Live Stream of the P2P lending Conference in Vilnius presented by Savy*

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The first P2P lending platform in Lithuania, SAVY, is organizing their second annual P2P lending conference on the 23rd of March in Vilnius, Lithuania. Guest speakers from all over the world, including the co-founder of LendIt Conference Jason Jones and the leaders of the top Baltic P2P lending companies – Mintos, Bondora and SAVY, amongst others, will engage in a number of panel discussions and presentations.

The conference will be focused on the possibilities of P2P lending and Crowdfunding, while the participants will touch some important topics related to the prospects, challenges and trends for Alternative Financing on a global scale and in the Baltic region specifically, as it offers a considerably higher return on investments than most Western European countries.

https://www.youtube.com/watch?v=B29ozFU0CQE

Live stream of conference starting at 13:30 GMT+2 on March, 23rd

*Sponsored post: This post was paid for by Savy.lt, the conference organizer. I rarely publish sponsored posts, but in this case I thought the content is a very interesting fit for the blog audience.

P2P Lending Marketplace Afluenta Raises 8M Series B From IFC and Elevar Equity

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Afluenta LogoAfluenta, headquarted in Buenos Aires, announced today the completion of its Series B funding round from the International Finance Corporation (IFC), the private sector institution of the World Bank Group, and Elevar Equity, a venture capital firm. IFC and Elevar Equity are investing 4 million US$ each.

Afluenta seeks to disrupt the traditional financial services industry, cutting out middlemen and using proprietary technology to transform the process of applying for a loan, thus facilitating access to financing. Afluenta says it offers borrowers a simple, affordable and less bureaucratic experience, while delivering better yield for individual and institutional lenders.

A pioneer in the region, Afluenta plans to use the proceeds of the Series B financing for accelerating its network expansion plan across Latin America. Launched in Argentina in 2012 and in Peru in 2015, Afluenta plans to launch new services in Mexico, Colombia and Brazil in the next 12 months to consolidate as the first pan-regional player of this new and disruptive alternative financing. Continue reading →

Twino to Remove Currency Risk for UK Investors

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Latvian p2p lending marketplace Twino today announced plans to shield UK investors using the platform from currency risks. So far all investments on the platform are conducted in Euro. Twino already takes the currency risk of Polish Zloty, Danish Krone or Georgian Lari versus the Euro. Now it plans to make the platform more attractive for investors holding their assets in GBP. The announcement reads:

One of TWINO promises is that we protect investors from currency risk. Thus, while investing on TWINO you don’t need to worry about Polish Zloty, Danish Krone or Georgian Lari appreciating against euro, as every transaction on the platform is performed in EUR.

However, investors from the UK still face the risk of EUR appreciating against GBP, which might lower their returns. Therefore, next week we are planning to launch a major upgrade that will remove the currency risk for investors, who hold their investable assets in British Pounds, equalizing the benefits of investing on TWINO with Eurozone investors.

The functionality will allow investors to choose the currency that they want to invest in (either EUR or GBP), and every transaction on TWINO will be processed in the chosen currency (including deposits, withdrawals, investments, repayments, etc.).

We will provide a further notice when the new functionality launches, and will be reaching out to existing investors, asking if they want to convert their TWINO accounts to GBP.

We are glad to be the first platform in Continental Europe to provide such functionality and hope some of you will benefit from it!

The Twino CEO Jevgenijs Kazanins indicated that Twino is hedging the currency risk, an action that is possible for a platform with volume but not available or viable for individual retail investors, would they strive to do it on their own.

LendInvest Raises 17M GBP Series B from Atomico

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Lendinvest logoLendInvest, a UK online marketplace for property finance, has completed a 17 million GBP (25 million US$) Series B equity investment from Atomico, the technology venture capital firm founded by Niklas Zennström, the co-founder of Skype.

This is LendInvest’s second equity investment in nine months. In June 2015, LendInvest secured a 22 million GBP (33 million US$) Series A investment from Beijing Kunlun, the listed Chinese technology company.

The round takes LendInvest’s total institutional funding (debt and equity) to over 200 million GBP (285 million US$).

LendInvest was launched in 2013 by founders Christian Faes and Ian Thomas, and has lent 560 million GBP to finance 2,100 properties in the UK. The UK mortgage market – a £1.3 trillion sector  is traditionally offline, slow and generally a very poor consumer experience says LendInvest.

Today LendInvest’s technology reduces the time taken to process mortgages from months to days, while maintaining rigorous credit controls. LendInvest has also opened up mortgages as a new and attractive asset class that delivers returns of over 5% per annum for investors.

LendInvest will use this funding to accelerate its investment in technology and extend its lead in the property finance market. The company is recruiting its first Senior VP of Engineering and will expand its technology and product teams. Continue reading →

Which P2P Lending Marketplace Do You Recommend?

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I am often asked “Which p2p lending marketplace do you recommend?“. It is a natural question to ask for people that are familiar with the concept of p2p lending, but have not invested yet.

I feel hesitant to answer it with an outright recommendation for any one marketplace.

Sure I do have my preferred marketplace. Everybody has. But ask 10 different seasoned p2p lending investors and you might get at least 5 different answers. What is right for me, may not feel right for you. There can be no one size fits it all for p2p lending marketplaces. Interestingly as a sidenote investors seem to have less problems to agree why they dislike a platform – and they can also agree on ‘better’ platforms, you just don’t get consensus on the best platform.

What an investor prefers is influenced by his personality and past investment experiences. Investors differ in the expectation they tie to the investment, in risk appetite, in how they perceive and gauge risks. They may prefer a more actively managed investment or a passive investment style. Some enjoy auctions and elements that create competition for others factors like user interface might be a factor that lifts one platform over another.

That such a variety of different models has evolved and still prospers shows that they cater to an audience that is not homogeneous in their needs and wishes. One could argue that there is such a variety because it is a new field and everybody was just implementing ideas and experimenting and there were no role models, but that eventually the models will converge towards a best practise model. And I believe that is and will be happening, but only to a certain degree. Doing business over the internet allows marketplaces to deviate somewhat from the mass market and develop a style that fits a certain clientele easier than it would be for an offline financial offer because the economics of reaching out to and serving this clientele are different.

One entrepreneur recently told me ‘We are different, we just need 10% of the users to like us’ (sry if I rephrased that to much). My answer was ‘Just don’t be to different. Investors are conservative. Why scare 90% of your potential customers away’. I still believe in my answer, because I think it commercially makes sense. However it is minted by my past experience and my perception of the investor behaviour. So I actually want him to succeed in doing things VERY differently and making it as satisfying and enjoyable for those 10% he wants to be the perfect marketplace for.

What do I answer on the question?

At conferences or in other situations without much time, I usually suggest several marketplaces the investor might want to look into and point to my blog for more information.

If there is more time, I usually ask questions to try to find out what the person is looking for, what factors are important for him and what his past investment experience is. Then I tell which marketplaces do well on these factors and might in my opinion be a good match based on what I understood he is looking for. It still feels imperfect and uncomfortable for me sometimes. Maybe it is just a cultural thing, that most people are not comfortable in making recommendations how other people should invest money.

What would be the best answer?

I often think, the straightforward answer is ‘It depends‘. I have never given this answer. Even in situations when I am pressed for a very short answer.

Impressions from the P2P Investing Day in Prague

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Today I am in Prague at the P2P Investing Day organized by Symfonie Capital. There are several Central and Eastern European marketplaces present like Bondora, Finbee, Estateguru, Zlty Melon, Symcredit and Zonky, but also Lendinvest and Ablrate from the UK. The content of the panels and presentations was not as basic as in last year’s conference. I’d estimate about 150-200 attendees.

One interesting discussion centered on the differences between a bank loan and a p2p loan for a SME loan borrower that has problems to make the payments. One argument was that the advantage of a p2p lending marketplace is that it can be more flexible in finding a solution, e.g. by prolonging the loan term – having power of attorney granted by investors it is free to find a solution it deems right for the situation. The counterargument was that the platform should adhere to a rather strict set of rules since it owes its investors predicitability. Personally I understand both views but as an investor I prefer platforms to stick to a predefined process, because only that will make collections and defaults rates predictable. If there is too much flexibility and on the spot decisions it will be very hard to statistically evaluate platform performance and development for troubled loans over time.

One interesting anecdote was mentioned by Lucie Tvaruzkova, CEO of Zonky, a consumer loan marketplace in the Czech Republic, launched several month ago. She said that at the moment there is a waiting list of 7,000 investors wanting to use the platform but to scale it properly in line with loan demand, she lets those in only bit by bit. So far 5,000 investors are already active on the platform.

Symvest 2016 p2p lending conference
Panel on consumer focused platforms with representatives of Savelend, Bondora, Finbee and moderator Michael Sonenshine

David Bradley-Ward, CEO of Ablrate, told me that he expects to put more airplane loans on the platform in 2016 than in the previous year, but has to be selective in which loans fit the investor appetite. He also says the situation gets easier as he now has institutional investment in place that can pick up loan parts that would otherwise go unfunded by institutional investors.

I liked the panel that had 3 SMEs, that borrowerd through a p2p loan, on stage, as this gave an interesting change of perspective. Continue reading →