 2019 expectations.
- P2P lending hopes for policy changes.
- Helios P2P secures second round of funding.
- P2P lending is a model for many small businesses.
- Visa Indonesia opens applications for innovation competition.
- China: Breakneck growth in credit card debt.
- Germany: Creditshelf doubles loan volume in first half of 2019.
- Australia: Loans.com.au passes on full rate cut.
- Canada: Bank of Montreal launches digital-only line of credit.
- China: The rashness of expecting stock market booms.
- Ireland: PropertyBridges attracts first tranche of P2P loans housing project.
- China: Regulators curb market irregularities.
- United States
- Kabbage secures $200M to fuel its AI-based loans platform for small businesses (Tech Crunch) Rated: AAA
- Recession Talk and Global Easing; SoFi Rated Pass-Thru Innovation (PeerIQ), Rated: AAA
- Ten Years of Investing in Marketplace Lending (Lending Academy) Rated: AAA
- Home Affordability in the “13 Original Colonies” (DS News) Rated: A
- Embracing The Digital Lending Revolution (Monja Blog) Rated: A
- Direct Lending Funds Raise Cash and Concerns (Bloomberg) Rated: A
- Capital One keeps closing branches, even as rivals open them (American Banker) Rated: A
- Policing The Internet Is Critical To Protecting Online Lending Consumers (Forbes) Rated: A
- How Two College Dropouts Made $ 860 Million by the Time They Were 23 (Fortune) Rated: A
- A ‘turtle bank’ plays catch-up in small-business lending (American Banker) Rated: B
- United Kingdom
- Funding Circle shocks the City, plummeting 20% after slashing growth forecasts thanks to Brexit (Evening Standard) Rated: AAA
- Funding Circle bins the boasts as Brexit bites (Brinkwire) Rated: A
- Companies & Markets show: Fintech’s big bang (Investors Chronicle) Rated: A
- Is Funding Circle the barometer for SME opinions on Brexit? (Daily Fintech) Rated: AAA
- Zopa plans £200m fundraise ahead of bank launch and IPO (P2P Finance) Rated: AAA
- RateSetter’s Isa attracts more than £250m in subscriptions (Bridging & Commercial) Rated: AAA
- FINTECH UNICORN OAKNORTH DOUBLES STAFF (Business Cloud) Rated: AAA
- Moneybox launches ISA partnership with OakNorth Bank (AltFi News) Rated: A
- FIBA to publish default rates of lenders (Bridging & Commercial) Rated: A
- Growth Street rockets past £500m of matched loans (Business Love London) Rated: A
- LendingCrowd partners with Brismo for verified returns data (Fintech Finance) Rated: A
- Purplebricks $ 5m US retreat shows startups need to slow down (Sifted) Rated: A
- The peer-to-peer industry isn’t doing enough to protect investors (City AM) Rated: A
- Lendingblock partners with institutional crypto platform Caspian (Institutional Asset Manager), Rated: B
- Breakneck growth in China’s credit-card debt since 2012 raises worries about a potential bust (South China Morning Post) Rated: AAA
- It is rash to expect a rerun of past stock market booms in China (Financial Times) Rated: A
- Regulators curb market irregularities (Ecna) Rated: A
- European Union
- Fintech Lender creditshelf Doubles Loan Volume in First Half of 2019 (Crowdfund Insider) Rated: AAA
- PropertyBridges attracts first tranche of peer-to-peer loans for Limerick housing project in record time (Irish Examiner) Rated: A
- International P2P Lending Volumes June 2019 (P2P Banking) Rated: AAA
- Generic Looks to Launch Tokenized Peer to Peer Lending Platform (Crowdfund Insider) Rated: A
- FinTech is ‘new normal’ as majority are regular users (FS Tech) Rated: B
- Loans.com.au passes on the full rate cut, now offers mortgage rates as low as 3.03% (Mozo) Rated: AAA
- Expectations of the Fintech Industry From the Union Budget of 2019 (Entrepreneur) Rated: AAA
- ‘P2P model is a solution for many small businesses’ (Deccan Herald) Rated: A
- BMO LAUNCHES DIGITAL-ONLY LINE OF CREDIT SERVICE (Betakit) Rated: AAA
- Funding Societies in SME Financing Tie-Up (Finews) Rated: AAA
- Helios P2P Sri Lanka’s First Peer-To-Peer Lending Platform Secures Second Round Funding (Daily Mirror) Rated: A
- Budget Expectations 2019: P2P lending hopes for these policy changes (Banking & Finance) Rated: A
- Visa Indonesia opens applications for fintech innovation competition (Jakarta Post) Rated: B
Kabbage secures 0M to fuel its AI-based loans platform for small businesses (Tech Crunch) Rated: AAA
Kabbage, the AI-based small business loans platform backed by SoftBank and others, is adding more firepower to its lending machine: the Atlanta-based startup has secured an additional $200 million in the form of a revolving credit facility from an unnamed subsidiary of a large life insurance company, managed and administered by 20 Gates Management, and Atalaya Capital Management.
The money comes on the heels of a $700 million securitization Kabbage secured just three months ago and it is notable not just for its size but its terms: it’s a four-year facility, a length of time that underscores a level of confidence in the company’s performance.
Recession Talk and Global Easing; SoFi Rated Pass-Thru Innovation (PeerIQ), Rated: AAA
In FinTech financing news, Ocrolus, led by CEO Sam Bobley, successfully raised $24 million in their Series B led by Oak HC/FT.
SoFi Pass Thru Security
SoFi this week secured a provisional A-rating from DBRS on a $200 MM pass-thru security consisting of student refi loans [ PSR and announcement ]. Notably, the structure is the first CUSIP that does not rely on over-collateralization or subordination to provide credit enhancement for investors. This is a promising innovation from the first FinTech to crack open the securitization market for student refi loans.
Ten Years of Investing in Marketplace Lending (Lending Academy) Rated: AAA
This month marks ten years since I made my first investment in what was then called peer to peer lending.
Ten Ways Marketplace Lending Has Changed Since 2009
- The Rise of Institutional Investors
- The Rise of Automation
Home Affordability in the “13 Original Colonies” (DS News) Rated: A
To celebrate the Fourth of July, LendingTree, the nation’s largest online loan marketplace, has taken a look at the states that were present at the birth of the country,” said LendingTree Chief Economist Tendayi Kapfidze.
New Hampshire is the most affordable of the original 13 states, with a median home value of $244,900 and a median salary of $71,305. New Hampshire capital Concord is also the most affordable capital, with a median home value of $212,600, and a median salary of $61,310.
The least affordable state is New York, with a median home value of $293,000, which is less than Massachuset’s median value of $352,600, but New York’s median income is slightly less, at $62,765, plus an affordability surplus of just $292.
Embracing The Digital Lending Revolution (Monja Blog) Rated: A
A recent report by McKinsey & Company pointed out that in the traditional lending process of most banks, the “time to decision” for small business loans is usually from three to five weeks, while the “time to cash” can take up to three months. Personal loans usually have shorter processing times but still, take days or even weeks.
Digital lending helps banks retain individual and business customers by making the process more convenient and faster. According to an extensive survey by the American Bankers Association in 2018, an overwhelming majority of banks agree that some level of digitalization is vital to keeping their loan customers from going elsewhere.
Direct Lending Funds Raise Cash and Concerns (Bloomberg) Rated: A
Funds raised for direct lending hit a fresh high this year, raising concerns the market could be running a little hot amid the deluge.
Capital One keeps closing branches, even as rivals open them (American Banker) Rated: A
The McLean, Va., company, with roughly $373 billion of assets, has shuttered more than half of its branches over the past decade, including nearly 50 in the second quarter alone, according to a recent analysis by Sandler O’Neill & Partners. It now has fewer than 500 branches in eight states and the District of Columbia.
Policing The Internet Is Critical To Protecting Online Lending Consumers (Forbes) Rated: A
In May, the United States Federal Reserve issued its “Report on the Economic Well-Being of U.S. Households in 2018.” Once again, one of the big takeaways in this year’s version is that almost 40% of Americans would struggle to pay a $400 emergency expense.
This population doesn’t have access to cash, savings or credit cards paid off at the next statement. When they have to come up with funds to cover unexpected needs, they turn to alternative sources of credit, like the online lending industry, of which my organization is part. TransUnion’s “Q4 2018 Industry Insights Report” found that these types of loans went from 5% of all outstanding loan balances in 2013 to 38% of the market in 2018, and the pace is still accelerating.
How Two College Dropouts Made $ 860 Million by the Time They Were 23 (Fortune) Rated: A
They are the founders and top executives of Brex Inc. a fintech startup recently valued at $2.6 billion, with an unlikely origin story.
Brex, which launched its first product last year, has become a fintech darling, catapulting its founders into the ranks of the richest entrepreneurs — on paper at least. Today their stakes in the company are worth an estimated $430 million each, according to an analysis by EquityZen, a marketplace for shares of tech firms that haven’t yet gone public.
A ‘turtle bank’ plays catch-up in small-business lending (American Banker) Rated: B
Provident Financial in Iselin, N.J., has partnered with a fintech to become a stronger small-business lender.
The $9.8 billion-asset company is working with Fundation to offer unsecured small-dollar loans to commercial clients. While available in Provident’s more than 80 branches, applications for loans as big as $250,000 are also being accepted online.
Funding Circle shocks the City, plummeting 20% after slashing growth forecasts thanks to Brexit (Evening Standard) Rated: AAA
The FTSE 250 company now expects 20% revenue growth this year, half its previous guidance of 40%, amid slumping demand for loans from small businesses.
The latest miserable update sent its shares down 20%, or 34p, to 129.6p and piles more pain on investors after a torrid nine months on the stock market. Since going public the shares have fallen 70% amid wider concerns about the peer-to-peer lending model.
Funding Circle bins the boasts as Brexit bites (Brinkwire) Rated: A
Few businesses, even fintech operators with smart kit and a big marketing budget, can sustain that pace, but Funding Circle still reckoned 40% was on the cards this year.
Companies & Markets show: Fintech’s big bang (Investors Chronicle) Rated: A
Digital editor Graeme Davies in discussion with James Norrington and Alex Newman on the latest problems for Funding Circle, Jupiter’s fund manager departure and the massive opportunities in the fin tech space both now and in the future.
Is Funding Circle the barometer for SME opinions on Brexit? (Daily Fintech) Rated: AAA
Loans under management on the platform are up 37% for the first half of 2019 compared to the same period in 2018, currently sitting at £3.5 billion. Originations are up 14% on the prior corresponding period, at £1.2 billion. All healthy figures in their own right.
A separate study by academics at St Andrew’s University found that in 2016, 25% of businesses viewed Brexit as a major obstacle to their success. This number had jumped from 16% in the year prior, when they were surveyed right after the referendum.
Zopa plans £200m fundraise ahead of bank launch and IPO (P2P Finance) Rated: AAA
ZOPA is reportedly looking to raise up to £200m as it gears up for its bank launch and a possible stockmarket flotation.
The peer-to-peer consumer lender is in talks with private equity firms and sovereign wealth funds about the fresh funding, which could be secured in the next few months, chief executive Jaidev Janardana (pictured) told Bloomberg.
RateSetter’s Isa attracts more than £250m in subscriptions (Bridging & Commercial) Rated: AAA
The P2P lender’s RateSetter Isa — which was launched in February 2018 — received £50m of Isa inflows in the last three months alone.
More than 600,000 customers have used RateSetter to invest or borrow and it has originated £3.3bn of loans, which has generated over £135m in returns for investors to date.
FINTECH UNICORN OAKNORTH DOUBLES STAFF (Business Cloud) Rated: AAA
Challenger bank OakNorth has doubled its staff after securing more than $1 billion in funding.
The London-based unicorn has also signed a five-year deal to provide its technology platform, OakNorth Analytical Intelligence, to Dutch lender NIBC Bank.
With a valuation of $2.8bn, it has rapidly grown to become one of Europe’s most valuable companies, having raised more than $1bn, a record for a European FinTech, from the likes of Japan’s SoftBank Group.
Moneybox launches ISA partnership with OakNorth Bank (AltFi News) Rated: A
OakNorth’s growing role as the go-to ISA partner to the digital disruptors of UK fintech has been further cemented. The bank, which was briefly Europe’s most valuable fintech earlier this year, has today joined forces with Moneybox to offer the latter’s 200k-strong, and growing, user base a Cash Lifetime ISA.
The Moneybox Cash Lifetime ISA, with an interest rate of 1.4 per cent, is designed to help customers who are saving for their first home with its government-backed 25 per cent bonus up to £1,000 per year. Users can open an account with £1.
Nutmeg is another fintech offering the Lifetime ISA while, Skipton – the UK’s fourth largest building society – says it has had over 130,000 accounts opened to date.
OakNorth also powered tax-wrapped savings accounts for Monzo’s c.2m customers in March, although they were not Lifetime ISAs. OakNorth reported a 220 per cent increase in profits last year to £33.9m.
FIBA to publish default rates of lenders (Bridging & Commercial) Rated: A
Adam Tyler, executive chairman at FIBA, said the move followed concerns about the transparency of default rates in the industry, which was raised by members and lender partners.
Mark Posniak, managing director at Octane Capital, initiated the conversation about default interest last week via LinkedIn.
Growth Street rockets past £500m of matched loans (Business Love London) Rated: A
Growth Street, which is reinventing the business overdraft, has hit a big milestones in June. It has now matched over £500m worth of investor funds on its platform since launch in 2014.
LendingCrowd partners with Brismo for verified returns data (Fintech Finance) Rated: A
LendingCrowd, Scotland’s only fintech lending platform, has today announced that it is the latest leading marketplace to partner with Brismo to provide sophisticated and independently verified performance metrics for investors.
Brismo is a London-based provider of lending performance data that uses detailed loan information to analyse and verify returns, allowing investors to perform like-for-like analysis.
Purplebricks $ 5m US retreat shows startups need to slow down (Sifted) Rated: A
Britain’s online estate agent Purplebricks this week said it would pull out of the US to focus on its hometurf.
The peer-to-peer industry isn’t doing enough to protect investors (City AM) Rated: A
Many peer-to-peer lenders target unsophisticated retail investors, who can invest as little as £100. And yet, there is a relatively high cost to on-board small investors, because platforms have to handle customer calls, and anti-money laundering requirements.
There have been dozens of failures, but the closure of Lendy has shocked the industry. The high-profile peer-to-peer lender accrued more than £160m on its loan book, and by the time the administrators were called, £90m was believed to be in default.
Lendingblock partners with institutional crypto platform Caspian (Institutional Asset Manager), Rated: B
Lendingblock, a regulated, open exchange for institutional borrowing and lending of digital assets, has partnered with Caspian, the institutional crypto trading platform.
This partnership enables essential market infrastructure for borrowing and lending digital assets to be scaled to institutions globally.
Breakneck growth in China’s credit-card debt since 2012 raises worries about a potential bust (South China Morning Post) Rated: AAA
Credit-card debt has grown more than sixfold in China since 2012, mirroring booms in other Asian markets that ended badly and raising concerns about the potential risks to Chinese banks, according to a new report from S&P Global Ratings.
The credit rating agency said that unsecured consumer lending in the mainland is expected to increase at a rate of 20 per cent annually for the next two years, a slight slowdown, but reminiscent of problematic booms in Hong Kong, South Korea and Taiwan.
It is rash to expect a rerun of past stock market booms in China (Financial Times) Rated: A
One way to profit from Chinese equities is to play a familiar paradox. Market participants know that when economic growth ebbs significantly, Shanghai share prices tend to rally.
The key to this incongruity might be called the “Communist party put”. In the same way that Alan Greenspan, former chairman of the US Federal Reserve, used to relax US monetary policy when dynamism stalled, a tactic known as the “Greenspan put”, China’s ruling party often steps in when commerce starts to wilt.
Regulators curb market irregularities (Ecna) Rated: A
China has spared no efforts to carry out supply-side reform and fight against financial market irregularities by better regulating high-risk institutions to make overall risk manageable, officials of the China Banking and Insurance Regulatory Commission said on Thursday.
In the past two years, China reduced high-risk assets worth 13.74 trillion yuan ($2 trillion), restraining the flow of resources from the real economy — the part of the economy that produces goods and services — to the virtual economy, said Zhou Liang, vice-chairman of the CBIRC, at a news conference.
Fintech Lender creditshelf Doubles Loan Volume in First Half of 2019 (Crowdfund Insider) Rated: AAA
creditshelf Aktiengesellschaft, a Germany based online lender, says it lending volume has more than doubled in volume during the first 6 months of 2019. In comparing the first half of 2019 versus the first six months of 2018, creditshelf reports that the volume of arranged loans was € 35.8 million or 132 % higher year-on-year (prior at € 15.4 million).
June 2019 was the strongest month in creditshelf’s history with arranged loans of € 12.2 million.
The company says the pipeline for the second half of the year is well filled.
PropertyBridges attracts first tranche of peer-to-peer loans for Limerick housing project in record time (Irish Examiner) Rated: A
A project to develop 16 houses in Pallaskenry, Co Limerick, is well on track to raise the €2.4m in funding that it pitched out to peer-to-peer investors just a few weeks ago, having very quickly raised the first tranche of €665,000.
PropertyBridges.com, who are leading the financial management of the project, will raise the remainder in three further tranches when the development progresses over the next 12 months.
International P2P Lending Volumes June 2019 (P2P Banking) Rated: AAA
Arboribus is listed for the last time, as the platform will cease to originate new loans.
Generic Looks to Launch Tokenized Peer to Peer Lending Platform (Crowdfund Insider) Rated: A
Blockchain startup Generic wants to create a tokenized bridge for peer to peer lending/merchant cash advanced credit, according to a note from the company. While not live yet, Generic claims it will “create a direct bridge between users and companies looking for funds, without an intermediary.”
FinTech is ‘new normal’ as majority are regular users (FS Tech) Rated: B
A global survey of 883 consumers from the UK, Europe, Asia, Africa, Latin America and Australasia, by financial advisory company deVere Group found that 55 per cent were using FinTech services online or via mobile on a regular basis to access and manage their money.
Loans.com.au passes on the full rate cut, now offers mortgage rates as low as 3.03% (Mozo) Rated: AAA
This afternoon, however, loans.com.au will be bucking the trend. The online lender announced it will be passing on the cut in full to its variable home loan customers, effective immediately.
The changes will apply to both new and existing customers, and will see owner occupiers looking at rates as low as 3.03% (3.05% p.a. comparison rate*) – among the more impressive on the market. Below, we’ve compiled some stellar loans.com.au home loans for you to check out.
Expectations of the Fintech Industry From the Union Budget of 2019 (Entrepreneur) Rated: AAA
The online lending industry has emerged as a massive relief for both individuals and small businesses that have historically been facing a lack of funds and were rendered underserved by traditional financial institutions. But for the digital model to truly thrive, fintech lenders need to have ready access to the credit guarantee schemes being initiated by the government to build a supportive financial structure. For instance, recent government initiatives like that of SIDBI wherein loans can be provided in under an hour, or its subsidiary MUDRA have only been supporting banks, NBFCs, and micro-finance institutions. But their penetration levels are relatively low, because of which a substantial portion of these funds remain unutilized. Therefore, the fintech industry expects the government to extend credit and allow the players to participate in these recent initiatives and other measures being undertaken.
‘P2P model is a solution for many small businesses’ (Deccan Herald) Rated: A
P2P model is a solution for many small businesses that are struggling for funds. Digital lending has changed the face of many developing countries’ economies because of the transparent environment and paperless approvals.
So, from the perspective of Peer-to-Peer (P2P) industry in India, it has tremendous opportunities because this industry is still at a nascent stage and requires encouragement through tax benefits.
BMO LAUNCHES DIGITAL-ONLY LINE OF CREDIT SERVICE (Betakit) Rated: AAA
Bank of Montreal is launching a new digital-only lending solution, allowing customers to apply for a personal line of credit directly from their mobile devices.
Through the new solution, BMO said customers can apply for credit by taking a short application, receiving a decision on their loan within minutes. Customers will get a real-time decision on their application, as well as faster access to credit, allowing them to tap into their loans within 48 hours of approval.
Funding Societies in SME Financing Tie-Up (Finews) Rated: AAA
Funding Societies has entered into a partnership with Lazada Malaysia to offers merchants on the e-commerce marketplace short-term financing, Malaysian newspaper «The Star» reported on Thursday.
As part of the tie-up, the peer-to-peer lending platform will leverage alternative data from Lazada as part of its risk assessment, which will provide more opportunities for online businesses to get tailor-made financing products conveniently, the firm said in a joint press statement.
Helios P2P Sri Lanka’s First Peer-To-Peer Lending Platform Secures Second Round Funding (Daily Mirror) Rated: A
Helios P2P – Sri Lanka’s First Peer-To-Peer Lending Platform secured their second round of funding from John Keells X which is the corporate accelerator of John Keells Holdings PLC. Helios P2P were winners of the 2017 John Keells X accelerator programme and the first startup to receive funding for the second stage of the accelerator.
The peer-to –peer lending industry, valued globally at $64 billion in 2015, is growing at a compound annual growth rate of approximately 50%.
Budget Expectations 2019: P2P lending hopes for these policy changes (Banking & Finance) Rated: A
So what will it be – fiscal consolidation or a focus on growth? Getting the balance right is the key here. The top priority according to Abhishek Gandhi, Co-Founder & CFO, RupeeCircle from this budget is to tackle consumption slowdown and boost it by cutting taxes which will increase the spending power of the people, especially in rural areas and the lower income groups. The subliminal effect of this step will boost investments as well. This will especially be a shot in the arm for the Peer-to-peer (P2P) the lending landscape which has been affected by the sluggish pace of policy changes in the past several months (understandably due to the impending general elections of 2019).
Visa Indonesia opens applications for fintech innovation competition (Jakarta Post) Rated: B
Visa Indonesia, a subsidiary of California-based payment systems provider Visa, opened on Wednesday applications for its Visa Everywhere Initiative competition, which is designed to crowdsource financial inclusion solutions from local financial technology (fintech) start-ups.