International P2P Lending Services – Loan Volumes April 2014

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Prosper had a very good April. In UK especially the platforms for property secured lending grew their volume compared to last month. I added two new services to the table. 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 April 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.

How You Can Invest in Equity of a New UK P2P Lending Startup – Provided You Act Quickly

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In December 2013 I saw the pitch of a promising pre-launch UK p2p lending startup called Landbay pitching on the UK p2p equity platform Seedrs to the crowd. The pitch explained how they planned to do p2p lending secured by property in the UK. I liked the proposal and invested a small amount in Landbay shares.

Since then the founders John Goodall and Gray Stern have been busy. They launched the site in public beta, succeeded in winning former Zopa co-founder James Alexander for their advisory board and managed to get featured on Techcrunch.

They also kept investors updated about their progress. A few days ago I got a 21 page report about the current state and future plans.

Now Landbay is raising a second round from the crowd

Landbay raised capital in a few hours on the weekend in a second SEIS eligible round on Seedrs from the existing shareholders. Landbay raised 81,647 GBP for a 6% equity stake. That’s a valuation of 1.28M GBP (up from 0.62M GBP in first round). To avoid dilution investors from the first round had the right to invest into this new round first.

Now there is a 2.96% equity round – EIS eligible – aiming to raise 41,456 GBP (1.36M valuation).

If you are interested you don’t need to be a UK resident. Just sign up at Seedrs and follow the process. If you are outside of the UK, I recommend using Transferwise, when depositing money in order to reduce currency transfer fees significantly. I think this round will close within days, maybe even hours, so if you are interested you need to be quick.

This article is not an investment advice. Investing in startups bears significant risks, including total loss of investment.

Funding Circle Runs Whole Loans Trial

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Funding Circle announced that starting May 1st they will do a one month trial offering randomly selected loans as ‘whole loans’ to selected institutional investors on a first come first served basis.

Announcement:

It’s been a fantastic start to the year at Funding Circle. The announcement of additional funding by the Government-backed British Business Bank and the introduction of regulation by the FCA helped to drive a record quarter of lending, with more than £53 million lent to small businesses across the UK – more than two and a half times the amount during the same period of 2013.

At Funding Circle our goal is to build a better financial world by helping as many businesses as possible to access finance, and investors to earn attractive returns.

Over the last few months you will have seen an increase in lending opportunities with record levels of demand from businesses across the UK. Within the next 12 months we expect demand to increase substantially, and our aim over the next few years is to grow to become a significant part of the small business lending market. In the UK, this is an estimated £7.5bn per month market.

To achieve this we want to ensure we have a diverse range of investors at Funding Circle. More investors helps us to attract more businesses, as we have seen from the Government’s involvement. This helps to deliver more lending opportunities for everyone and ensures long-term stability and sustainability for the Funding Circle marketplace.

As you will probably be aware, we have mentioned before that there is a lot of interest from organisations, such as pension funds, insurance companies, family offices and hedge funds, to join Funding Circle to lend.

We have been considering the best way to introduce these new types of investors to the marketplace in a way that is sustainable and also protects the experience of individual investors.

As part of our considerations we have closely followed the developments of the US peer-to-peer lending market over the last 18 months, where larger investors have purchased whole loans rather than lots of individual loan parts. This has shown to us that introducing the ability for investors to buy whole loans is a successful way of creating more lending opportunities for everyone, whilst also protecting individual investors’ Funding Circle experience.

Today we’re announcing that from early May we will be starting a one month ‘whole loans’ trial with a small group of non-bank financial institutions who will lend up to £3m in total. These whole loans will be purchased in full and it will not be possible for individual loan parts to be purchased, as is the case with the ‘partial loans’ that are listed today.

Initially, this will be a closed trial and last for one month beginning 1st May. During the trial whole loans will not be visible on the marketplace; however we will continue to publish details of every loan in our loan book and clearly indicate whether a loan is a whole loan or a partial loan.

While we anticipate most investors will continue to prefer lending on partial loans, once the trial has been successfully completed we will make whole loans available to any interested investors. You can register your interest after the trial by contacting us …

Lending Club Buys Springstone Financial

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Lending Club announced today that it has acquired Springstone Financial for a total consideration of 140 million US$ in cash and stock. Springstone provides financing options for consumers looking to finance private education and elective medical procedures through a network of over 14,000 schools and healthcare providers.

“The acquisition of Springstone is significantly expanding the services we offer to help consumers achieve their goals,” said Lending Club CEO Renaud Laplanche. “Parents looking to finance their children’s education and patients undergoing elective procedures will now have access to Lending Club loans and benefit from responsible, transparent and affordable financing options.”

Mike Gilroy, CEO of Springstone, said, “Lending Club has established a great reputation as an innovator. We’ve built strong bridges between providers and patients and between educational institutions and parents. We’re excited to become part of the Lending Club platform, which will bring new financing options to our network.”

As part of the financing of this transaction, Lending Club also announced the closing of an equity capital raise. Investors in the $65 million round included funds and accounts managed by T. Rowe Price Associates, Inc., Wellington Management Company, LLP, BlackRock and Sands Capital. According to Peter Renton the valuation of Lending Club at this round is at 3.76 million US$.

“We believe that Lending Club has an opportunity to transform an important part of the banking system into a transparent online marketplace,” said Henry Ellenbogen, Portfolio Manager at T. Rowe Price Associates, Inc. “The Springstone acquisition is another step in that direction, and we are very excited at the prospect of being a long term equity partner of Lending Club.”

Lending Club also raised $50 million in debt financing to fund the acquisition.

(Source: Press release)

Bondora Moves to Fixed Price Bidding Only

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P2P lending service Bondora informed investors today that it plans changes to the bidding system in May. So far Bondora allows borrower to selected between ‘timed funding’ which results in a reverse auction lowering interest rates if more lenders want to bid on a loan during the auction period than the loan amount needed and ‘quick funding’ where the bidding ends, once the loan is fully filled.

In future Bondora will uniformly use ‘quick funding’ loans with fixed interest rates.

Since there will be no advantage for investors to set interest rates low on their automated investment profiles any more after the change, I expect the short term effect will be that investors raise the interest rate on their profiles to the actual interest rate they want to invest at (Currently it is possible and custom to bid 6% in order to heighten chances that bids participate in quick funding loans, which then might actually close at 28%).

Related article: P2P Lending: How are interest rates set

Ppdai Closes Series B Round

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Shanghai-based p2p lending service Ppdai.com has completed series B round (rumoured to be at 45M US$). The round was led by Lightspeed China Partners, an early stage investment company. Wealth management company Noah Private Wealth Management and Sequoia Capital also invested.