German p2p lending service Smava has raised 4 million Euro in a new round. New investor in this round is the largest Italian private bank “Banca Sella”. Smava also joins in on Italian p2p lending service Prestiamoci saying that Smava aims to grow to a leading European p2p lending service.
This is actually the second start Smava undertakes for European expansion. Smava Poland was merged after a rather short time in operation with another Polish service.
After this round VC Earlybird holds 54%, VC Neuhaus Partner holds 20%, Banca Sella holds 10% and the founder team holds 4% of Smava shartes.
In its press release Smava stresses its successful growth. However in the past year Smava had to deal with a significant decline in new loan volume funded per month.
A new study of the DIW Berlin (see page 3-9) (authors: Nataliya Barasinska, Nicola Jentzsch und Dorothea Schäfer) has analysed Smava loan data from the years 2007 to 2011 and found out that people who use p2p lending Smava for borrowing resemble the average population using conventional bank loans. Against expectations there was no major difference in age structure:
Regarding gender there is a gap, 28% of Smava borrowers are female; whereis in the comparison group 40% of borrowers are female. Regional distribution of borrower residence did not differ from average population. Continue reading →
Last week, following 2 years of preparation, Seedmatch launched the first p2p equity service in Germany. Startups can pitch for up to 100,000 EUR (approx. 142,600 US$) funding. Investors can bid amounts starting form 250 EUR.
Due to the legal and regulatory situation Seedmatch uses a construct (“Stille Beteiligung”), where investors do not become shareholders of the funded startup, but rather participate on the profits of the company. Founder Jens-Uwe Sauer says: “…thesilent partner’s holding are structured at Seedmatchto participateondividendsandcapital gainsofthe start-ups. It was important for ustooffera good solutionforbothsides– for themicro-investors afair deal and forthestartupsa manageablefinancial model.” (translated from German by P2P-Banking.com).
The startups have the choice to buy-out investors after 6 years. The Seedmatch model thereby gives much more control to startups and less rights to investors in comparison to Symbid and Crowdcube. On the other side the raised funding is not paid out in one sum, but rather in steps according to milestones reached (which were specified in the pitch). Seedmatch charges startups 5 to 10% of the raised amount. Continue reading →
Are women more risk-averse then men when it comes to lending money to strangers via p2p lending services? A recent study by Nataliya Barasinska, analyzed what impact gender has on the investment decisions. In the study, which was supported by a grant by the European Commission, she looked at bidding and loan data of the German p2p lending service Smava for the time span from March 2007 to March 2010.
Women are a minority among lenders, but are no more risk-averse than men
Only about 10% of the lenders at Smava are women. But they do not perceive and react to risks differently than men, when it comes to picking loans for investments. Continue reading →
It was only a matter of time, that the p2p concept would be applied zo the insurance sector. Friendsurance does just that. You invite your friends and relatives, and they agree to cover part of the damage. In exchange Friedsurance claims that you can save up to 50-70% of the insurance costs.
At the moment Friendsurance offers general liability insurance, household contents insurance, legal expenses insurance and and cycle insurance.
How does this p2p insurance work?
Each of the invited friends will have to contribute 20 EUR in case an insured damage occurs. The remainder of the damage amount is covered by a conventional insurance.
Friendsurance says the costs savings are substantial since the concept:
prevents fraud
prevents misconduct (through social control)
eliminates sales costs
discourages claims for small damages
lowers administration costs
I am sceptical about the concept for two reasons:
I very much doubt that anybody will want to involve friends and family in claims settlement, especially if his neglience caused the damage. It seems awkward for all involved.
Currently there is only one insurance company actively offering lower rates (Friendsurance has set up a way for this concept to wiork via bonus payment even if the insurance company is not actively participating). The whole concept looks to me as if a comparison portal for insurance rates has been pimped up with a nice p2p story that helps in PR and marketing – but the main business model is to refer customers to insurance companies.
But I’m willing to be proven wrong and will take another look in a year or 2 to see how Friendsurance develops.
More than 2 years have passed, since P2P-Banking.com published the first overview table of p2p lending companies. At that time the focus was to create a comprehensive list and to get a perspective on the loan volumes.
Today I want to look at a smaller selection of p2p lending companies and do a rating on more factors than just loan volume. While I describe below what factors led to my rating, please note that the rating represents my personal opinion.
The table lists the companies in alphabetical order and gives:
New loan volume per month
This amount is in most cases retrieved from the last month(s) figures from the company websites (if they have statistic sections), and then converted into US$ at today’s currency exchange rates. In other cases it is a rough estimate by me based on volume figures published in media in the recent past. For CommunityLend I failed to find a per month figure (the total figure from launch to mid-February is here).
Brand/Press
Extend and tone of press coverage in the past months. Since a large share of new users is introduced to p2p lending services via media, positive media coverage is extremely important. Continued positive media coverage has helped some companies to associate positive values to their brand.
Growth/Marketing
This column especially rates if the new loan volume is growing continuously month after month. Furthermore it puts the absolute volume into perspective to the size of the market. It is obvious that absolute numbers in a country with a small population (e.g. Canada) will be much lower than those in a country with a large population (e.g. US). Furthermore it takes into account if the (online) marketing measures of the the company succeed in winning new borrowers and lenders (though in most markets lenders do not need to be actively acquired).
Sustainability
Sustainability rates a mix of several factors:
ROIs for lenders / default rates Most p2p lending companies that failed in the past, did so as a result of high default rates which led to negative lender ROIs and caused massive lender churn
Ability of company to raise new funding Most p2p lending companies still have to bridge a considerable time-span at their current growth rate before they become cash flow positive. The ability to raise more funding to finance continued operation is essential for their success
Business model
User satisfaction
This rates the publicly voiced user opinion. Major factor are the comments in forums. To a lesser degree I took the user experience published in blog articles into account. The problem with lender experiences published in blogs often is that the writer is casting a positive image, since he earns commissions for newly referred customers through the affiliate program of the p2p lending site. Also these review are often written at the start of the lending activity at which point the lender’s ROI is naturally unharmed by the experience of defaults.
Empty fields: I had not enough information to rate these. E.g. with some of the new UK p2p lending companies I felt I had too few indicators to reach an opinion on the sustainability.
Availability of information also influenced the selection of companies. Due to language barriers including more services (e.g. the Japanese p2p lending companies) was not feasible for me.
