Interview with Jana Mücková, Relationship Manager at Bondster

I interviewed Jana Mücková, Relationship Manager at Bondster (see her bio at the end of the article). By registering via this link and entering promotion code 5506 new investors get 1% cashback on all investments in the first three month.

What is Bondster about?

Bondster is one of the fastest growing fintech companies in the field of P2P (Peer-to-Peer) loan marketplaces in Europe and the very first online investment platform of its kind in the Czech Republic. Bondster connects providers of loans with retail investors. Investors (individual or companies) may invest their free funds into loans already provided by different providers. Investors can choose from different types of loans, maturity, security, providers. Investors can also see the repayment history of the debtor to whom the loan had been provided and they can also see the basic information about the debtor.

What are the three main advantages for investors?

The biggest advantage is definitely high returns on loans. Moreover, these loans are either secured (by real estate or movables) or offered with a Buyback Guarantee (in case the debtor does not repay the loan, the provider has to buy it back from the investor) which eliminates the risk for investors. Imagine your money sits in the bank account, you lose money in real terms every single day since the inflation rate is higher than the nominal interest rate on your bank deposits. On Bondster investors can earn more than 11 % on Euro investments in average. Do you know a bank that could offer you such a return?

Bondster also offers loans with unique features such as Exit from the investment or Guarantee of Liquidity. This is especially popular with Investors that are more risk averse and prefer more liquid investments. Exit from Investment means that the investor can get back the outstanding principal at predetermined points in time after the investment had been executed (after a week, month, half a year etc.) for a predefined fee. Guarantee of Liquidity allows investors to withdraw the invested amount (outstanding principal) any time for a predefined fee.

From what we have learned from our investors, our choice of Providers is really appreciated. We carefully choose our partners. Providers we cooperate with are always either well established companies in the local markets with a very good track record, or younger companies but with huge potential and experienced people with strong professional background in the management.

What are the three main advantages for loan providers?

Our partners can benefit from alternative and flexible financing we offer. In case a provider needs for example some extra funds for its development, he can upload an extra tranche of loans to our platform and receive these extra needed funds from our investors without any additional administrative burden or costs. This is a huge advantage for providers because applying for a business loan in a bank or negotiating with and raising money from big institutional investors takes much more time and is often also more expensive.

Our onboarding and due diligence process are on one hand very complex, but on the other our team is always willing to help, assist and explain and we usually manage to complete it within a few weeks.

Our team really likes challenges, and this is why we are so flexible. We always try to find tailored-made solutions.

What ROI can investors expect?

The average return on Euro investment is now 11,49 %, on Czech investment it is a bit less around 9,32 %.

How does Bondster attract, select and vet new loan providers?

… We got to the stage when the providers approach us by themselves. They learnt about us through P2P forums, blogs or influencers and realized that they can be more visible on Bondster than on other older platforms. Generally, we look for strong and established partners in the local markets or strong groups operating in several countries. We now negotiate with providers outside EU to offer our investors new opportunities for diversification.

Can you please tell us a bit about your background and the team’s background?

Well, our team has 10 members with a professional background in banking, IT, portfolio and project management, and customer care. I personally worked 5 years in banking sector which is quite rigid environment. I needed more space for my ideas. I am a kind of person that is never happy because there is always something that can be improved, right? I think I drive my colleagues at Bondster crazy sometimes because of that, but online marketplace is that kind of business that has to be always challenged and innovated to follow current trends and that is exactly why I love it.

Is the technical platform self-developed?

Partially yes, but we also outsource. The technical development of the platform is secured by one Irish company with a long-term experience in developing innovative software for banks.

How is the company financed? Is it profitable?

Bondster is fully owned by the Czech investment company CEP Invest Private Equity. At this stage, we invest all the available funds and energy into development. We want to create a platform that is not only user friendly, but also offers something extra. We want to be better than our competitors and that is why we value our investors´ ideas and appreciate their recommendations.

What were the main challenges when launching your platform?

The biggest challenge was to find the investor and a strong business partner. It is not only about the money, it is also about the expectations and philosophy. We really appreciate that we managed to attract CEP Invest Private Equity as an investor and ACEMA Credit Czech, a.s. as our strategic partner because they profess the same values. They helped us develop and also expand to foreign markets and we are very grateful for such an opportunity.  Another challenge was to find right people because here at Bondster we believe that the strength of a company is in its people.

I know that Bondster attracts investors from the whole EU. But you also have loans in CZK currency appealing to local investors in the Czech Republic. Do you observe any difference in the investment approach/attitude of Czech investors compared to other nationals?

Well, Czech investors are generally more careful, they start with small amount to test the platform and its operation. Investors from Western Europe usually invest higher amounts from the very beginning.

What are your next plans? Can you share some interesting developments that are currently in the making?

We are now preparing in cooperation with one of our European providers a limited offer of loans for 15 %. This will be launched at the end of April [April 30th]. We are also preparing new features for autoinvest and new settings of filters. The long-term goal is to launch our own mobile app for investing. During summer we would also like to launch the currency conversion for investors as we have a growing number of investors from countries outside Euro zone and we want to give them an opportunity to easily convert money through our platform. And as I said before, we would like to continue working on new providers outside EU to offer enough diversification possibilities.

Where do you see Bondster in 3 years?

Our goal is to have 20,000 investors, 60 providers and EUR 80 million of loans on the platform in three years. We would like to top up with our competitors and maybe even overcome them. It would be great if we would manage to become one of the 5 best P2P platforms in Europe. We will work on simplifying our services and innovating our platform and IT solutions to serve the best to our investors.

P2P-Banking.com thanks Jana Mücková for the interview.

Jana is a Relationship Manager, she manages an international team responsible for acquisition of new providers. She studied at two prestigious Asian universities and previously gained working experience in banking and export support. She is also a leading economist of Bondster.

 

Why has the FCA Refused the Application of Mintos and has the Decision any Consequences?

The FCA, the Financial Conduct Authority, is the supervising regulatory body for p2p lending platforms in the UK. In Dec. 2018 it refused the application of Mintos or more precise of a separate legal entity within the Mintos group, established for operations within the UK.

The full notice of the FCA decision can be read here. Below I outline some of the aspects. I also reached out to the Mintos CEO, who kindly answered my questions on this matter.

Before we go into the details, I want to make it clear, that the FCA decision has no direct impact on the current operation of  Mintos platform, which is headquartered in Latvia.

Mintos Marketplace Limited applied for permission to conduct a specific regulated activity (“permission to operate an electronic system in relation to lending (Article 36H RAO)”).

Reading the FCA decision there are several points that led to the refusal:

a) the applying company does not currently meet the minimal funding requirements of 50K GBP as specified by the rules (paragraphs 49-50 of the notice)

b) the head office of the applying company is not currently in the UK (51-53)

c) the FCA has doubts that the Mintos business model will be adapted adaquately to comply with the UK regulation rules (paragraphs 29-33, 35-38, 40)

d) the FCA find Mintos wind-down plans are not specific enough (41-44)

e) the FCA is not satisfied with Mintos’ understanding of the UK rules (46-48)

The decision is interesting to read. Naturally it judges Mintos solely by the formal compliance regarding the UK rulebook. Any other non-UK marketplaces seeking FCA approval can certainly learn some things from this declined application. As I stated above, it does not have any consequences for the current operation of the Mintos marketplace. It only affects any potential plans Mintos had for the UK market.

That gets us to the more interesting point: why did Mintos strive to get FCA approval still in 2018 despite Brexit? I asked Martins Sulte, CEO of Mintos, and here are his answers:

1) What was the intention of Mintos to set up the seperate UK entity and apply for permission at the FCA. Was this related to offering IFISA products and possible tax advantages for UK investors?

The intention is to connect to our marketplace loan originators originating loans in GBP in the UK and offering those loans to investors from the UK. We believe that the UK can become a self-sustaining marketplace where local investors are able to fund loans originated locally in the UK.

2) Considering that the application was pursued still as recent as July 2018 (point 29), this is an interesting move in light of Brexit, with several UK fintechs going the other direction to secure a continued presence in the EU. Any comment?

We view the UK market as a separate market that has the UK specific regulatory environment when it comes to crowdlending. Our intention is to create a largely self-sustaining UK marketplace that serves both UK loan originators and UK investors. In that light uncertainty caused by Brexit plays less of a role. It is important to note that each and every country has their own approach to regulating crowdlending, which means that for instance having the FCA permissions for working in the UK would not really affect our operations in other countries, even in EU. Only when the European Commission’s proposal for a regulation on European crowdfunding services providers come into place we might see that licenses are passportable across the EU and then in that light, the Brexit certainly would more of a consideration. For now, we have to look at each country separately.

3) Is the announcement of the application for an e-money license a reaction to the upcoming decision by the FCA?

No. E-money licence and UK permissions are very different licenses.

4) Do you think that any of the assessments the FCA made, will be relevant for the Latvian regulator once the Latvian regulation is finalized?

I don’t think so. Each country has its own approach. The UK has a rather specific approach. When we talk about Latvian regulation we also have to take into account that it will cover only investors and loan originators in Latvia. Once the Latvian regulation is finalized we will still have to look at each country separately. Us having a necessary license in Latvia will play a little role when considering our operations in, for example, Mexico, South East Asia or Russia, or even in other countries of EU.

 

Martins added: ‘This was a formal Financial Conduct Authority (FCA) decision on Mintos’ application for operating in the United Kingdom submitted by the Mintos Marketplace Ltd (a separate legal entity within Mintos group that was established for operations in the UK). The application was submitted almost two years ago. In these two years, our business model has evolved, our team has expanded significantly and we have gained major business results on a European and global level that defined our position as a leader in the market of investments in loans. The application for necessary permissions to operate in the UK doesn’t affect our daily business and the future development of Mintos, and the rejection of the application is nothing that can, nor will, affect our business operations in other countries.

The UK has different and specific legislation, and the FCA notice serves us as valuable feedback for adjusting our processes and procedures to fit the UK specificities. At the moment, we are in no rush when it comes to entering the UK market, as we are all aware of the many uncertainties regarding the Brexit issue. Anyway, our growth and expansion goals are unwavering, and entering the UK market will remain in the scope of our interest. We will continue working with our legal and regulatory advisors and will take into account the FCA’s feedback when considering our next steps with respect to the UK.’

Orca Money to Raise 500K via Equity Crowdfunding – Interview with CEO Iain Niblock

Orca Money is currently running an equity crowdfunding campaign on Seedrs to raise 500K GBP at a premoney valuation of 1.7M GBP. Anybody can invest in Orca Money shares with a minimum investment amount of 10 GBP applicable. I interviewed the Orca CEO Iain Niblock

What is Orca Money about?

Orca is an aggregation platform, allowing investors to invest across a range of peer to peer lending (P2P) platforms, lending sub sectors and a large number of borrowers. We further offer independent investment research, providing confidence to investors when making decisions.

Currently investors are investing directly on P2P platforms. This makes building and managing a diversified portfolio frustrating. We centralise this process by allowing investors to research, build and manage their portfolio from the Orca platform. We provide the P2P platforms with a source of retail investors.

Investors can review the performance of their portfolio, diversify their risk and earn the attractive returns that the sector offers.

What are the three main advantages for investors?

Risk adjusted returns: We offer an investment return to our users which is reduced in risk through diversification. By allowing investors to invest across multiple P2P platforms, lending sectors and a large number of borrowers, we facilitate easy diversification.

Reduced admin burden: Orca manages all fund deployment, email communication and performance data aggregation. Investors can login to their personal Orca dashboard and view a breakdown of their portfolio, as well as an aggregated view of their investment performance.

Automatic portfolio build: Orca has been producing independent analysis on the market for the past three years. We have conducted due diligence in the market and curated a portfolio for investors to invest through. This removes the hassle from P2P investing.

Iain NiblockYou are currently raising money. Who are you raising from and what do you plan to use the capital for?

Our investment is open to the public on the Seedrs equity crowdfunding platform. Investors across the EU can register and invest in the Orca business. The proceeds will allow us to expand our userbase, integrate with more lenders and to further develop the functionality of our platform.

Prior to launching the crowdfunding campaign, we secured a portion of this investment from two institutional funds based in Northern Ireland and a number of leading angel investors. It’s great to be combining these investors with crowd investors.

Why have you selected Seedrs for your equity crowdfunding campaign?

A number of our customers mentioned that they would like to invest in Orca’s business. We’ve gained incredibly valuable feedback from these customers and, ultimately, we wanted to give them an opportunity to own shares in the business. We hope that this campaign will attract further investors and customers to do the same.

Personally, I’ve tracked the equity crowdfunding market closely for many years and I’m now genuinely excited to be leading a campaign. Seedrs was an obvious choice as they have facilitated funding for a number of other P2P platforms.

One benefit of Seedrs is that investors invest through a nominee structure. The Seedrs nominee structure holds and manages the shares on the behalf of the underlying investor. For the investor, this means the nominee can track and monitor shareholder rights as a collective. For the company, this reduces the administrative burden of having a large shareholder base.

Where do you see Orca Money in 3 years?

We aim to evolve into the hub for P2P investment research, investing and portfolio management. Investors will be given access to credit investments across the EU, originated by P2P platforms and other non-bank lenders. The functionality of our platform will increase, delivering a fully functioning investment aggregation platform.

Orca is a differentiated product in a rapidly growing market.

Name one fact that makes your pitch a better investment than any other pitch on Seedrs.

In comparison to other Seedrs pitches we believe our valuation is very good value. This was set by institutional investors based in Northern Ireland where valuations are generally lower than other parts of the UK and in particular London. I’d expect the valuation to rise substantially during any subsequent rounds.

P2P-Banking.com thanks Iain Niblock for the interview.

Interview with Grupeer

Interview with Alla Kisika, founder and Vladislav Filimonovs, COO of Grupeer

What is Grupeer about?

Alla Kisika: Grupeer is all about people! We have created the platform which is based on 3 pillars:

  • Security (protection)
  • Technologies (efficiency)
  • Benefit (profitability)

Our platform is not just the bridge connecting the borrower and the investors, Grupeer is a transparent environment in which the investors can feel safe, receiving fast and clear high profit, using the latest technologies.

What are the three main advantages for investors?

Vladislav Filimonov: As mentioned, the financial safety of our investors is our main priority. First of all, the number of outstanding or default transactions it is equal to zero. This indicator is reached only to our rigid scoring which eliminates nearly 75% of the loan originators interested to place the projects on our platform. The reverse side of the coin is lack of variety of the projects.

Secondly, we give a unique opportunity to diversify the portfolio, investing in business loans or in development projects within one platform.

And last but not least, all of our loan originators provide BuyBack guarantees for each project. Besides, our investors get access to all financial information of the borrower of the project. To convince of our advantages, we offer the minimum sum of the contribution of 10 EUR, we are sure that after the first experience, the investors will become our loyal customer!

As for development projects, in many scenarios, the management members of Grupeer are acting as a shareholder to have a full control towards successful implementation of it.

What are the three main advantages for borrowers?

Alla Kisika: To clarify, Grupeer doesn’t issue the credits and we are working with legal entities only.

“Fuel for your business.” The borrower has a possibility of refinancing due to the services of our platform, and it means that, the company will get the financial resources or as we call it – fuel to grow the company at the velocity of the rocket.

The size doesn’t matter. We consider borrowers of all sizes. And experience has shown that size doesn’t matter. Even if the borrower is small, but with good financial history, we are ready to provide favorable credit rates, fast result and high-quality services to grow together!

Great Customer Experience. We are sure that services and the ideas can be copied but what really distinguishes is the way the service is provided. Customer satisfaction is our Top priority. We practice the individual approach to each partner from the beginning to the very end.

What ROI can investors expect?

Alla Kisika: We can proudly say that now the average net annual return of Grupeer is 14.25% and it is the highest annual average rate on the market. Most of our projects have the stable interest rate of 14%, some of them, for example, the most loved by German investors- Finsputnik Platforma SIA projects have 15% interest rate.

It should be mentioned that there is no correlation between a high interest rate and the increased risk. Such high-interest rate is stipulated by company’s policy and marketing strategy which makes our platform attractive to check the mechanism of return of percent and principal.

Grupeer offers a wide variety of loans from several countries. How do you succeed in sourcing and checking these loans?

Vladislav Filimonov: As mentioned above, we don’t offer a wide range of the loans from the different countries but considering that we could critically improve our scoring system that pays off for 100% (we would like to remind that the number of expired and default transactions is equal to zero). Besides, our sales team started to work on attracting the new projects therefore soon we will please our investors with many new projects.

How did you get the idea to launch a p2p lending marketplace?

Alla Kisika: Life gave the idea of the platform development. In due time, the founders of the platform had a very serious project regarding the construction and commissioning of the Thermal power plant. At some point, when a large amount of financial means has been already invested and very little remained before the end of the project, the need of additional 3 million euros has appeared. Founders have faced a problem of the full amount as someone wanted to invest only 500’000 EUR, someone 1’500’000 EUR and these people were not friendly with each other therefore a certain sum of money hasn’t been collected till the deadline and the project was closed. And the conclusion was obvious –  human relationship shouldn’t influence implementation of the projects and that it is necessary to develop the platform which will provide such an opportunity. And Grupeer platform has been developed for this purpose.

Can you please tell us a bit about your background and the team’s background?

Vladislav Filimonov: Force and success of our company is our employees. From myself, I have gained a massive experience in leading Large Group of Multinational Teams as a Vice-President of Mastercard and while working in Pay Pal. This experience is now spread across all functions of Grupeer to make it even more investors-oriented platform.

Below you can meet some of our team members:

CEO – Andrey Kisiks is the professional developer with 20+ years of experience in European Union. Fields of activity: construction, residential real estate projects development, construction and operational commissioning of complex technical objects (Power Supply), Finance and Peer-to-Peer.

CMO – Leonid Tenkaluk is experienced Digital Marketing Manager with a demonstrated history of working in the information technology and sales industry. Skilled in Team Management, Marketing Management, Negotiation, E-commerce and Entrepreneurship.

We very thoroughly select our employees, as our loan originators. In April of this year, several strong experts joined our team, and, in a few months, we are planning to double the number of our teammates to boost our team and to be able to go from “good” to “great.”

GrupeerIs the technical platform self-developed?

Vladislav Filimonov: Yes, our technical platform is 100% self-developed without using some “ready-to-use” software products. Besides that, we did not use any outsourcing services. The basic part of the platform is developed, but we continue to improve it on daily basis. We are planning to add several innovative solutions for the more convenient use of our platform in near future.

How is the company financed? Is it profitable?

Alla Kisika: The company is self-financed. As we have only started to conquer financial oceans, we didn’t manage to generate profit yet, but we are planning to reach a break-even already in the next year.

What were the main challenges when launching your platform?

Alla Kisika: As in any innovative field under that is not regulated by law we have faced several the bureaucratic issues which we are solving successfully. Secondly, we have spent a lot of time on development of the reliable scoring system to minimize any investor’s risks. And the main challenge today is to get our values over to the audience and to earn its trust.

Is Grupeer open to international investors?

Vladislav Filimonov: Yes, we are. Now, we work with investors who are EU residents. Soon, we will certainly expand our geography.

Where do you see Grupeer in 3 years?

Vladislav Filimonov: Our main objective in following 3 yeas is to become a leader service provider of the alternative investment market in EU. We don’t want to open plans prematurely, but we are planning to become the conductor to unique products in this market. To prove ourselves as the most innovative, safe and favourable platform.

You have one wish, that the regulator will fulfil. What is your wish?

Vladislav Filimonov: As they say – be careful what you wish for, you may receive it. Our sole ambition is the liberal relation to this field as P2P business is very perspective alternative for World economy.

P2P-Banking.com thanks Alla Kisika and Vladislav Filimonov for the interview.

Interview with Narinder Khattoare, CEO of Kuflink

What is Kuflink about?

Kuflink is a peer-to-peer property investment platform that brings borrowers and investors together. Our borrowers seek quick access to short-term finance that a high street bank would be unable to deliver, and our investors seek competitive interest that beats the typical rates offered with regular savings and current accounts.

Investing in property has previously been reserved for the very wealthy, with the money and means to put significant sums towards developments. The fintech revolution, however, has opened up a wide range of opportunities to retail investors who want to make meaningful returns on their cash, and in turn, opened up borrowing opportunities for a range of projects that would previously be denied such quick access to loans.

Kuflink has built a peer-to-peer platform in this emerging space to give retail investors the opportunities that were previously only available to high net worth individuals and institutional investors. In doing so, it also offers developers bridging loans to fund projects across the UK.

Since our launch of the p2p platform in 2016, Kuflink lenders have invested over 17 million GBP, with 0.00 GBP losses to date.

What are the three main advantages for investors?

Firstly, investors are offered high rates of return associated with property investments, which due to the nature of the property market are often very secure and predictable. In this age of mass-market retail investment, property opportunities have one of the longest track records, as people have been investing in property for hundreds of years, and long before technological advancements allowed us to build an accessible P2P platform.

A second main advantage for investors is that Kuflink has a highly effective due diligence procedure with an exceptional track record. We’re so confident in our vetting of loan requests that we cover the first 20% of losses in each individual opportunity on the platform. We really believe in each loan, and investors can be confident in all opportunities, as like them, we trust the platform with our own funds at risk.

Thirdly, investors are only offered access to the very best opportunities, as Kuflink only approves around 30% of loan applications. This gives lenders peace of mind that their investment is very likely to be successful.

What are the three main advantages for borrowers?

We have been providing bridging and development loans since 2011 of up to 1 million GBP, and our lenders have invested over 17 million GBP in just under 2 years, proving highly advantageous for our borrowers.

Firstly, Kuflink gives property professionals highly competitive rates on development loans. Many of these highly secure projects may not otherwise find funding, as Kuflink’s due diligence process filters highly promising opportunities that others may incorrectly deem inappropriate.

Secondly, borrowers can access a huge number of investors through the p2p platform, and are provided with a highly regulated means of crowdfunding their projects. This allows developers to work on projects that people really want, and can help to build strong community relationships between loan backers and project managers, leading to increased opportunities for future project funding.

Finally, Kuflink’s on hand customer service team is highly responsive to any queries or difficulties with loans, and can offer instant advice and support in the event of any difficulties.

What ROI can investors expect?

There are multiple ways for investors to lend their money with Kuflink, and each of these carries different estimated ROI.

Using the Auto-Invest feature, the platform will automatically diversify investors’ funds, and can offer up to 5.35% interest pa gross*. Investors can also choose to invest in certain opportunities to have more control over their portfolio. This is through Kuflink’s Select-Invest feature, which can offer up to 7.2% interest pa gross* over shorter periods of time. Finally, our IF-ISA offering also allows investors up to 5.35% interest pa*, with a £20,000 tax-free allowance for 2018/19.

You are advertising “investors never lost a penny”. At a future point in time defaults will happen. What is the procedure for dealing with these and what overall unrecoverable rate of debts do you expect?

In the case of defaults, we instruct an insolvency practitioner to recover funds, however we expect our excellent track record to continue and hope we won’t need to act upon this in the future.

Narinder KhattoareIs the technical platform self-developed?

The platform has been developed by our CTO, Hari Ramamurthy, alongside in-house front and back-end developers to ensure the technology seamlessly compliments our P2P offering. Since our launch in 2016, the platform has been operating smoothly, while undergoing continuous updates and improvements. Our in-house technical team can respond immediately to any borrower or lender issues with the software.

How is the company financed? Is it profitable?

The Kuflink platform as it stands today has evolved from alpha bridging, which provided the funds for the launch of Kuflink Bridging, which hosted the initial P2P offering. Kuflink’s model, as with many P2P platforms, is to take a small cut from each transaction, and currently runs at a profit.

What were the main challenges when launching your platform?

One of the main challenges we have had to face is inter-departmental integration. With so many moving parts across different disciplines, from property due diligence experts, to finance and tech experts, making sure there are good lines of communication and correct pathways in place have been essential to our successful operation.

You offer an Innovative Finance ISA with tax advantages. Can you please provide some absolute numbers on how many UK investors have invested into this? And are there more new subscriptions or more transfers in of existing ISAs?

We currently have many IF-ISA account holders who have so far made significant investments. There has been a large influx of transfers in from other ISA providers from both new and existing Kuflink account holders, however we cannot comment on the exact number of account holders or investment value as these figures are commercially sensitive.

Is Kuflink open to international investors?

Our platform is open and accessible to overseas investors with a UK residency and a UK bank account.

Which marketing channels do you use to attract investors and borrowers?

We use a variety of marketing channels, from online advertising, to PR and even major sponsorship deals such as our partnership with Ebbsfleet United Football Club and their Kuflink Stadium.

What factors do you see impacting the British property market in the near future?

Brexit is of course a big issue that could potentially impact property in the UK, with an air of uncertainty surrounding the future of the market. Although we expect this to have a somewhat adverse effect on the markets, we believe that UK property will continue to be an attractive area of growth and investment, and should be relatively robust to any larger market perturbations.

Where do you see Kuflink in 3 years?

We currently have [a] positive outlook for the next three years, even in the face of uncertainty in the marketplace. Our trends show that there is a steady increase in loan applications alongside growing demand from investors for lending opportunities.

We also have plans to continue the work reinvigorating local communities around Gravesend and across the UK through the Kuflink Foundation. We hope to expand our charity and community work, which currently includes sponsorship of Ebbsfleet United, work with Kent County Council, and charities such as Age UK.

You have one wish, that the regulator would fulfil. What is your wish?

We work very closely alongside the regulator and are satisfied by their requirements. Our platform is fully functional within the current rules, and we find that these are more than sufficient for our platform to run smoothly, fairly, and profitably.

P2P-Banking.com thanks Narinder Khattoare for the interview.

Interview with Kristjan Koik, CEO of Flender

Flender launched a year ago. What did you achieve since launch?

  1. We have funded c. 1,300,000 EUR deals through our platform and we are proud that our defaults have remained at 0%.
  2. We have just finished equity fund raise where we raised successfully 800,000 EUR from world’s biggest VC Enterprise Ireland and private investors.
  3. We have strengthened our credit team with head of credit Colin Barry who came from AIB Bank and David McNamara ex director of Merrill Lynch International Bank. David has joined our credit committee and board of directors. This all means that our lenders can be assured that Flender has best in class underwriting practices.
  4. Following due diligence, Price Waterhouse Coopers is heading our debt raise from institutional finance providers.

We offer very attractive 10-11.5% interest rate to our lenders. Current default rate is 0% and our world class credit team will ensure great returns to our lenders.

You now want to raise a 50M Euro debt package. What will that be used for?

Funds will allow:

  1. Accelerate funding of the deals on our pipeline
  2. Loans on our marketplace will get funded quicker
  3. Offer bigger variety of credit options to borrowers such as higher ticket loans and property backed peer to peer loans

Can you please give details about the planned launch of property finance loans?

Our target market will be property developers and builders looking for working capital towards last phases of construction. Target loan size is 250,000-750,000 EUR.

Kristjan KoikHow will these loans be secured?

Loans will be secured against 1st legal charge on the property

What interest rates can investors expect on the property loans?

8-10%

When will we see the first property loan listed on the marketplace?

We are aiming for May 2018

You recently repaid a convertible loan. Why did you decide to repay that loan rather than convert this into equity stakes in Flender?

This was condition of our new equity investor. Investment allowed us to repay our loan participants with very generous 12% return.

Flender holds permission to lend in the UK. How are your plans progressing to offer loans in the UK market?

Our plan is to expand and grow our brand in Ireland. We will review our launch plan for the UK towards end of this year.

What are the main challenges in growing the business right now?

Now that our platform and model have been proven then our goal is to scale up. We would need to grow both the number of retail lenders and involve institutional finance for this.

We welcome your readers to participate in campaigns on our marketplace.

Can you share some demographics on your (retail) investor base?

  • Ireland 58.41%
  • United Kingdom of Great Britain and Northern Ireland 14.86%
  • Germany 13.74%

You have one wish that the regulator fulfils for you. What is your wish?

We would welcome EU wide regulatory framework for p2p platforms.

P2P-Banking.com thanks Kristjan Koik for the interview.

Interview with Ahmed Moor, CEO of Liwwa

What is Liwwa about?

liwwa is a marketplace lending platform that provides funding to small and medium businesses in Jordan. Our mission is to support job and income growth in the region. To date we have underwritten about 10 million USD in loans. This has helped to create 475 jobs in Jordan, 1.77 million USD in income, and 13.05 million USD in economic output.

What are the three main advantages for investors?

The type of investors we target are financially-savvy professionals who already have a portfolio of investments. They are attracted to our service because it is a way for them to further diversify their existing portfolio. The other advantage is that there are no big barriers to testing out the platform – provided he meets certain basic criteria, anyone can register and there is no minimum amount required in order to start lending. Once an account is activated and the investor is ready to get started, the power of choice is in his hands. He is able to browse the various campaigns, read through the credit scoring and business information and select which ones to participate in. A final advantage to using liwwa is the relatively high returns; our Internal Rate of Return across the liwwa portfolio stands at 9.45% for the last 12 months.

It is important to note that the investment is unsecured and therefore a high risk one. This means that if a borrower defaults on his loan then the investor stands to lose any money that he has funded to that particular business and not yet been repaid. We aim to disclose as much information on this risk as possible throughout our website. We also keep investors regularly updated on progress to recuperate the funds in the event of a late payment from the borrower.

What are the three main advantages for borrowers?

There is a 240 billion USD capital access gap in the MENA region. For borrowers, we provide a much-needed alternative to bank financing. The liwwa financing proposition is attractive because we do not require collateral, and because we offer an extremely swift process. We are aware that most borrowers are in need of purchasing supplies or assets rapidly to continue growing their businesses. We commit to reviewing all applications within 48 hours. If an application is approved, the borrower is able to access funding straight away. And finally, we are transparent and we do not charge any up-front or additional fees. A Murabaha rate that an approved borrower is offered is directly related to the riskiness of his business, as determined by the credit assessment and the resulting credit score. Our friendly customer service team ensures that applicants are well informed throughout the process.

What ROI can investors expect?

The return on investment that investors can expect is directly dependent on their risk appetite. Generally speaking and assuming no defaults, an investor who puts all of his funds in low-risk campaigns is likely to make a lower IRR* than an investor who funds only medium- or high-risk campaigns. We encourage investors to diversify as much as possible across risk level as well as sector and loan tenor. Our current liwwa index stands at 9.45% for the last 12 months.

*The liwwa index reflects IRR, or Internal Rate of Return. More information on the Internal Rate of Return can be found at the following link: https://www.liwwa.com/help/irr

Ahmed MoorIs the technical platform self-developed?

The technical platform is self-developed to the extent that the proprietary data is all owned and managed in-house. There is a large focus on predictive modeling, and on collecting enough data to leverage this more in the future as a means for building efficiencies into the credit assessment process.

How is the company financed? Is it profitable?

The company has raised 5.55 million USD from investors and 6 million USD in debt to date. Our investors include Silicon Badia, Bank Al Etihad, DASH Ventures, and Samih Toukan. Our investors include a number of banking partners Bank Al Etihad, Capital Bank, Arab Bank, and Ahli Bank.

We will achieve profitability in 2018, and we are currently working to close a Series B round of investment.

What were/are the main challenges of the market you address?

IFRS 9, with its provisioning rules, is one of the main drivers of banks’ reticence to lend to SMEs. The market demand for loans hasn’t appreciably changed, and one could argue that market risk has stabilized in many MENA economies – so the accounting rule change is having an outsized impact. Companies like liwwa are poised to fill a need because much of the debt that liwwa manages is treated on an off-balance sheet basis. Retail lenders and non-bank institutions can contribute to filling the SME lending gap given a difference in risk appetites and a more generous perspective on solvency ratios.

Is Liwwa open to international investors?

liwwa is currently open to investors from the MENA region and Malaysia. We cannot unfortunately on board investors from other regions at this time due to strict compliance regulations imposed by some countries like the United States. We are working to be able to offer our services more widely in the future.

Which marketing channels do you use to attract investors and borrowers?

Our investors and borrowers are two vastly different audiences, and our marketing strategy reflects this.

For investors, marketing is varied and a combination of word-of-mouth, digital and more traditional forms of ATL advertising, the latter something we have recently started scaling up. We recognize that investors will want to know more about the company and want to trust in it before they start actively investing, and this make take time. Through all forms of advertising we encourage potential investors to learn more about us and we provide a lot of transparency to facilitate this. For example, anyone can read through our portfolio results www.liwwa.com/help/stats, or our blog blog.liwwa.com where we provide insights into how we work and articles on technology and investment.

For borrowers, social media marketing has been an important and cost-efficient tool for us. We also rely on a Sales team to spread awareness and build relationships with potential customers. As a result of our investment in maintaining customer satisfaction throughout the whole application journey, repeat borrowers currently make up nearly 50% of our portfolio.

Where do you see liwwa in 3 years?

The medium- to long-term focus is on continued improvements to our credit assessment process using technological efficiencies. In the next few years we will have a vast amount of data on the market that we can better leverage for predictive modeling. This means that we can gradually rely more on a combination of predictive modeling and manual credit assessments, minimizing the latter part as the former increases in accuracy.

This will contribute to making the liwwa model easier to replicate in other markets and, given the vast demand across the MENA region, we are targeting to roll out to other MENA markets.

We are still focused on our base of operations in Jordan, and the country will always be an important market to us.

P2P-Banking thanks Ahmed Moor for the interview.

Interview with Yann Murciano, CEO of Blend Network

What is Blend Network about?

Blend Network is an online property lending marketplace that focuses on lending to established property developers in high-growth areas across the UK but outside London. Since its official launch in January 2018, Blend Network has already lend £1.5 million GBP to 6 projects across Northern Ireland, Scotland and Norfolk with an average fixed return of 12.2% p.a. Lenders can join for free and manage their loans through a user-friendly dashboard. Borrowers are double-vetted by both Blend Network and a sponsor before being listed on the Blend Network platform. In addition, Blend Network loans are only made against security to help ensure the protection of lender money in the default scenario.

What are the three main advantages for investors?

  1. Access to niche markets: While most P2P property lenders focus in the London market due to its convenience, we focus in less crowded markets outside London that are outperforming not only the London market but also the average UK market. We have done loans in Northern Ireland where according to the recent RICS UK Residential Market Survey Report the outlook is considerably more positive than in some other UK regions, with prices rising, a growing number of potential new buyers active in the market, robust demand and overall stronger sentiment. Similarly, according to the latest UK House Price Index data, Scotland was the only UK region where average year-on-year house prices in 2017 where higher than in 2016 (In England, Wales and Northern Ireland the pace of price growth moderated, although more significantly in England).
  1. High returns: Our focus in high-growth, high-yield pockets of the UK property market outside London enables us to return up to 15% return p.a. – right at the top-end of the P2P lending marketplace. Our average return for the 6 loans since launch is 12.2%, significantly above the average of around 8% return across other P2P property platforms according to our own calculations.
  1. Strong due diligence and credit risk assessment: We pride ourselves by the strength of our due diligence process. Borrowers are double-vetted by both Blend Network’s Credit Committee and a sponsor before being listed on the Blend Network platform. Our Credit Committee is chaired by senior banker Charles Lamplugh who has 35 years of experience successfully winning and running corporate relationships for Lloyds Banking Group. In addition, Blend Network loans are only made against first charge on the security as well as personal guarantee from the developer.

What are the three main advantages for borrowers?

  1. Access to finance: Most property lenders pulled out in places such as Northern Ireland after the 2008 financial crisis and many haven’t gone back yet, but paradoxically Northern Ireland is one of the fastest growing UK property markets. For small developers in those markets, getting access to finance is simply not easy. Small and Medium Enterprise (SME) developers have the flexibility and the desire to build on brownfield sites, to redevelop derelict buildings and to maximise the potential of property which may no longer be viable for commercial use. Figures from the Federation of Master Builders (FMB) House Builders Survey 2017 suggest that a shortage of available small sites, combined with a lack of finance, top the list of barriers facing SME house builders.
  2. We bring knowledge and understanding of developers’ true requirements: We operate in areas where the constrained nature of most mainstream lenders has led to many opportunities for small developers being delayed, frustrated or lost. In contrast, we pride ourselves for our understanding of the true requirements in the development process. As one borrower put it ‘It was very refreshing to work with a company that understood the process well so could recognise the opportunities available and thus able to finance accordingly.’
  3. No exit fee for early repayments: If our borrowers are able to complete their project before the maturity, great! They can repay the loan with no exit fee. It’s a win-win.

What ROI can investors expect?

Between 8% and 15% fixed return p.a. Our average since launch is 12.2% fixed return p.a.

Yann MurcianoIs the technical platform self-developed?

The platform was developed for us, we own it.

How is the company financed? Is it profitable?

The company has been self-financed so far. It is profitable but we have just decided to take the whole team on an offsite to Miami, so we spent all our profit! J J

What were the main challenges when launching your platform?

Frankly, our main challenge so far has been trying to explain why the returns are so good! In today’s markets, there are not many investments that offer an average of 12% return p.a. with no volatility. One might think it is too good to be true. It is not. The simple answer is that the UK housing crisis and lack of available homes is at its worst since the 1970s, and small developers with tight access to funding are willing to pay a premium to get funding for redevelopment projects and bridge loans. This is why we can pay up to 15% return p.a.

Do you plan to offer an IFISA?

We will assess this later in the year and decide whether we want to implement an IFISA for the next financial year.

Is Blend Network open to international investors?

Yes, it is. Our current lenders on the platform include a range of nationalities across Western Europe, the Middle East and Far East Asia.

Which marketing channels do you use to attract investors and borrowers?

The platform has already attracted a string of high-profile lenders among the high net worth bankers and hedge fund managers of Yann’s circle of personal connections. These have lent nearly 1.5M GBP since the platform launched and the proposal is attracting significant ‘word of the mouth’ attention among current lenders. In addition, we have prepared a 2-year strategic marketing plan highlighting the relevance of branding, social media, PR but most importantly word of the mouth by current lenders who are more than happy to recommend the product.

What factors do you see impacting the British property market in the near future?

We see Brexit as a key challenge (or in our case opportunity) for the UK property market in the next 2-5 years. The UK property market is a 2-speed market, with on the one hand the London market and on the other hand the rest of the UK market. We believe the London market is set to undergo a further correction due to being directly exposed to a number of sectors hit with Brexit: the financial sector and the global elite’s appetite towards prime London property ownership after Brexit. On the other hand, the rest of the UK suffers from an endemic housing crisis and lack of available homes: after decades of failure to build the homes the country needs, public concern about housing is the highest it has been for 40 years according to several heavyweight reports into Britain’s housing crisis.

Where do you see Blend Network in 3 years?

At Blend Network we are not trying to reinvent the wheel; we are simply offering an improved product for both lenders and borrowers. While we don’t want to be the only P2P property platform in the market, in 3 years we certainly want to be the best in terms of:

  • Returns – keeping our current position at the top-end of the P2P lending marketplace
  • Customer experience – continuing to enhance the functionalities on our platform to keep delivering top navigational and interface tools that our lenders love using

Access to deals – Continuing to source top deals for our lenders

P2P-Banking thanks Yann Murciano for the interview.

Investly Plans to Raise 2M GBP on Seedrs – Interview with CEO Siim Maivel

Investly is currently pitching on Seedrs to raise between 500K and 2M GBP in a crowdfunding for equity campaign. To become a shareholder, the required minium investment amount is 13 GBP.

What is Investly about?

Investly is an invoice financing platform which helps businesses from the UK and Estonia release cash from their long payment term invoices. We’re a marketplace that connects investors to companies that need short term capital, which we issue against their receivables. We have offices in London and Tallinn.

What are the three main advantages when investing in the invoices?

Liquidity – Investly is quite different compared to most platforms because the investment period is only 30 to 40 days on average. This means you can convert your investments into cash within a month by simply halting further investments.

Return – Historically investors have earned 11-12% annually on invoices. I believe every investor should have a portion of their funds allocated to P2P investing because of the higher return and additional diversification.

Added value – Invoice finance is helping small businesses who are growing fast but fail to get the support they need from local banks. The direct impact is clear – invoice finance has helped our customers grow faster and create more jobs. This would not be possible without investors.

What are the three main advantages for companies selling the invoices?

Most of all, faster business growth. We discovered that Estonian customers who are leveraging access to working capital are able to grow their turnover by 18.3%, while turnover growth benchmark equals 7.6% (Investly internal analysis, growth benchmark from Statistics Estonia report 2017)
But access to working capital is not just numbers in spreadsheet, but most of all it’s opportunities that business can take: hire more staff and win new contracts, get better supplier payment terms by offering early or up-front payment, ensure prompt payment for employees and subcontractors.

What ROI have investors made on average on the platform in the past?

On average investors have earned double digit returns in both markets. The net return on Estonian invoices has been 11.2% annually and in the UK it’s been 12.6% annually.

What is the procedure, if a company is late in repaying the invoice?

To ensure collection is as fast as possible, we rely on early action and automating notifications to debtors. If the debtor doesn’t pay within 30 days of the due date, we have the right to ask the seller to repurchase the invoice from investors. We also ask for a personal guarantee from one or several of the directors of the seller company. This means that if the company cannot pay, we can ask for payment from the directors.

Investly is the biggest p2p lending marketplace for invoice financing in Estonia. How did you achieve this position?

We use personal approach and always try to find the best solution for our customers and investors. That professional customer service constantly provides us a leverage over banks and competitors. Also, quick decision – we present an offer within one working day. This is something that many of small businesses can’t expect from traditional lenders. On top of that, we have flexible pricing, which we’re able to use thanks to loyal and engaged investors community.

Investly is also operating in the UK. Is it complicated to operate in two different markets simultaneously and which of the two markets is more attractive for future growth?

UK is the largest factoring market in Europe with €327b worth of invoices financed every year. For comparison, France is second with €268b/year and Germany is third with €217b/year. This is where the biggest potential is. However, traditional sales and marketing channels towards our target customers are extremely crowded with thousands of B2B service providers trying to sell them products. We have to be more clever about acquiring customers there. Open Banking enables us to do that.

Estonian businesses finance only €2.5b/year, but due to the connected infrastructure of public and private registries, we can reach our customers much more easily. Also, there’s fewer providers in Estonia and we’re creating a lot of the market ourselves as factoring hasn’t been available for them in the past.

Having built Investly for four years, what do you deem the biggest assets of the company?

We have gained a detailed understanding about the problem we’re solving. It’s not specific to any geography. Businesses across Europe and elsewhere in the world are struggling with the lack of working capital. It seems that our product offering helps to solve that problem more simply than traditional lenders.

Four years is typically a good time to become an expert at something. We have also build a strong team to execute our mission. We’re experts at invoice financing.

Also, we’ve managed to get a good set of advisors on board to help us build the marketplace and secure future rounds of financing if needed.

What role does ‘Open Banking’ play in the near future for Investly’s further development?

Open Banking is a technical enabler. Businesses can now choose freely between their bank and 3rd party providers to solve their specific financial needs. It’s done in a secure and easy-to-use way.

This has gotten banks looking into how they can continue to be profitable in this new environment. Completely new types of business models are emerging and we’re proud that Investly is one of the early pioneers to set the path for others. Being part of the Open Banking sandbox in UK helped us to be one of the first ones to integrate with banks like Barclays, HSBC, RBS, Lloyds and Santander.

We’re going to use these integrations to form partnerships with traditional lenders so we can serve our customer without them necessarily having to change their provider.

You want to raise new funding on Seedrs. Why did you decide to use crowdfunding for equity rather than traditional routes?

Throughout the years we’ve received multiple requests from our marketplace investors to participate in our equity financing round. They’ve been giving us a lot of valuable feedback when we’ve developed our product and directed our credit model. We’d like them to get a chance to be part of Investly mission as we continue to grow.

With traditional equity financing, we’d be overwhelmed by administrative work to get the round closed and to manage those relationships later on. Seedrs has provided a good platform on which we can do that efficiently.

What is the value proposition for investors? Do you aim for a stock market listing? What is the likely time horizon?

Get to participate in our valuation growth. The interest you earn on the marketplace is quite stable, but the potential upside on the equity investment is much higher.

UK based investors can take advantage of the EIS scheme. It’s quite a big incentive on the tax side.

Seedrs provides a secondary market, which helps to create liquidity for our shareholders. This way, you don’t have to wait for years until the startup makes an exit or files for IPO.

Is Investly profitable? If not, when do you expect to reach breakeven on cash flow.

Operationally, we’re quite close to breakeven. The target is to get profitable in core activities in the next 6 months after fundraising round closes. But on a company level we will still be investing heavily into building out the integrations with banks to execute the momentum we’ve managed to build up.

For which activities does Investly intend to raise the used funds?

Partnerships and further automation. Few years ago, all the banks would turn us down when we approached them with suggestion of cooperation. But with Open Banking, this is window of opportunity for both of us: Investly provides working solution with better experience and price for customers, banks acquire competitive leverage on the market and are part of this fintech revolution. Therefore, funds from this round will be used on product developments which will allow us integrate with banks infrastructure and automate our processes even more with the increase in volume.

Where do you see Investly in 3 years?

Investly will be the major provider of invoice finance to businesses across Europe. It’ll be partly through partnerships (invoice finance powered by Investly) and partly through building out our own brand by continuing to deliver superior customer experience.

With that scale, we will have had enough data to build up a narrow AI for credit decisions. We have followed our roadmap for getting there. We’ll be better able to score companies and collect payments than competitors.

Investors will have access to debtors across Europe, which enables them to achieve a good diversification of currencies, countries and sectors.

Once we’ve received that scale, we will be able to deliver the best financing rate to businesses with our marketplace model, where banks are lending alongside with our investor community.

P2P-Banking thanks Siim Maivel for the interview.

Updated Jan. 23rd: A previous version of this article stated 2.5M as upper limit of the fundraise. That figure was incorrect.

Investly pitch video on Seedrs

 

Interview with Stuart Law, CEO and co-founder of Assetz Capital

What is Assetz Capital about?

Assetz Capital is now the UK’s second-largest peer-to-peer business and property lender and also the second largest in Europe.  Since 2014, we have been providing competitive loans to credit-worthy SMEs and attractive returns to investors. We provide fairer and more accessible business lending to small and medium sized businesses and property developers throughout the UK.

Since our launch, we have lent more than 350 million GBP to credit worthy businesses whilst providing returns of 30m GBP to our investors using a number of automated investment accounts that earn gross rates of return between 3.75% – 7% per annum and also permitting manual lending at rates often above that. Almost all funding to date has come from retail investors and maintaining support for retail investment is one of our business aims.

What are the three main advantages for investors?

Firstly, we only lend to businesses who we assess as credit worthy businesses with tangible assets. Tangible security is taken for each and every loan – which is unusual for peer-to-peer lenders – in order to reduce the risk of capital losses for investors, while also lowering the cost of borrowing for businesses. We also deploy traditional credit assessment techniques rather than rely solely computer-based borrower assessments, meaning our processes are fast, meticulous and human. As a result of our processes, Assetz Capital’s expected loss rates are amongst the lowest in the industry (currently standing at just 0.35% across our live loan book).

Secondly, we cater for all types of investors. In the past four years, we have experienced strong annual growth year on year, and have attracted a wide set of sophisticated and consumer retail investors, as well as attracting family office and institutional investment. We believe it is because we have demonstrated excellent credit skills and loan performance, while delivering strong net yields.

Thirdly, we are also the only major UK P2P platform to still offer a manual investment option. This allows investors to choose exactly which borrowers to lend to, allowing them to cultivate a bespoke investment portfolio and choose appropriate levels of risk in their investments. For those wanting automated accounts, we offer a wide selection ranging from our Access Accounts to a Green Energy Account, all of which cater to those with less time to invest. This combination of accounts offers the type of control that an individual investor may require, allowing people to pick and choose from a wide range of individual loan opportunities, and also the ability to automatically lend if they are time-poor.

What are the three main advantages for borrowers?

Assetz Capital has been providing small and mid-sized businesses with flexible and quick access to funding for future business and employment growth with competitive rates.

Rather than being just a website with automated credit assessments, Assetz Capital is run by finance, banking, credit and lending professionals with huge industry experience, alongside our large UK-wide network of employed Regional Relationship Directors who visit potential borrowers and help structure the loans.  I believe that this is unique to the P2P industry, and is reassuring to both business borrowers and lenders that behind the technology and website there are actual, qualified humans with relevant experience to help structure good quality transactions. Borrowers really appreciate the ability to structure their loan requirements face to face with experienced professionals instead of encountering the “computer-says-no” problem of today’s banking industry.

We’re also a lean business, and as such we have lower overheads than traditional lending institutions.  Coupled with the fact that we only lend to credit worthy businesses holding tangible assets, this means our cost of borrowing for businesses is kept low.

With the uncertainty that has come with Brexit, we have found that our platform is overcoming some of the issues which many UK businesses are currently facing.  We believe that fixed rate loans offer businesses a stable way to predict part of their finances, regardless of external market conditions. Brexit may put pressure on banks to reduce loan availability or raise rates substantially, but alternative finance providers such as Assetz Capital are continuing to offer fixed rate loans.

What ROI have investors made on average on the platform in the past?

As a business, we are totally transparent with our top-line numbers, and these are updated live in a prominent position on our website. In just over four years, investors on Assetz Capital have collectively earned gross returns of around 30 million GBP on their investments, relating to more than 350 million GBP in loans to date.  We have a big announcement at the beginning of November that further endorses these results.

Stuart LawAssetz Capital has succeeded in growing loan originations sharply in the past 12 months. How did you achieve that and were intermediaries like brokers a major factor?

While much of our loan origination is organic, brokers have also played a vital role in referring many small and medium sized businesses to us. To date, more than 350 successfully funded projects have come through brokers, and we predict that this will grow to approaching 1,000 by the end of the 2018 year.  In fact, this has been so successful, we are actively working to increase our broker network significantly in the next two years, and have recently revealed a strategy to further support brokers through a number of methods.

For example, our network of nationwide Regional Relationship Directors is supporting more brokers locally. We are also offering new product and pricing improvements to further build our relationships with brokers. Our face to face approach is very much liked by brokers and their borrowers alike and this is also a factor in our success, as is the experience of our team.

What will the soon to be launched Assetz Capital IFISA offer? Will it offer the same range of investments and interest rates as currently? Will the IFISA be flexible?

Now that we have achieved full authorisation from the UK regulator, the Financial Conduct Authority (FCA), we are preparing to launch our Innovative Finance ISA (IFISA), which should be ready by the end of 2017.  While I can’t reveal all the details at time of writing, it will be highly flexible as it is an extension of our very successful model.  There is no intention to have any ISA fees for normal transactions and we also intend for our main lending investment accounts to also be available at the same rates in the ISA. We also intend to release our next generation investment dashboard that we believe will keep it at the forefront of the industry.

Will you soft launch it to existing investors first or will it be open to all from day one?

We will open the account to all comers straight away, not just existing investors.

I heard Assetz Capital is profitable? Can you walk me through some of the key facts of the financial side of the company, please?

Very few FinTech businesses are even close to breaking even, so it was a momentous day this year when we proudly claimed we made a seven-figure profit (GBP) for the last financial year to March 31st 2017.  I believe that this is a testimony to our business model where we refuse to believe fast growth should be at the cost of profit and cashflow. While several others built their loan books up quickly with a more lenient approach to credit and very substantial levels of outside investment to cover trading losses, we took a more cautious approach to credit risk and built our entire business on an initial seed funding round of 1m GBP and Series A equity raising of just 5m GBP more. We have now lent similar levels to the whole of 2016/17 year in the first six months of this year and also booked profits of around the same as last year in this period. We have a healthy balance sheet and have just announced a new Series B equity raise that will bolster it further.

You are currently raising 1 million GBP through a crowdfunding for equity round on Seedrs. What will you use these funds for?

We had a very successful raise of 3.2m GBP on Seedrs in 2015, and now we are looking to fund a number of short-term capital expenditure projects, which are aimed to help the company continue its substantial growth.  We believe that this may well be the last one prior to an institutional investment round or IPO but we will keep this under review and are really pleased to have not just delivered thousands of people great levels of interest through our platform but also delivered hundreds of investors a strong equity growth also as a result of the Series B being priced at 250% approximately of Series A carried out two and a half years ago..

What are your views on Brexit, the impact on UK fintech in general and on p2p lending in particular?

With the many political, regulatory and economic twists and turns of 2017, uncertainty continues. While many of those involved in business and investment are nervous, there are others benefiting and seizing on opportunities. Since the Brexit vote, no one is really sure of what the longer-term impact will be on businesses, investors or the UK market in general, however from the P2P market perspective, this has been an important year to further solidify its stature and firmly place it as a viable alternative to banks for both investors and borrowers.

We see that Brexit has actually had a positive effect on P2P, and all indications signal that the industry will benefit further in 2018 as a result of banks seeming to entrench somewhat ahead of the outcome being more visible. The impact on wider Fintech is more varied and we see a disincentive to set up in London to some degree for some businesses but for those here I expect they will take a wait and see approach. The possible loss of the ability to ‘Passport’ UK regulatory permissions across Europe or vice versa could be the major loss for companies intending to operate both here and in Europe.

The main issue is that the result of the Brexit vote is still some way off and indeed it is entirely possible we could see a continuation of the recent economic strength if Brexit turns out well economically and some real challenges if it does not. It is too early to call but the former would be my expectation on balance.

Where do you see Assetz Capital in 3 years?

Assetz Capital will continue to grow, to offer new and innovative products to investors and borrowers, and to hold true to our founding principles of fairness to all our stakeholders including investors, borrowers, shareholders and staff. We have already seen growth of around 100 percent year on year since 2014, and we believe that this rate will continue.  We have very ambitious plans for the business, and certainly we see ourselves in three years as becoming one of the leading secured lenders to creditworthy businesses looking for additional funding as well as one of the top few P2P platforms for investors looking for choice, flexibility and fair, risk-adjusted returns.

We want to be recognised as being a real contributor to the economic success of the country, on several levels including helping house building volumes increase to address the housing shortage, helping businesses grow and increase employment, helping private investors earn more from their hard-earned capital, helping institutions deploy capital on market-leading risk return ratios and finally helping incentivise and contribute to a greater quality and breadth of financial education in today’s society.

P2P-Banking.com thanks Stuart Law for the interview.