Funding Circle recently announced it would be shifting away from manual lending to auto bidding; with the change Funding Circle follows its two closest competitors Zopa and RateSetter who only offer auto-bid options; with auto-bid investors gain access to more diversified investments; P2P Finance News outlines the UK P2P industry auto-bid platforms versus manual bid platforms. Source
The Times provides more detail on issues of transparency at RateSetter; reports that RateSetter made loans in partnership with Wellesley and Archover; according to The Times, RateSetter lent via these platforms, utilizing them as a source of borrowers; around GBP10 million ($13.05 million) in property development loans were lent in conjunction with Wellesley which were repaid in full in April 2016; GBP1 million ($1.31 million) in loans are still outstanding with Archover; a RateSetter spokesman reported that no new loans with these competitors are being issued. Source
Funding Circle announced they passed the milestone last year; CEO and Founder Samir Desai stated, “We were pleased with the result for the group. Overall we improved our loss margin. The UK business became cashflow positive in Q4 of 2016 and continues to generate positive cashflow in the first half of the year.” he added, "As we've said many a time, we believe that our business should be a public company as well because that fits with our values of transparency and being open, and allows us to take our service to more and more people as well."
Other highlights include:
- Operating expenses rose by 43% to £103.1 million;
- Losses dipped by 3% to £35.7 million thanks partly to a foreign exchange boost;
- £1 billion lent last year;
- Loans outstanding rose by 61% to £1.37 billion;
More than $1 billion has been invested in UK fintech companies this year; the first half of the year brought $564 million of VC investments, up 37% from the prior year period; according to the article, fintech is worth $9.25 billion to the economy and employs 60,000 people. Source
The company may go public as soon as late autumn; sources state that the company will exceed a £1 billion valuation; investment banks are expected to be in place by spring; Funding Circle would be the first p2p lender in the UK to go public. Source
Abundance sold 72% of all Innovative Finance ISA (IFISA) products in the last year; this represented 62% of investment into the new product overall; while the P2P lender is happy with their success they realize their market lead will diminish as they were one of a few platforms approved in the last year; a host of other platforms, including top lender Zopa, have been approved recently and the numbers are sure to be more widely spread out among a larger group of platforms; Bruce Davis, co-founder and joint managing director of Abundance, tells AltFi, "Abundance's success is very much the good news part of the Innovative Finance ISA story to date." Source
The UK’s financial watchdog, the Financial Conduct Authority, issued a warning to investors regarding initial coin offerings (ICOs); in particular they warned of the “high risk, speculative” nature of the new capital raising method; financial regulators worldwide have begun cracking down on ICOs in recent months, China has banned them and the SEC in the US issued a similar warning as the UK. Source
There have been many recent launches of digital banks which was a result of regulatory changes in the UK; Metro Bank was the first having launched in 2010, but there are many new names since then; article highlights founders and investors in the space including Eileen Burbidge (Monzo), Sanjeev Gupta (Wyelands Bank), Jonathan Rowland (Redwood Bank), Nick Ogden (ClearBank) and the Pears family (Masthaven Bank). Source
Karen Mills is a Senior Fellow at the Harvard Business School focused on SME finance, entrepreneurship and competitiveness; she previously served as the Administrator of the US Small Business Administration; in her post on AltFi she discusses why London will remain a global leader in financial innovation despite uncertainty with Brexit. Source
According to research from the Financial Conduct Authority, two-thirds of outstanding lending as of November 2016 was to consumers with credit scores in the top 30%; this shows little difference from two years prior as unsecured consumer lending grew at double-digit rates in 2016 and 2017; however data showed that borrowers are staying in debt longer. Source