Flender is a UK startup (with background in Ireland) currently pitching to raise 500K GBP from the crowd.
Interview with Kristjan Koik, CEO of Flender
What is Flender about?
Flender is a peer to peer finance platform which helps businesses and consumers to borrow and lend money through their existing networks.
Businesses can leverage their customer base and strengthen loyalty; while friends become part of each otherâ€™sâ€™ success. Flender does this while adding a new element of trust via social network connections.
Flender emphasizes the social relationships between borrowers and lenders. Donâ€™t you think borrowers are hesitant to ask friends and connections for money?
The social lending market among friends, family and connections has never been formalized, which is crazy when you consider that this is a market worth over 3 billion EUR a year in Ireland and the UK based on independent research performed in September 2016.
Asking people that you know for money – and lending to them â€“ is an awkward thing to do and is certainly an unreliable means of finance. Whether itâ€™s to fund further study, grow a business or to fund home improvements, Flender will let you borrow from and lend to people with whom you have a connection much more easily.
For individuals, there is the satisfaction of helping others while earning more interest than a standard savings account while businesses can have access to funds faster and at the interest rate they prefer. Everyone wins.
P2P lending has evolved a lot over the past 10 years. Your model has a back to the roots touch to me. Do you see your model as a reinvention of the true spirit of p2p lending?
I believe p2p lending and the sharing economy is the future of finance.
We have all lent or borrowed money at some stage of our lives and will use some sort of finance in the future â€“ be it mortgage, car leasing, credit card, deposit account or investments. Similarly, we all have people in our social circles and professional networks who have money to lend or are looking for finance. It makes no sense that rather than doing these transactions with people who you know and trust we would do these with complete strangers with whom we know little or nothing.
Flender is not trying to create a new marketplace. We are simply formalising existing massive social lending market and by providing a seamless user experience and having first- mover advantage we feel we can dominate this sector.
The pitch video
Flender positions itself as different to other p2p lending marketplaces. Yet you take these as benchmarks for valuations in an exit. Furthermore your expected margin is much higher than those of other UK p2p lending marketplaces. What is the reasoning behind this?
Yes, we are very different to other p2p platforms, but investors will initially want to benchmark against something with which they are familiar, hence our comparison to existing platforms.
We can generate larger margins because we are not marketing to users based purely on price. Lenders are not coming to Flender simply looking for a higher return and borrowers are not always just looking for cheap money. Businesses also want to increase loyalty with their customers for instance.
You want to expand Flender internationally. How do you handle regulation if you offer your service pan-European wide?
We have a legal framework in place to launch in both the UK and Ireland. We have spent a considerable amount of time and money to achieve this.
We would hope that in the future there will be EU directive in place that will help innovative fin-tech companies to launch in new markets much quicker and more economically. Until that point we will use the knowledge that we have gained from working with UK and Irish regulators with our regulatory talks in other jurisdictions.
Where do you see Flender in 3 years?
I see Flender as being market leader in social lending in multiple countries and possibly in M&A talks with traditional P2P lenders or major banks or other credit institutions.
Name one fact that makes your pitch a better investment than any other pitch on Seedrs.
Flender is an innovative company with a fantastic team and strong backers. Our addressable market is larger than any of our competitors, and the existing market size is close to doubling in size year on year.
This is a unique opportunity for investors to become part of Flenderâ€™s success. Valuation of our company will be very different next year once we launch our platform and start generating revenue. It is possible that we wonâ€™t have to do new round of equity raise again and instead will raise debt equity (i.e. people will flendit to us!) through the Flender user base itself â€“ so come and join us while you can!
P2P-Banking.com thanks Kristjan Koik for the interview.
This article is not an investment advice. Investing in startups bears significant risks, including total loss of investment.