Manatt, Phelps & Phillips, LLP has released a report based on survey results from 75 executives and investors at banks, fintech companies and private equity firms; Lend Academy provides a summary of the report in their article; report focuses on the interest from regional and community banks in partnering with fintech companies; high interest from these banks since the partnerships can help them provide their services at a lower cost and also expand geographically; survey results find that the majority of regional and community banks are already engaged in partnerships with fintech firms. Source
News Roundup
This page contains an archive of the Global Newsletter summaries and the weekly fintech news roundups.
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The report is titled "Beyond Fintech: A Pragmatic Assessment of Disruptive Potential in Financial Services"; in a brief summary of the report, the Word Economic Forum says: "Our findings suggest that fintechs have materially changed the basis of competition in financial services, but have not yet materially changed the competitive landscape. They play a critical role in defining the pace and direction of innovation across the sector but have struggled to overcome the scale advantages of large financial institutions."; the report is 196 pages and covers the major verticals in financial services. Source
A new report by economic research firm NDP Analytics sponsored by the...
loanDepot has originated $100 billion in loans through a unique business model that facilitates loans through both an online platform and branch offices located throughout the US; Lend Academy provides more details on their business and recent milestone in their article; in 2016 loanDepot originated $38 billion in loans and since 2010 it has been growing loan volume at an average annual rate of 70%; the company acquires half a million potential borrowers per month and offers mortgage loans, mortgage refinancing, personal loans and home equity loans; Anthony Hsieh, loanDepot's CEO, cites their non-bank status and agile technology as leading factors for their rapid growth in loans and customer acquisition; mortgage lending is one area of the credit market with significant opportunity for market share gains from advanced technological solutions and loanDepot has successfully capitalized on the market opportunity. Source
Merger will result in the largest robo-advisor in marketplace lending; the companies will operate separately for now but the company aims to take the best of both platforms; the funds offered will be streamlined with the LendingRobot Series fund being the focus going forward; Bo Brustkern, co-founder and CEO of NSR Invest, will be leading the new entity with Emmanuel Marot, co-founder and CEO of LendingRobot, acting as a special advisor; the new entity will have $150 million in assets under management with over 8,000 clients. Source
Originations for the quarter were $464 million; OnDeck continues to tighten their credit policy and limit loans designated as held for sale on OnDeck's marketplace; company seeks to achieve GAAP profitability by the end of the year; the second quarter brought some of the highest quality borrowers the company has ever originated which resulted in OnDeck being in a substantially more stable credit position than six months ago; OnDeck made progress in expanding and lowering the cost of their funding sources on multiple fronts; the partnership with JP Morgan Chase has been extended for up to four years. Source
OnDeck released their third quarter financial results today; originations were up 14% from the previous quarter to $531 million; firm plans for GAAP profitability in the fourth quarter and hinted at a new bank partnership for 2018. Source
OnDeck released their Q4 earnings and also announced a reduction of 11% of its staff; the company added $19 million to their loss provision expenses in part due to underperformance seen in 15+ month loans; OnDeck is focused on being adjusted EBITDA positive in 2017 with GAAP profitability in 2018; originations were $632 million for Q4 2016; OnDeck continues to hold more loans on their balance sheet as revenue from loan purchasers remains flat. Source
On November 3rd, On Deck Capital, the largest online small business lender in the US, reported its third quarter earnings; Lend Academy provides details of the earnings report in their article; company reported a loss of $16.6 million; it had reported a profit for the same period in 2015; the adjusted loss came to -$0.18 per share, versus Wall Street expectations of -$0.15 per share; originations increased from $590 million in the second quarter to $613 million for the third quarter; company expects full-year revenue of $280 million to $290 million; shares closed at $4.52, down from $9.46 a year ago; last week, it was publicized that Zhengyuan Lu, an executive for investor loan sales, is leaving the firm to join Victory Park Capital. Source
Inc. has released their list of the 5000 fastest growing private companies; this year over 250 companies made it in the financial services category; the list shares basic information about each company including revenue numbers; several online lenders made the list including Avant, OppLoans, Kabbage, loanDepot, Lighter Capital, FastPay, National Funding and ZestFinance. Source