DirectMoney, an online lender in Australia, has received institutional funding to help it continue originating loans for the next 12-24 months; the funding follows the appointment of new CEO, Anthony Nantes on October 5; full terms of the deal and details on the institutional partnership were not disclosed by the source and appear to be available only to the platform's shareholders. Source
News Roundup
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A development agency for the Scottish government, Scottish Enterprise, and its investment arm, the Scottish Investment Bank (SIB), have agreed to fund loans on the LendingCrowd platform; they will invest up to £2.75 million in Scottish small-to-midsized businesses, acting in parallel to the retail investors on the platform; the Scottish government earlier identified SMEs needing financing up to £150,000 as an economic development priority. Source
Intuit has partnered with BlueVine to make credit more easily available for its QuickBooks users; the partnership will allow small businesses using QuickBooks to obtain credit lines of up to $100,000; BlueVine will add a line of credit product offering to the borrowing options on QuickBooks which currently also include loans from Lending Club, OnDeck and Funding Circle. Source
Venture capital investment in marketplace lending is slowing as firms are struggling to become profitable; in 2015 venture capitalists invested $5.2 billion in 132 marketplace lending deals; in 2016 that total is down to $2.2 billion and 65 deals, according to a report from PitchBook Data; Moody's has also reported on a lack of profitability in the sector; with a key focus on achieving profitability it seems there are a few themes that will be important to watch in the industry including investor channels, unified methodology, capital usage, partnerships to increase demand and more reliance on institutional cash. Source
PeerStreet announced that they have crossed $150 million in originations after one year in business; the company launched at Money 20/20 last October; so far the platform has experienced zero losses, providing returns between 6% and 12%; PeerStreet's weighted portfolio loan-to-value is 65%. Source
Stress testing from Funding Circle has reported its loan platform would still provide investors with a net return of 6.4% given a worst case market scenario; while effects from Brexit continue to be debated, market skeptics are not as optimistic as the UK platforms; they foresee stagflation in the UK characterized by higher unemployment and slowing GDP growth; they are also concerned about a lack of skin in the game which has prompted parliament member, Chris Philp, to request from the Financial Conduct Authority that a portion of each firm's loans include balance sheet capital; while marketplace lending executives are against this approach, policy makers are considering it. Source
In a speech at the Money 20/20 conference in Las Vegas, the head of the CFPB said he was troubled by banks who would shut off access to third-party data providers and believes consumers should have access to their data; though the agency declined to comment on the possibility of a new rule, they did make it clear that consumers should be the ones who decide when and who should have access to their data; this puts banks in a tough position as they work to comply with the current regulations and burgeoning fintech market that has given consumers a variety of technology options to use their personal data. Source
The big data technology provider raised the round from MissionOG with follow on investment from Notion Capital and Singtel Innov8; they intend to use the new funds to grow their technology and client services teams also expanding partnerships to keep up with demand from the US and Asia; DemystData provides financial institutions with a big data tech platform to make improved risk and compliance decisions. Source
The Debt Exchange notes how US regulators are flagging some concern with commercial real estate investment concentrations, even as pricing shows steady demand for properties; regulators are finding bank ratios of commercial real estate loans to total risk-based-capital are approaching 300% in certain property markets (300% is possible through leverage) and loan-to-deposit ratios are approaching 100%, both flags on the risk side; the article notes that loan sales, to private investors as well as through securitizations, are an effective way to reduce these ratios. Source
An online lending startup with a unique concept has raised $500,000 in seed funding; CreditMate seeks to offer online loans for bikes and scooters in India; the company has partnered with 25 dealers in Mumbai and the process works similar to an auto loan; borrowers can identify the bike of their choice and work with the dealer for purchase and loan approval. Source