- Today’s main news: Zopa launches tool to compete with credit bureaus. KBRA assigns preliminary ratings to Marlette Funding Trust 2019-4. OnDeck Capital financial results. ID Finance raises 1.7M euro on Crowdcube in minutes. Canada’s fintech adoption rate has doubled since 2017.
- Today’s main analysis: LendingClub account performance (A MUST-READ). LendingTree’s Personal Loan Offers Report for September 2019.
- Today’s thought-provoking articles: Upgrade’s card, global cooling. LendingTree’s Personal Loan Offers Report for September 2019. This is the best time to consolidate credit card debt. How the rise of fintech weakens lending discrimination laws. Interview with RateSetter’s chief investment officer. European fintech exits.
- KBRA assigns preliminary ratings to Marlette Funding Trust 2019-4. Marlette Funding is becoming a powerhouse in marketplace lending securitizations.
- OnDeck Capital financial results. Analyze compares them to Consumer Porfolio Services.
- Upgrade card, global cooling. A PeerIQ analysis.
- LendingClub account performance. From Lend Academy. A must-read.
- Personal Loan Offers Report – September 2019. From LendingTree. Outstanding analysis, as usual.
- There’s never been a better time to consolidate credit card debt. From Credible.
- Lendio has made more than 10,000 loans on Kiva. Congratulations! That’s awesome.
- The rise of fintech has weakened lending discrimination laws. Worth a read.
- Apple, Goldman not reporting Apple Card info to credit bureaus.
- Goldman CEO says Apple Card is most successful card launch ever.
- CNB Bank partners with nCino for retail lending.
- California’s consumer loan interest rates reform.
- DrawBridge Lending CEO discusses risk, compliance for lending to Bitcoin holders.
- There are more than 600,000 millennial millionaires in the U.S.
- Pros and cons of using P2P lending for real estate.
- What to watch for in REIT earnings. A Seeking Alpha analysis.
- Finicity partners with American Financial Services on mortgages.
- Roofstock hires new chief product officer.
- LenderClose gets new director of operations.
- Zopa launches credit rating tool. Called Borrowing Power, this is a great idea that competes directly with the credit bureaus.
- Interview with RateSetter’s chief investment officer.
- Samsung, Klarna partner on pay later plans.
- Is Klarna a good deal for students?
- Octopus Choice’s P2P loans are now available within a SIPP.
- Will banks become redundant?
- Starling launches TV ad campaign.
- Celsius Network offers up to 10% return on TrueUSD lending.
- OakNorth Bank loans 650,000 GBP to family restaurant in Liverpool.
- ID Finance raise 1.7 million euros on Crowdcube within minutes. Congratulations!
- Fintech exits has secured 83 billion euros since 2013. This is an excellent read.
- P2P lending marketplaces that accept American investors.
- Europe’s top tech startups. Some you know, some you don’t.
- Nigerian SME lender Lidya expands into Europe.
- Canada: Fintech adoption doubles since 2017. Outstanding!
- Singapore: Investors pour record $735 million into fintech.
- China: PayPal buys majority stake in GoPay. Not related to lending, but this is big news.
- India: Neobanks can potentially harm SME lending.
- International: Divido partner with Splitit on POS financing.
- Sweden: Klarna can be used as an online bank for gaming.
- Bahrain: Beehive funds first SME.
- India: How Crif’s Astrideb Basu scaled data and analytics.
- United States
- KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2019-4 (Business Wire), Rated: AAA
- On Deck Capital Inc. Financial Results Comparing With Consumer Portfolio Services Inc. (Mesa Weekly), Rated: AAA
- Global cooling; Upgrade Card (PeerIQ), Rated: AAA
- New LendingClub Account Performance (Lend Academy), Rated: AAA
- Personal Loan Offers Report – September 2019 (LendingTree), Rated: AAA
- Kiva Lending Team: Lendio Gives (Kiva), Rated: A
- There’s Never Been a Better Time to Consolidate Credit Card Debt (Credible), Rated: AAA
- Apple and Goldman Sachs aren’t reporting Apple Card information to credit bureaus (MarketWatch), Rated: A
- Goldman Sachs CEO says Apple Card is the most successful credit card launch ever (CNBC), Rated: B
- Rise of fintech weakens law to prevent lending discrimination (Roll Call), Rated: AAA
- CNB Bank Moves to Revolutionize its Retail Lending with nCino (PR Newswire), Rated: A
- California has reformed consumer loan interest rates. But will lenders find loopholes? (Cal Matters), Rated: A
- DrawBridge Lending CEO Discusses Risk and Compliance for Lending Capital to Bitcoin Holders (Crowdfund Insider), Rated: A
- There are more than 600,000 millennial millionaires in the US, according to report (CNBC), Rated: A
- The Pros and Cons of Using Peer-to-Peer Lending When Investing in Real Estate (The Motley Fool), Rated: A
- Real Estate Earnings: What To Watch For This Quarter (Seeking Alpha), Rated: A
- AMERICAN FINANCIAL RESOURCES AND FINICITY PARTNER TO SIMPLIFY THE MORTGAGE EXPERIENCE (Finicity), Rated: B
- Roofstock Accelerates Innovation with New Chief Product Officer at the Helm (Yahoo! Finance), Rated: B
- Director of Operations Joins Fintech Startup LenderClose (DS News), Rated: B
- United Kingdom
- Zopa launches tool to dispel “mystery” of credit worthiness (AltFi), Rated: AAA
- In the Spotlight with Mario Lupori, RateSetter (Financial Reporter), Rated: AAA
- Samsung.com partners with Klarna to offer pay later payment plans (IBS Intelligence), Rated: A
- Klarna: too good to be true for students? (Mancunion), Rated: A
- Octopus Choice’s P2P loans now available within a SIPP (AltFi), Rated: A
- Could banks become redundant in the future? (Finextra), Rated: A
- Starling launches TV ad campaign after reaching 900,000 customers (AltFi), Rated: A
- Celsius Now Offers up to 10% Return on TrueUSD Lending Service (Finance Magnates), Rated: A
- Casa Italia to expand its restaurant in Liverpool following £650k loan from OakNorth Bank (Fintech Finance), Rated: B
- PayPal wants to help Chinese online shoppers buy from overseas (Business Telegraph), Rated: AAA
- European Union
- Barcelona-based fintech ID Finance secures €1.7 million within minutes on Crowdcube (EU-Startups), Rated: AAA
- Fintech exits have raked in €83bn since 2013 amid European funding boom (sifted), Rated: AAA
- Which P2P Lending Marketplaces in Europe Accept American Investors? (P2P-Banking), Rated: A
- Europe’s top tech startups to know (sifted), Rated: A
- Nigerian SME Digital Lender Lidya Expands to Europe (Forbes), Rated: A
- London-based finance platform Divido inks deal with US payment company Splitit offering point-of-sale finance (AltFi), Rated: A
- 4+ INTERNET BANKING OPTIONS FOR GAMING (One Vale Fan), Rated: B
- How Can Neobanks Potentially Transform SME Lending? (Inc42), Rated: AAA
- IN CONVERSATION WITH CRIF’S ATRIDEB BASU & HOW HE SCALED DATA & ANALYTICS PRACTICE IN INDIA (Analytics India Mag), Rated: A
- Investors Pour Record $ 735 Million Into Singapore Fintech Deals (Bloomberg), Rated: AAA
- Region’s P2P lending platform Beehive funds first SME in Bahrain (Statup MGZN), Rated: A
- Canada’s FinTech adoption rate more than doubled since 2017 (Yahoo! Finance), Rated: AAA
On Deck Capital Inc. Financial Results Comparing With Consumer Portfolio Services Inc. (Mesa Weekly), Rated: AAA
On Deck Capital Inc.’s volatility measures that it’s 85.00% more volatile than S&P 500 due to its 1.85 beta. Consumer Portfolio Services Inc. on the other hand, has 1.53 beta which makes it 53.00% more volatile compared to S&P 500.
Earnings & Valuation
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|On Deck Capital Inc.||3||0.12||45.93M||0.45||7.99|
|Consumer Portfolio Services Inc.||4||0.55||13.97M||0.50||7.37|
|Net Margins||Return on Equity||Return on Assets|
|On Deck Capital Inc.||1,349,850,114.62%||12.2%||3.1%|
|Consumer Portfolio Services Inc.||396,042,410.84%||7.6%||0.6%|
Global cooling; Upgrade Card (PeerIQ), Rated: AAA
In industry news, Upgrade led by CEO Renaud Laplanche released the “Upgrade Card”. The product is a cross between credit card and an installment loan. How does it work? Every month any new charges on the card transition into an installment loan of 12, 24, or 36 months. Customers can select the default payback period when applying for the card and they have the option to change the term for new charges at any time. Upgrade Card offers true risk-based pricing with a range of 6.49% to 29.99%. LendIt Co-Founder Peter Renton has a nice summary here.
In macro news, the Fed is expected to cut rates for a third time later this month to a range of 1.5% to 1.75%.
New LendingClub Account Performance (Lend Academy), Rated: AAA
In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:
- How to Open Up a New LendingClub Account in 2018
- Setting Up LendingClub’s Automated Investing Tool
- New LendingClub Account Performance – Q2 2018
- New LendingClub Account Performance – Q3 2018
- New LendingClub Account Performance – Q4 2018
- New LendingClub Account Performance – Q1 2019
- New LendingClub Account Performance – Q2 2019
Personal Loan Offers Report – September 2019 (LendingTree), Rated: AAA
At 1,270 basis points, the spread between the highest and lowest offered APRs offered to the same consumers were especially stark for high-score borrowers.
- The average spread for those with scores of 760 or higher was 1,270 basis points, amounting to a difference of 58.5% on the average loan amount offered for a three-year personal loan.
- Consumers with scores between 720 and 759 saw an average offer spread of 1,145 basis points, representing a 49.9% difference in interest paid.
- For those with scores between 680 and 719, the average spread was 971 basis points, representing a 37.3% difference in interest paid.
- Borrowers with scores between 640 and 679 had an average spread of 860 basis points, representing a 28.2% difference in interest paid over the three years of the loan.
Kiva Lending Team: Lendio Gives (Kiva), Rated: A
Lendio has provided over 10,000 Kiva microloans through its employee donation and employer matching program.
Lendio understands its bandwidth. They have built up the program slowly over time. Contributions in 2017 totaled $35,075. In 2019, they’ve contributed $121,850. 94% of Lendio employees participate.
There’s Never Been a Better Time to Consolidate Credit Card Debt (Credible), Rated: AAA
According to data collected by the Federal Reserve, borrowers who were assessed interest on their credit card accounts paid 16.97% on average during the three-month period ending Sept. 31. But the average rate on personal loans was only 10.07%.
That’s a spread of 6.9 percentage points — an all-time high in Federal Reserve records dating back to 1998.
Apple and Goldman Sachs aren’t reporting Apple Card information to credit bureaus (MarketWatch), Rated: A
Apple and Goldman Sachs have yet to start reporting consumers’ payment information for the Apple Card to the major credit bureaus, a source close to Goldman Sachs confirmed to MarketWatch on Monday. The source later said that the companies will begin reporting to the credit bureaus later this quarter.
“In three short years, we have raised $55 billion in deposits on the Marcus platform, generated $5 billion in loans, and built a new credit-card platform and launched Apple Card,” Solomon said, adding “which we believe is the most successful credit card launch ever.”
Rise of fintech weakens law to prevent lending discrimination (Roll Call), Rated: AAA
As online banking threatens to make in-person banking at brick-and-mortar branches as archaic as video rental stores, it may do the same to a 1977 law created to counteract decades of underinvestment in minority neighborhoods.
Fewer branches, more online
While that includes some wholesale banks or limited purpose institutions, like credit card banks, online banking is driving the sector’s growth.
At the same time, the number of bank branches with an obligation under the CRA to provide loans and other services is falling. Branches have declined every year since a peak in 2010, at 99,550, according to data from the Federal Deposit Insurance Corporation. Banks closed 1,700 branches in 2018, dropping the total number to 86,375.
After steadily rising to a peak of $505 billion in 2016, the number of CRA-compliant loans that banks issued dropped in 2017 to $482 billion, according to the Office of the Comptroller of the Currency.
CNB Bank Moves to Revolutionize its Retail Lending with nCino (PR Newswire), Rated: A
nCino, the worldwide leader in cloud banking, today announced that Pennsylvania-based CNB Bank will utilize nCino’s Bank Operating System to digitize its retail lending process from end-to-end to enrich the customer experience.
California has reformed consumer loan interest rates. But will lenders find loopholes? (Cal Matters), Rated: A
Gov. Gavin Newsom has signed into law Assembly Bill 539 by Assemblywoman Monique Limón, Santa Barbara Democrat. The measure sets an annual interest rate cap of roughly 36% on consumer loans from $2,500 to $10,000 made by non-bank lenders.
For the prior 34 years, under state law, the sky was the limit on rates charged for such loans. Last year, 333,416 non-bank consumer loans in the $2,500 to $10,000 range had annual percentage rates of 100% or higher. That represented 40.7% of such loans. In the $2,500-$4,999 range, the triple-digit APR ratio was 55.5%.
DrawBridge Lending CEO Discusses Risk and Compliance for Lending Capital to Bitcoin Holders (Crowdfund Insider), Rated: A
Earlier this month, DrawBridge Lending (DBL Digital), a digital asset lending, borrowing and investment management firm, partnered with Kingdom Trust, a qualified custodian providing a self-directed IRA incorporating several digital assets with property and traditional asset investments.
To be eligible to invest, investors must be eligible contract participants (ECPs), which means they should have a minimum net worth of $1 million. The minimum investment in Drawbridge Lending’s series fund is $1 million, which can be met with the contributions of multiple investors.
There are 618,000 millennial millionaires in the U.S. and their wealth is only expected to grow.
Currently, 93% of millennial millionaires have a net wealth between approximately $1 million and $2.5 million, according to the report. Nearly 60% live in either California or New York and they are investing more in real estate than their elder-millionaire counterparts.
The Pros and Cons of Using Peer-to-Peer Lending When Investing in Real Estate (The Motley Fool), Rated: A
Today’s real estate investors have many financing options at their disposal. There are traditional options like government-backed loans, home equity lines of credit (HELOCs), and investment property mortgages. But on top of those, you also have new-age choices like crowdfunding and peer-to-peer (P2P) lending platforms.
Real Estate Earnings: What To Watch For This Quarter (Seeking Alpha), Rated: A
The “REIT Rejuvenation” of 2019 has restored the coveted NAV premium for most sectors, giving these REITs the currency to re-open the acquisition pipeline. This valuation premium has allowed REITs to kick-start external growth, which has historically been responsible for more than half of FFO per share growth across the REIT sector. REITs were net buyers again in 2Q19, buying $12.5 billion in assets while disposing of $6.6 billion. The $5.9 billion in net acquisitions was the largest quarterly “buy” since 4Q17, and we expect this trend to continue into 2020 given the favorable valuation environment. We break down the acquisition activity for each of the REIT sectors later in this report.
AMERICAN FINANCIAL RESOURCES AND FINICITY PARTNER TO SIMPLIFY THE MORTGAGE EXPERIENCE (Finicity), Rated: B
American Financial Resources, Inc. (AFR) announced today it is working together with Finicity—a provider of real-time financial data access and insights, to provide its business partners and their borrowers with a faster, simpler and more secure way to verify assets and income while originating loans.
Roofstock Accelerates Innovation with New Chief Product Officer at the Helm (Yahoo! Finance), Rated: B
Roofstock, the marketplace for investing in real estate, announced the addition of Ketan Babaria to the fintech’s leadership team as Chief Product Officer. Formerly the Head of Product for LifeLock and Capital One’s D3 incubation unit, Babaria will enhance Roofstock’s current offerings and introduce new, creative ideas to accelerate the fintech’s growth and make real estate investing radically accessible.
Director of Operations Joins Fintech Startup LenderClose (DS News), Rated: B
Des Moines fintech startup company LenderClose has welcomed Andrew Deignan as Director of Operations. Deignan will manage the Operations and Vendor Relationships group, ensuring LenderClose delivers the highest level of service to its credit union and community bank lender users.
Zopa launches tool to dispel “mystery” of credit worthiness (AltFi), Rated: AAA
Zopa, the first ever peer-to-peer lending platform, is launching the tool, called Borrowing Power, as it says that lending decisions and credit worthiness have been “shrouded in mystery” for too long.
The tool, which is free of charge, works by giving Zopa customers a borrowing score between one and ten. Customers are shown why they are given the score and how they can help improve the score.
In the Spotlight with Mario Lupori, RateSetter (Financial Reporter), Rated: AAA
We spoke to Mario Lupori, chief investments officer at RateSetter, about whether there is more consolidation to come in the peer-to-peer market and whether forthcoming regulatory changes will hinder the sector.
Samsung.com partners with Klarna to offer pay later payment plans (IBS Intelligence), Rated: A
Samsung.com has partnered with payment provider Klarna in the UK to provide customers service to make purchases from its website and pay later. The customers will get a convenient and hassle-free way to pay later at Samsung.com.
Klarna: too good to be true for students? (Mancunion), Rated: A
Klarna is perfect in those situations, giving you a ‘try before you buy option’. You can get as many items as you wish, in as many sizes, returning all the items you don’t need before a penny leaves your bank account. There’s no waiting around for refunds to reach your depleted bank account – you only pay for what you actually keep.
Octopus Choice’s P2P loans now available within a SIPP (AltFi), Rated: A
The firm has announced that its P2P investment platform is now accessible within a SIPP wrapper.
Could banks become redundant in the future? (Finextra), Rated: A
P2P lending as it right now stands absolutely no chance in competing with traditional banking, as it requires a bit too much time from the lender’s side.
However, should technology such as Artificial Intelligence be successfully implemented on these platforms, it’s likely that P2P lending will occupy a large percentage of the financial market share.
Starling launches TV ad campaign after reaching 900,000 customers (AltFi), Rated: A
Today Starling Bank will premiere its first TV ad on ITV and Channel 4 during England’s UEFA Euro 2020 qualifier against Bulgaria, and Jamie’s Meat Free Meals.
Celsius Now Offers up to 10% Return on TrueUSD Lending Service (Finance Magnates), Rated: A
Celsius Network, a cryptocurrency lending and borrowing platform, has partnered with TrustToken, the team behind dollar-pegged TrueUSD (TUSD), to offer up to 10 percent interest on four new stablecoins.
Casa Italia to expand its restaurant in Liverpool following £650k loan from OakNorth Bank (Fintech Finance), Rated: B
PayPal wants to help Chinese online shoppers buy from overseas (Business Telegraph), Rated: AAA
By the end of this year, Chinese online shoppers will have a new way to buy things from abroad: PayPal.
Despite the tensions between Beijing and Washington, China’s central bank has allowed the US company to take a toehold in the country’s valuable payments market by buying a majority stake of Chinese payments group Gopay.
Barcelona-based fintech ID Finance secures €1.7 million within minutes on Crowdcube (EU-Startups), Rated: AAA
Barcelona–based ID Finance, a fintech that operates in Europe and Latin America, has raised over €1.7 million in crowdfunding within minutes of its campaign going live on Crowdcube, amidst strong demand from investors. The data science, credit scoring and digital finance company has a target of €2.3 million.
The company has a well established global team and over 3 million users, with over 40,000 new users joining each week. It is on track to double revenues this year to €90 million – up from €13 million in 2017 – and is targeting over €267 million in revenue by 2021, with the goal of becoming the number one digital lending platform in Hispanic and Latino markets.
Fintech exits have raked in €83bn since 2013 amid European funding boom (sifted), Rated: AAA
The sale of European fintechs via initial public offerings or acquisitions has pulled in €83bn over the past six years, according to a new report by Dealroom.co and Finch Capital. This is twice as much as the next biggest category, enterprise software, and highlights the scale of opportunity for investors as well as the growing maturity of the fintech market.
The same report also estimates that the continent’s remaining private fintechs have an “unrealised” value of €43bn combined, including companies such as N26 and Starling Bank.
Which P2P Lending Marketplaces in Europe Accept American Investors? (P2P-Banking), Rated: A
European p2p lending services are growing. And yields of 10+% are achievable on some of the platforms. This attracts international investors.
Here is an overview of 5 services (sorted aplphabetically) that do allow US investors.
Assetz Capital is a marketplace for UK SME and property development loans. The liquid ‘access’ products offer 4.1% to 5.75% interest.
Bondora is an Estonian p2p lending marketplace for consumer loans. The highly liquid Go&Grow product offer yields 6.75%. With other products higher yields of 10+% are achievable.
Estateguru is an Estonian marketplace for property loans. Typical interest rates are 10-12%.
Flender is an Irish marketplace for SME loans. Typical interest rates are around 10%.
Mintos is a Latvian p2p lending market place. A wide range of loan types is offered. The fairly liquid ‘Invest&Access’ product currently promotes around 8% rate. Yields of 10+% are possible with manual and autoinvest.
Europe’s top tech startups to know (sifted), Rated: A
Europe’s startup scene is often overshadowed by Silicon Valley, but the continent is gaining ground with more than 160 tech firms valued at over €1bn.
Founded 2005 — Stockholm, Sweden — Unicorn
In 2019 it launched a new $460m fundraising round, giving the company a post-money valuation of $5.5bn and making it the highest-valued private fintech company in Europe. That was a 250% increase on its last valuation at the beginning of the year.
Founded 2014 – London, UK – Rising Star & Female Led
Led by Anne Boden, Starling has made a dent in the UK’s thriving fintech ecosystem. As of August 2019 the bank has just shy of 800,000 customers, including around 60,000 business accounts. The company says it’s on track to pass a million this year and already has £1bn in deposits.
These numbers are not quite as impressive as Monzo, which boasts 3m customers, or Germany’s N26 with 3.5m.
Founded 2011 — London, UK — Unicorn
Former British Prime Minister David Cameron is an advisor to the firm, which is backed by Softbank’s vision fund. The most recent funding round of $800m valued the company at $3.5bn — firm unicorn territory.
Its working finance solution is funded through issuing its own bonds, making it one of the largest bond issuers of the world, with an average of 47 bonds a day.
Nigerian SME Digital Lender Lidya Expands to Europe (Forbes), Rated: A
In an increasing trend where African technology companies are finding a global audience, Nigerian digital SME lending platform Lidya has expanded to Poland and the Czech Republic.
London-based finance platform Divido inks deal with US payment company Splitit offering point-of-sale finance (AltFi), Rated: A
Divido, the London-based consumer finance platform which lets consumers take out credit at the point of purchase to help spread the cost of purchases, has signed a deal with US payment company Splitit to offer a monthly instalment option to customers.
4+ INTERNET BANKING OPTIONS FOR GAMING (One Vale Fan), Rated: B
Klarna has become famous among the players in many countries since its creation in 2005. This virtual bank is seductive for its fast transactions and its privacy. The gamblers will remain anonymous when they deposit or withdraw funds utilizing Klarna as a method. In fact, this Swedish company does not ask any personal details or private information. What’s more, Klarna is also an excellent service to the mobile casino allowing the users to move funds at their convenience.
How Can Neobanks Potentially Transform SME Lending? (Inc42), Rated: AAA
Neobanking is a relatively newer concept in India as compared to the West, and is still on a take-off mode. However, market experts observe the gradual and steady adoption of Neobanks and credit their fast growth to its lender and SME-friendly characteristics.
Investors Pour Record $ 735 Million Into Singapore Fintech Deals (Bloomberg), Rated: AAA
Investors poured a record $735 million into financial-technology ventures in Singapore in the first nine months of this year, according to research from Accenture Plc, which analyzed data from CB Insights, Pitchbook and Tracxn.
That’s up 69% from the same period a year earlier and exceeds the $642 million raised in all of 2018, the study found. Investments in payments startups and those in lending made up the bulk of fintech fundraising, accounting for 34% and 20% of the total, respectively. Insurance technology deals comprised 17%.
FinTech adoption in Canada has increased from 18% to 50% since 2017, according to the EY Global FinTech Adoption Index 2019. Among the reasons driving consumers to FinTech services are better rates and fees (42%), ease of setting up an account (19%) and more innovative products and services (10%).