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Trustbuddy Acquires Geldvoorelkaar and Prestiamoci

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Trustbuddy has entered into an agreement to acquire Italian Prestiamoci, a long-term Peer-to-Peer (P2P) lender, for a total of EUR 5.3 million in order to strengthen its offering of business loans to small and medium-sized enterprises and consumer credit in most European countries.

Furthermore TrustBuddy has agreed to acquire Dutch Geldvoorelkaar for a consideration of EUR10.6m. The consideration comprises EUR 3 million cash, EUR 4 million through the issue of new shares at a 20% premium to the pre-announcement share price and a EUR 3.6 million vendor loan of which 50% is redeemed in January 2016 and 50% redeemed in January 2017. Shares issued as part of the consideration will be subject to lock-up restrictions which expire in January 2016 in respect of 50% of the shares and January 2017 for the remainder.

Both acquisitions remain subject to the satisfaction of certain conditions. In particular, the acquisition of Prestiamoci is conditional upon Prestiamoci receiving a payment services, PSD, license. The Company is currently considering various financing options, including a potential equity fundraising, to part finance the acquisitions.

Geldvoorelkaar (see earlier coverage)

Geldvoorelkaar is the first P2P lending platform with a credit licence issued by the Dutch Financial uthority (AFM).  Geldvoorelkaar offers a professional and established alternative source of financing for SMEs.

  • Geldvoorelkaar opens up European SME market opportunities to TrustBuddy. Management believes there to be substantial demand for alternative lending sources in the Nordic market in particular in P2P lending in the Netherlands.
  • Geldvoorelkaar has been fully operational since 2012 and has a c60-65% estimated market share.
  • Year to date, Geldovoorelkaar has funded EUR 20 million of SME loans with an average revenue margin approaching 6% with no active marketing.
  • Geldvoorelkaar is a strong SME platform with EUR 1.6 million expected revenue for 2014 and growth in the Netherlands expected at an average of 80% in the following two years.*
  • Geldvoorelkaar is already profitable with an expected earnings before interest and tax for 2014 of EUR 0.7 million
  • Subject to the satisfaction of certain conditions, TrustBuddy has agreed to acquire Geldvoorelkaar for a consideration of EUR10.6m. The consideration comprises EUR 3 million cash, EUR 4 million through the issue of new shares at a 20% premium to the pre-announcement share price and a EUR 3.6 million vendor loan of which 50% is redeemed in January 2016 and 50% redeemed in January 2017. Shares issued as part of the consideration will be subject to lock-up restrictions which expire in January 2016 in respect of 50% of the shares and January 2017 for the remainder.

Prestiamoci (see earlier coverage)

Prestiamoci is an Italian private P2P lending company focussing on long term consumer loans.

  • Prestiamoci has established a licenced P2P platform in the highly regulated Italian market. The acquisition is conditional on Prestiamoci obtaining EEA-wide PSD license approval, enabling European roll-out.
  • Prestiamoci re-launched its platform in May 2014 and has since funded EUR 175k with and average revenue margin of 4%.
  • Acquisition adds diversification to TrustBuddy’s existing offering into a product with lower regulatory risk and increased revenue visibility.
  • Prestiamoci’s seasoned management team joining TrustBuddy management will bring significant experience within credit risk assessment.
  • TrustBuddy expects to rollout a consumer instalment loan product in new markets in 2015, and envisages 80% of revenue from this new product from the Nordic markets.

In September 2014 Prestiamoci had concluded a financing round of 450K EUR and in October 2013 a previous capital increase of 550K EUR. According to sources, Digital Magics Angel Network ,which invested just a year ago and provided strategic support in refocusing Prestiamoci, achieves a gain of about 300% on the transaction. Continue reading →

Interview with Asger Trier Bing, CEO of Lendino

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Interview with Asger Trier Bing, CEO of Danish service Lendino.

What is Lendino about?

  • Lendino is a marketplace lender for loans to SMEs in Scandinavia ranging from 20K-2M USD.

What are the three main advantages for investors?

  • Investors get a higher return than from similar asset classes.
  • Investors are enabled to invest in companies that appeal to them (CSR).
  • Investors can invest in their own local area or in a company of a friend.

What are the three main advantages for borrowers?

  • Borrowers get a lower interest on their loan, which will benefit them through decreased funding costs
  • It is faster and easier to apply for funding at Lendino than at a bank.
  • Borrowers can build a stronger relationship with customers who invest in their loans

What ROI can investors expect?

  • Investors should expect a net return of 5-8 percent

How did you start Lendino? Is the company funded with venture capital?

  • Lendino was launched in 2013 by Andreas Christensen and Asger Trier.
  • The vision is to improve finance.
  • The company has been funded by the founders until today.
  • A VC round is ongoing and is expected to close within 30 days.
  • It has a  mix of Danish and UK investors onboard. Continue reading →

Nesta Study Examines Alternative Finance Trends in UK

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Today the Nesta Study ‘Understanding Alternative Finance  – The UK Alternative Finance Industry Report‘ was released. The researchers Peter Baeck, Liam Collins and Bryan Zhang worked in four stages to compile this great report. One included questioning more than 15,000 users with the help of the platforms in distributing the surveys. Furthermore to gauge awareness of the general public for alternative finance 2,007 consumers and 506 SMEs were questioned.

The more than 90 page report documents and visualizes the fast ongoing growth of all alternative finance sectors in the UK and the positive reception by the users. I will conclude by citing some graphs from the study to induce everybody interested in p2p lending and alternative finance to read the full study.


Chart from study page 9


Chart from study page 9


Study page 13


Chart from study page 22 Continue reading →

Two UK Crowdfunding Platforms Currently Raising Money From The Crowd at Seedrs – Crowdlords & Trillion Fund

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At the moment there is not only one but two open pitches from UK crowdfunding/fintech startups  raising money in exchange for equity at Seedrs.
I invested small amounts in both of them and will become a shareholder when the pitches successfully close.

Crowdlords

Crowdlords is a pre-launch two-sided, residential buy-to let crowdfunding platform that wants to bring together landlords and investors.

Landlords who are fully vetted, would identify the properties and be required to invest a minimum amount themselves – the balance is sourced from Investors. Each property would be held in a Special Purpose Vehicle (SPV) with the shareholdings in each SPV split between the Landlord and the Investors.

Investors would be able to select from a range of properties and investments. Investors would gain returns from ongoing underlying rental income and a proportionate share of sale proceeds when the property is sold. Investors could invest fairly modest sums with a minimum investment of 1,000 GBP.

Crowdlords is pitching for 90,000 GBP offering 10% equity (810,000 GBP pre-money valuation). The pitch is currntly 83% filled.

Trillion Fund

Trillion Fund is a crowdfunding platform that raises money for environmental and social projects from ordinary people who want better returns.

Trillion focuses on loan based crowdfunding in green energy and social investment, and earns a percentage of funds raised, paid by borrowers, and an annual percentage of funds lent, paid by the lenders.

Using profit as motivation Trillion aims to re-engage consumers with their money and help them make a profit and make a difference. Trillion effectively operates a two sided network, bringing together people with money and those who need it.

Trillion claims that the recent merger with Buzzbnk has made it one of the largest social crowdfunding business in the UK.

The pitch seeks to raise 500,000 GBP in exchange for 7.7% equity (6M GBP pre-money valuation). The pitch just started and is currently 2.7% filled. Continue reading →

International P2P Lending Services – Loan Volumes October 2014

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October was overall a good month for p2p lending services. Especially Zopa did grow and closed a bit of the gap to the 2 other UK p2p marketplaces . Prosper reached a total volume of 2 billion US$ originated since inception. I added one more service.  I do monitor development of p2p lending figures for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services.


Table: P2P Lending Volumes in October 2014. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed:
If you want to be included in this chart in future, please email the following figures on the first working day of a month: total loan volume originated since inception, loan volume originated in previous month, number of loans originated in previous month, average nominal interest rate of loans originated in previous month.

Seedrs Acquires Junction Investments – Will Expand Into US Market

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Seedrs, a UK crowdinvestment platform, has announced that it acquired California based Junction Investments. Seedrs plans to use this acquisition to expand to the United States in early 2015. Junction’s co-founders, Adam Kaufman and Brian Goldsmith, are now Co-Heads of Seedrs America, and they will be leading this expansion.

Seedrs was already open to international investors and startups, but so far the focus was clearly on the UK and Europe.

Seedrs on building a global platform: ‘A founding principle of Seedrs is that investment in startups and growth businesses should be global. We believe in a future where entrepreneurs and investors from all over the world can connect online. Investors should be able to discover and invest in opportunities anywhere, and entrepreneurs should be able to access capital worldwide.

Financial regulation remains largely national or regional, however, and compliance with applicable law has always been a non-negotiable element of Seedrs’s approach to business. Building a global platform is thus a multi-stage process that involves identifying the right approaches and partners in different jurisdictions.

Having opened across Europe at the end of 2013, we began to look at the U.S. market at the beginning of this year. The U.S. has been slower to embrace equity crowdfunding than the UK and Europe have, and full-scale crowdfunding is not yet possible there. But with the opening of online investment to accredited investors at the end of last year (under Title II of the JOBS Act), and the prospect of wider crowdfunding on the horizon (under the yet-to-be-implemented Title III of the JOBS Act, or an amended version thereof), we feel that now is the right time to begin building our U.S. presence.’

My take: This is one of the first international mergers in the equity crowdfunding space. It will be interesting to see if and how other players do on taking internationalisation beyond Europe.