Harmoney Completes 8.5M Series B

Harmoney, a p2p lending marketplace operating in New Zealand and Australia has completed the sale of $8.5M of Series B shares to a US-based investor and UK-based P2P Global Investments PLC (P2PGI). The Series B round values Harmoney at $109M.

This development comes as Harmoney moves towards the milestone of having facilitated loans totalling $200 million since its launch just 17 months ago.

Harmoney founder and co-CEO Neil Roberts comments: “We’re delighted with the new arrangement, which, as we see it, is further validation of our strong performance since launching in September 2014. It is also attributable to our increase in origination volumes, conservative credit underwriting and strong management team.”

The new working capital will provide the necessary cash reserves to expand Harmoney’s suite of product offerings, increase headcount and support its growth forecasts in both New Zealand and Australia. Continue reading

MoneyPlace and Auswide Bank Enter into Strategic Relationship

MoneyPlace, Australia’s second fully licenced peer-to-peer (P2P) lender and Auswide Bank have entered into a significant strategic relationship and equity deal.
The long term relationship, the first of its kind in Australia, includes a 5 year deal to fund up to 60 million AUD to assist MoneyPlace to grow its consumer lending and for the bank to grow and
diversify its financing activities nationally. Additionally Auswide Bank is taking a 20 per cent equity stake in MoneyPlace.

MoneyPlace launched in October after receiving its retail and wholesale Australian Financial Services licence and provides loans of 5000 to 35,000 AUD through its peer-to-peer lending platform.

MoneyPlace CEO Stuart Stoyan said the relationship is a critical milestone for P2P lending globally and demonstrates how banks can work with P2P lenders to provide fairer, better rates
for all customers. Continue reading

P2P Lending – a View from Australia

This is a guest post by Leo Tyndall, CEO and founder of Marketlend.

The peer-to-peer lending industry remains embryonic in that there are only two Australian peer-to-peer lenders, Society One and Marketlend. The remaining peer-to-peer lenders RateSetter and ThinCats are spin-offs of their UK operations -RateSetter Australia is by now only partly owned by Retail Money Market.

australia-flagThe focuses of both Society One and RateSetter are personal loans whereas ThinCats and Marketlend focus on commercial lending. Legal structure by Society One and RateSetter is a managed investment scheme. ThinCats legal structure is unclear aside from that they are an authorised representative of an Australian Financial Services License similar to Society One and Marketlend. However, Marketlend has opted for the more traditional debt structure by establishing trusts that issue tradable bonds by an independent trustee.

The Australian peer to peer market is operating in the commercial banking market which is 2123 billion of client loans according to BMI Research as of November 2013. P2P Lending remains a new concept and irregularly reported albeit growing exposure is occurring through crowd funding publicity and statements by new investors like Murdoch investor group and James Packer investor group.

Crowdfunding saw commentary from the regulatory authorities in the form of a guidance and reference in a financial system review in last quarter of 2014. The essence is that it should be encouraged however, there are significant legislative hurdles at this time and consideration should be given to making it easier to commence such endeavors.

At this time if you offer a financial product, service, loan or investment to a retail person, a credit license is needed for lending and you are required to hold an AFSL or be an authorised representative of an AFSL holder who has sufficient licenses to enable it to advise, and offer financial products to the retail market. Furthermore, if you chose to offer a product, through a managed investment scheme, you need a responsible entity or must be a responsible entity (RE) to offer the securities. In layman terms, the RE is a similar entity to a trustee. A notable exception to this includes, operating to offer to wholesale investors and offering only business loans. Each of these has it’s own idiosyncrasies.

As recent as 15 March 2015  CBA top executive Kelly Bayer Rosmarin questioned whether peer to peer lending is driven by supply side factors in a low interest rate environment and wondered if the peer to peer model can sustain an entire cycle. This shows a lack of concern or possible complacency by the mayor banks. However other smaller or progressive banks have looked to discuss with peer to peer lenders about possible cooperation or investment.

Marketlend CEO Leo TyndallFor peer to peer lenders we welcome the benign attitude of the larger banks as it is the type of attitude that drives investors and borrowers towards this market. Australia is marketplace where the internet is a well-accepted forum for doing business and the financial services industry is already using it to develop their own businesses. This type of lending is a graduation of the electronic age of the financial services industry in Australia and here to stay.

There is talk of at least 3 new arrivals this year: Money place, Lend2fund and another that has operations offshore.

Marketlend is a business peer-to-peer lender who offers loans only to business in the form of working capital, traditional business lending and commercial property. Using intuitive software to take applications and automated proprietary software within a matter of minutes, Marketlend can complete external credit checks and rate the likelihood of loan repayment. The software is provided by third parties who offer similar solutions to government departments and public companies. A financial analysis is performed on available financials to determine debt coverage service ratios, leverage ratios and general health of the borrower. These data points, historical payment history and approximately 65 input items are used to determine the rating of the risk.  Continue reading

Ratesetter Will Expand P2P Lending Service to Australia

Ratesetter will expand its p2p lending operations to Australia in 2014 and says this will serve as the stepping stone to further launches in Asia. It is also exploring launches in association with financial services partners closer to home in Europe.

Ratesetter has secured investment of $3 million from local and international investors to kick-start its offering from its Sydney offices.

Headed by Daniel Foggo, a former banker with Barclays Capital and NM Rothschild in Sydney and London respectively, the company says it will be the only Australian P2P company offering market-beating savings rates to individuals who lend funds on its platform and accessible loan rates to everyday borrowers who are tired of banks’ hidden fees and profiteering.

Ratesetter will go live in Australia this summer. Ratesetter says, it will be the first P2P lender in Australia to be fully regulated from the outset, allowing all Australians to participate on its  platform, not just professional investors. To make the platform available to retail investors at launch, Ratesetter has been working for a year on licensing.

Ratesetter, launched in October 2010 in the UK was also the first P2P lender to launch a ‘Provision Fund’ – the largest in the UK at 3.8 million GBP – to help protect savers’ funds in the event of a borrower default.  In March 2014, Ratesetter also originated the largest monthly inflows in the UK p2p lending sector. Since October 2010 the total p2p loan volume originated by Ratesetter has been over 208 million GBP.

Rhydian Lewis, founder and CEO of Ratesetter, said: “When looking at international markets in which to expand, Australia was the obvious choice as it bears great similarity to the UK before the advent of p2p lending. Its saving and loans industry is ripe for disruption as banks have been offering below-par deals for too long with little true competition.” Continue reading

Westpac Banking Corp Invests Into P2P Lending Service Society One

In Australia Reinventure Group, the new Westpac­-funded venture capital manager, has invested $5 million in p2p lending service Societyone. Society One, which was founded in August 2012 (see related earlier coverage) by Matt Symons and Greg Symons has originated about 200 loans totalling 4 million AUD. The loan book has doubled in the past six months. Westpac’s VC fund will be joined on the SocietyOne shareholder register by Rocket Internet, which is already funding Lendico, and several local investors including the Australian head of global private equity giant KKR, ­Justin Reizes, who said he has invested in Society One in a personal capacity.The 8.5 million capital raising will allow Society One to develop new credit products. It recently launched livestock loans and loans tailored for young doctors which are being offered to sophisticated investors through its internet-based platform.

Key Take-Aways from the Society One P2P Lending App

Societyone, an Australian p2p lending service, presented a mobile app at Finovate Asia. Previous apps offered by p2p lending services either optimised the display of website data for the mobile interface or offered basic bidding functions for investors. This one goes far beyond that. It promises the borrower a loan application and funding within 3 minutes.

To do this Societyone implemented the following steps:

  1. Only a few fields are required in the application (that is not a revolution but rather common sense and already used in many online application processes for loans)
  2. The borrower allows the app to retrieve transaction data from the past 3 months directly and automatically from the bank account he links
  3. The borrower allows the app to access his credit history data
  4. Like other p2p lending services Societyone offers lenders an automatic bidding feature that bids directly if a new loan request matches the desired parameters
  5. From the information in 2. and 3. Societyone calculates the maximum loan amount which the borrower has capacity to repay. From the information in 4. Societyone can determine which maximum loan amount could be instantly filled by existing automatic bids. Both information combined result in a maximum approved loan amount which is displayed to the borrower
  6. The borrower now enters the loan amount he wants and immediately Societyone displays which lenders fund his loan (in the example in the video 12 persons fund the loan)
  7. If the borrower confirms the loan applications the money is transferred to his bank account.

If you look further than whether there is a need by consumers to apply for loans from mobile devices rather than PCs there are a some very interesting key take-aways from this App. Continue reading