Last week I flew to Berlin to visit Lendico and met the management. Lendico is the third entrant in the German p2p lending space and launched in December 2013. The fact that they are financed by Rocket Internet, the venture capital arm of the Samwer brothers, attracted additional attention to their launch.
A major topic in our conversation was the known plan of Lendico to offer the p2p lending service in multiple European countries. While Lendico would disclose neither which countries they target next nor details on the timeline they stated that additional countries will be live within the next 6 months. Lendico will manage major functions centrally from the Berlin office and use national offices for some functions of operations.
I learned that Lendico will allow cross-border lending like Isepankur, meaning a German lender that registered could not lend only to German borrowers but also to borrowers resident in any market that Lendico opens to.
Challenging issues to be dealt with are multiple currencies and different credit rating systems in different countries. For the later Lendico aims to simplifiy this for lenders by translating ratings in Lendico score classes A to E that will be used in all markets.
Prompted by my question Lendico CEO Dominik Steinkühler said that in the long run there is a high propability that there will be one large European p2p lending market rather than many fragmented national ones.
Currently Lendico sees Auxmoney as main competitor. Asked whether he expects the fast growing UK p2p lending services to expand internationally Steinkühler told me that he sees no signs for this as these players seem quite satisfied with growing in the UK market.
Lendicos loan volume is growing slowly in the first month. Steinkühler says this was to be expected and similar developments be observed in the starting period of all major p2p lending marketplaces. The team is working on several improvements and product features to be introduced on the platform. While a secondary market is on the list of product features it will not come short or mid term. Utmost importance is placed on the quality of the loan vetting.
A mandatory question to ask a startup that is funded by Rocket Internet is whether there are any exit plans. The management said they are commited long-term to build a successful service and that the exit question is not an issue at all and derived from a misconception on Rocket Internet’s strategy. True, there were a few short term exits in the past and these shape the public image, but actually most Rocket Internet startups have been operated for years.
The Robin Hood
In the talk, Christoph Samwer said that Lendico sees itself as the ‘Robin Hood’ entering the p2p lending space. I guess that is as high an aspiration as it gets. In return the customers will have very high expectations on Lendico regarding results, transparency and service.