UK

The New Saving Stream Pre-funding Model

wiseclerk

Saving Stream LogoToday British p2p lending service Saving Stream introduced a new pre-funding option. This is essentially an autobid, which allows investors to bid on every new loan.

Investors have long complained that (smaller) loans were filling within minutes, were not (always) announced in advance and lately the demand caused the server to fail frequently when new loans were announced.

Here is what Saving Stream says about the new pre-funding model:

Rationale

We want to give as many people the chance to invest as possible so we will provide an option to buy in before the loan goes live up to a self-determined limit. We want the smaller investors to be guaranteed a position in every loan, and the deeper pocketed investors will also participate at the same amount as everyone else. If there is spare capacity, the larger investors will pick this up subject to their pre-set investment levels.

This will also help us know how much is potentially available to lend out. This has been a continual problem that we just don’t know the exact appetite for our loan products and thus limits the number of loans that we can make.

How pre-funding will work?

Set your limit to invest in each new loan.
When a new loan becomes available, you will be guaranteed at least a portion of your investment amount if not all, depending on the loan size.
You will be notified of your participation and are expected to follow up with a bank transfer, much in the same way as normal.
You can sell your loan if you want.

Potentially complicated numbers stuff coming up…

For example  – you set your limit to £1k. There are 400 people who have the same limit and 40 with a limit of £10k. A loan of £1m is launched. All 440 people will get £1k (£400k total) and the 40 people with higher limits will get an additional £9k each in the surplus thus they get £10k in total. The remaining availability will go to the market and can be bought by whoever wants it.

It will become complicated when the loan is less than the amount in the Pre-Fund pot i.e £500k loan, 400 people with £1k, and 40 with £10k. Again, all 440 people will get £1k leaving £60k to divide by the 40 which is an additional £1.5k each, giving a total investment of £2.5k for those investors who set their limit higher.

Those investors with higher limits might be disappointed that they didn’t get their full allocation, but they should be happy that they have participated in an equitable distribution model which should assist with the growth and opportunities available. The next loan might be able to take all of their demand plus more.

You won’t be able to review the loan parts or valuation beforehand (yet) but the secondary market is incredibly liquid and we are confident of the ability to sell your position if required.

I expect that Saving Stream customers will widely use this new option. While it seems strange that this option excludes the possibility to review loan details before bidding, this has been essentially happening before already with loans gone in minutes. And the Saving Stream secondary market is very liquid, therefore it is usually not a problem to sell (unwanted) loan parts fast. Continue reading →

Seedrs Shares Available in Equity Crowdfunding Campaign on Friday

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Seedrs LogoSeedrs, one of the tow biggest equity crowdfunding platforms in the UK (and probably in the world), has announced that it will open a new campaign offering shares to the crowd on Friday. To bid in the pitch and become a shareholder, interested investors need to register at the Seedrs website first and then wait for the campaign to open on Friday.

Jeff Lynn, CEO of Seedrs said:

Last month Seedrs announced its £10 million Series A round led by Woodford Patient Capital Trust and Augmentum Capital. As we explained, we have set aside £2.5 million of that round for existing shareholders and new investors to invest through a campaign on the Seedrs platform. …

The campaign will go live to members of our Leedrs Club (the group of our most active investors) at 9:00 am this Friday, 21st August, and it will then go live to all investment-authorised members at 12:00 pm the same day. … Investments will be accepted on a first-come, first-served basis, and although you will have several days to make payment after investing, we would suggest [investors] transfer any funds [they] wish to invest sooner rather than later.

Please note that by the time the campaign opens on Friday, a significant proportion of the £2.5 million will already have been taken up by existing shareholders exercising their pre-emption rights. We expect, however, that there will still be a good bit of room for new investors, and it is our hope that we will be able to use this opportunity to expand our investor base meaningfully.

I expect that this offer will fill very quickly. The last comparable offer by Crowdcube, Seedrs main competitor, was filled within minutes.

International P2P Lending – Loan Volumes July 2015

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The following table lists the loan originations for July. Zopa originated 52M GBP and takes the lead for that month in Europe. Prosper reached 4 billion US$ in loan origination since inception. 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.
Investors living in markets with no or limited choice of local p2p lending services can check this list of marketplaces open to international investors.
International P2P Lending Volume 07 / 2015
Table: P2P Lending Volumes in July 2015. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.
Notice to p2p lending services not listed: Continue reading →

Crowdcube Raises 6M from Numis

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Crrowcube LogoUK platform Crowdcube today announced that it has raised 6M GBP of investment to further accelerate its growth. The investment is led by Numis, a UK stockbroker and corporate advisor. Tim Draper and London-based Draper Esprit have also joined this new funding round alongside existing backers Balderton Capital, one of Europe’s largest venture firms.

The investment will enable Crowdcube to accelerate growth, continue the expansion of its team, ramp up new product development including the creation of a new solution for companies going public, and invest further in its acclaimed marketing activities.

‘We’re on a mission to help more businesses raise the finance they need to grow, create jobs and deliver returns to investors. We’ve dominated the democratisation of seed-stage equity investment since we launched in 2011 and we’re determined to do the same for larger businesses. We want to put the Public back into IPO.’ commented Darren Westlake, CEO and co-founder of Crowdcube.

This round puts the Crowdcube at 51M GBP post investment.
Continue reading →

Seedrs Raises 10M Series A

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Seedrs logoUK platform Seedrs has raised a 10 million GBP series A round led by Woodford Patient Capital Trust plc and Augmentum Capital. The capital raised will be used to launch Seedrs in the US market.

Furthermore, Seedrs is to launch a 2.5 million GBP crowd funding campaign to give existing shareholders and new investors the opportunity to participate in the round. The details will be announced later.

Seedrs plans to expand its marketing efforts in the UK and Europe, increase platform development activities and launch its business in the United States.

This Seedrs valuation is now at 30 million GBP on a fully-diluted, post-money basis. I wrote a review of my experiences with investing on Seedrs in March. Continue reading →

Rebuildingsociety offers one Business the First 25K Interest Free

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Rebuilding Society LogoUK p2p lending marketplace Rebuildingsociety currently offers a promotion where one business will receive 25,000 GBP of their loan interest free. Loan applications received until 31 August 2015 will enter into the promotion.

Daniel Rajkumar, CEO of Rebuildingsociety.com, said: ‘Companies seeking loans now have peer-to-peer platforms as a mainstream alternative to the banks and I’m delighted to be giving a 25,000 GBP interest free loan to a business. Businesses seeking loan finance can approach us either through commercial finance brokers or directly and our platform will typically enable viable applications to get finance within 4 weeks.’